Natural resources investor Polo Resources (LON:POL) saw its net asset value (NAV) increase slightly in the second quarter of 2013 despite a challenging environment for the sector.
The rise in NAV from 35.9p to 36p a share is largely thanks to shares in private Canadian project developer Ironstone Resources climbing from C$0.84 to C$1.40 in the quarter, following a share placing earlier in the year. Polo owns just over 15% of Ironstone.
This success was offset by GCM Resources shares falling further, as well as losses as a result of short-term investments. It owns around 30% of GCM.
Polo, whose main assets are in oil and gas, hailed a strong performance from 48%-owned African oil explorer Signet Petroleum.
It ended the period with £17.2mln in cash.
Michael Tang, executive co-chairman and managing director, said: “During the quarter good progress was made with Polo’s portfolio of oil and gas interests, particularly with Signet Petroleum’s strategic alternatives process confirming the highly prospective nature of its offshore concessions.
“Despite the difficult outlook for gold, Nimini delivered solid results in its Mineral Resource Estimate and regional exploration is now underway which may in time add substantially to the size of the project.
“We work hand in hand with management in all our investments. I was recently appointed executive chairman of GCM Resources plc, alongside other new appointees. The new board is working to reduce costs and is looking to raise further finance, whilst fully addressing any concerns over compliance with international standards.
“While the outlook for the resource sector remains challenging it also provides new opportunities and we look forward to taking advantage of such opportunities as and when they arise.”
Broker Liberum Capital points out that the shares now trade at a 46% discount to its NAV.
“Michael Tang is taking an active role in managing the assets as highlighted by his recent appointment to the GCM board and we think the current price represents an attractive buying opportunity given the potential for near-term catalysts,” it said.
Polo shares dipped 0.5p or 2.5% to 19.25p each on Tuesday.