Paternoster Resources is an investment company listed on AIM, focused on opportunities in the natural resources sector. Its portfolio consists of a mix of listed value opportunities, shell companies and unlisted or pre IPO companies. Trawling through the RNS announcements, it is quite difficult to ascertain exactly what the portfolio is made up of. With this in mind we at Valuethemarkets have broken down the business credentials
PRS has 3 shell companies, Brady Exploration (BRDY), Astar Minerals (ASTA) and Plutus Resources (PLR). Paternoster took 40m shares in PLR at 0.25p and convertible loan stock for the same amount. This £200k investment is effectively now worth £560k which is an unrealised 180% profit, however their BRDY and ASTA investments are down currently underwater. These shell companies provide massive upside potential for PRS with a deal or reverse takeover reaping heavy rewards.
Note: ASTA recently raised nearly 4 times their market cap to restructure the board by appointing two brokers. We see this as the first step to laying its foundations in acquiring high value assets whilst moving the company forward.
The front row investments come as Bison Energy, Shumba Coal, Andiamo Exploration and North American Petroleum. These investments combined are currently worth around £680k. Much like the shell companies they hold a bunch of potential with the focus on Andiamo and NAP. Shumba Coal is listed on the Botswana exchange and North American Petroleum is listed on the ISDX. We anticipate an AIM listing will provide PRS with a massive uplift in the valuation of their investment.
Lastly, PRS has a basket of listed and liquid investments including Glencore Xstrata, Quadrise Fuels, Cairn Energy, Ophir Energy and BG Group. These investments were made to comply with their investment policy and can be easily liquidated if needed. Our estimates suggest the shell companies are currently worth £730k, the unlisted investments above around £680k and the liquid investments around £450k. Total investments of around £1.86m plus cash estimated at approx £900k means the company is worth around £2.75m. We will hopefully gain more clarity when the impending year end accounts are released.
We are aware that PRS has shown glimmers of magic along with long periods of meditation, this can make hitting the ground running from VTM’s perspective difficult however we believe that 2014 will be a year for improving and moving, we expect FY2013 accounts news during the month as the first foot step up the valuation ladder
In the early summer of 2013 the share price rocketed to 0.80p+ on news developments which subsequently dried up. This news or its potential has not gone but merely bubbling away. We suggest that something of a material nature is bound to surface, backed with a decent cash v cap position coupled to its tidy investment bundle
Market cap currently around £1.8m, we see Paternoster as a patient speculative Buy at 0.32p with an initial target of up to 0.60p