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Polo Resources remains positive on long term fundamentals of sector

Last updated: 18:09 17 Dec 2014 AEDT, First published: 19:09 17 Dec 2014 AEDT

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Resource investment company Polo Resources (LON:POL) remains positive about the long term fundamentals of the sector despite a challenging market.

Final results to end June showed a strengthening of its balance sheet and improved cash reserves.

This was driven by its oil and gas interests, of which Signet Petroleum is its cornerstone investment, it said.

Signet concluded in the period the sale of  interests in block 2913A/2914B in Namibia to Shell  and thereafter implemented a dividend in specie and a share buy-back offer, from which Polo received approximately US$22.8mln, which was reinvested in the group.

The group has interests in coal, gas, gold, phosphate and copper.

In the period, the firm increased its cash position by US$8.7mln to end the year with US$30.5mln (2013 year end: US$21.8mln).

For the year to end June, it posted a loss before tax of US$19.1 million (2013:net loss of US$16.178mln) - mainly attributable to  a provision against Nimini's Holding, which has the Komahun gold project, and of which Polo holds 90%.

Polo undertook a provision against Komahun evaluation and exploration assets amounting to US$28.2 million and goodwill write off of US$2.8 million relating to the acquisition of Nimini following the Ebola crisis and weak gold price outlook.

As at the end of the year the group's net asset value per share was 27.2p a share.

Michael Tang, Polo's executive chairman of Polo, said: "The year under review has been one that has seen Polo significantly strengthen its balance sheet and cash reserves from our oil and gas investments.

 "As we head into the next reporting period, with an expanded portfolio which includes exposure to near term cash generating investments, Polo remains strong in the face of challenging price and market volatility.

 "Through our transaction driven business model, the company offers investors a, more balanced risk investment exposure to the metals, mining and energy sectors."

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