Picture the scene. You are the Chief Executive of a small cap AIM listed exploration company. Over the last few years you have experienced the turbulence of the Alternative Investment Market (AIM); the buffeting of the global economic crisis and the hot/cold attitude of mining and exploration investors.You started well enough, with a placing of £2.3million at 30p a share in May of 2006, providing the company a market cap of £9million - no mean feat for a tiddler.
Things got better as this tiddler started to forge Joint Venture (JV) partnerships with global players such as Anglogold Ashanti, Barrick Gold, Troy Resources and LGA Mineracao. They have now developed a portfolio of gold, silver and base metal prospects in highly prospective and exciting territories and evolved to a position where extensive exploration and development work became largely funded by its JV partners.
£3.5million raised in two share placings since listing, means that after three and a half years of exploration, the company expended just over £4million of investors' money to build a hugely attractive portfolio and the company still had around £1.7million in the bank in late 2009 to fund activities for the foreseeable future.
I'll say it again, not too bad for a tiddler!
And an achievement for which you and your management should rightfully be proud. Perhaps? But then again with the share price currently standing at just 7.25p (closing mid on 16.12.09) that means your total market cap is just £4.3million. Or looked at another way, after all the progress made on the ground, the share price has been reduced to just 24% and the total market cap just 47% of what it was on its market debut.
Welcome to the world of Jeremy Martin, CEO Horizonte Minerals (AIM:HZM)
"Fortune favours the brave" as we resource investors often say. But the market doesn't always reward the exploration brave for their efforts. Well not straight away at least;
The share prices of even the most exciting AIM stocks can languish at deplorably low levels for quite some time until something happens, investors start getting interested and then a rerating occurs.
Before we get too speculative let's break down the portfolio and briefly examine the various prospects, partnerships and assets that might just make Horizonte worth more than its current…
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