DJ Gunsynd PLC Quarterly Investor Update
RNS Number : 6708D
21 February 2020
("Gunsynd" or the "Company")
Quarterly Investor Update
Gunsynd Plc (AIM: GUN, NEX: GUN) is pleased to announce the following investor update for the quarter ending 31 January 2020 regarding its current holdings and activities acquired and managed as per its investing policy.
Human Brands International ("Human Brands")
Human Brands is a private company that owns, licenses, and markets a portfolio of liquor brands. Its two key products are an aged tequila (Copa Imperial Tequila) and a Japanese Whiskey (Shinju Whiskey).
On 27 January 2020, the Company announced that it had rolled up its existing investments in Human Brands into a new GBP378,575 convertible loan note.
Human Brands has noted a marked increase in the sales volumes of Shinju in the past 3 months, when compared to the comparative period in the previous year. A further number of distribution deals have recently been signed, extending distribution of Shinju to include Florida, California and New Jersey, in addition to Maryland/DC, Massachusetts and New York, with other states likely to follow in the near future.
Human Brands has entered into conditional agreements with the owners of the Santo Coyote restaurant in Guadalajara to develop two new bar/restaurants in conjunction with Santo Coyote management. In addition, Human Brands has conditionally taken a minority stake in a new bar (Santo Cantina), within the Santa Coyote restaurant, the consideration for which will be settled in a cash and shares. Human Brands' Armero tequila brand will be heavily promoted on the menu at these locations and Shinju will also be available.
As announced on 10 December 2019, Human Brands intends to re-domicile its business from the US to the UK and change its name to Rogue Baron Ltd and then raise further funds. Further details on this will be announced in due course.
United Oil and Gas Plc ("UOG")
UOG is an independent oil & gas company established in 2015 by a former Tullow Oil team. Its strategy is to acquire assets where the management team's experience can drive near-term activity and unlock previously untapped value.
The Company holds 1.93 million shares in UOG representing approximately 0.56% of UOG's issued share capital. UOG's shares are admitted to trading on the AIM Market of the London Stock Exchange.
Gunsynd was pleased to note that UOG announced on 7 August 2019, the proposed acquisition of Rockhopper Egypt Pty Ltd ("Rockhopper Egypt") effective 1 January 2020, which constituted a reverse takeover of UOG which is expected to become effective shortly.
Rockhopper Egypt owns a 22% non-operating interest in the Abu Sennan Concession and associated development leases in Egypt.
The Abu Sennan Concession, which lies in the Western Dessert of Egypt, is governed by a production sharing contract. Seven development leases have been awarded covering the eight fields that have been discovered and put into production. An exploration licence covers the rest of the concession area.
The consideration for Rockhopper Egypt was US$16 million (approximately GBP12.2 million).
In September 2019, UOG announced it was awarded four blocks in a North Sea licensing round which follows on from UOG signing a non-binding Heads of Terms on an agreement to sell North Sea blocks 15/18d and 15/19b to Anasuria Hibiscus UK Limited for a headline consideration of up to US$5 million.
On 22 January 2020, UOG announced the ASH-2 well has been completed to allow selective production from both an upper and lower reservoir interval. The upper and lower intervals were tested separately at maximum gross rates of 7,027 and 3,851 bopd respectively.
ASH-2 came on stream on 2 January and has been consistently producing at over 3,000 bopd (660 bopd net to Rockhopper's 22% interest) on a 32/64" choke. The well will continue to be monitored over the coming months, and during this period, the interpretation of the test data and the longer-term planning for the ASH field-development will continue with the joint venture partners and Egyptian General Petroleum Corporation ('EGPC'). The rig is currently being mobilised for the first well in the 2020 infill programme (El Salmiya 5) which is expected to spud shortly.
Since ASH-2 came on stream, gross production from the Abu Sennan licence has averaged c.8,000 boepd, which equates to c.1,760 boepd net to Rockhopper's 22% interest.
Sunshine Minerals Limited ("Sunshine")
The Company has an 18.2% interest in Sunshine Minerals, a company with mineral interests in the Solomon Islands.
On 2 December 2019, Sunshine announced that an ASX listed company, Malachite Resources ("Malachite"), had entered into a conditional share subscription agreement with Sunshine to acquire a 15% stake. The Company understands that Malachite continues to undertake due diligence on the transaction including site visits and analysis of the relevant drilling data.
On 27 September 2019, the Company announced that Sunshine had relinquished its interest in the Tausere bauxite deposit.
On 20 December 2019, the Company announced a dispute between Axiom Mining Limited ("Axiom") and the Mines and Minerals Board of the Solomon Islands ("MMERE") relating to certain of Sunshine's assets was still ongoing. The Company notes that the Solomon Islands government purportedly cancelled Axiom's foreign investor certificates for alleged failure to complete surveys and hold a provincial business licence.
Gunsynd's interest in Sunshine Minerals Limited is likely to be diluted by certain consultants' fees owed being paid in equity, and the Malachite share subscription if it were to proceed.
Kolosori Nickel Limited ("Kolosori")
On 4 December 2019, the Company announced it had purchased a 7.67% stake in Kolosori for a consideration of GBP45,000. Kolosori owns 80% of the nickel prospecting licence PL05/19 over the Kolosori Prospect in the Solomon Islands.
In addition, Gunsynd was granted a 90 day option to purchase a further 22.33% of Kolosori for GBP135,000. Given the history of Kolosori and the offtake agreements signed for nickel laterite in the area, the Gunsynd directors believe that the licence has a value in excess of its entry price.
Gunsynd is currently talking to a number of parties with respect to financing the work programme via a listed shell.
Strong interest remains in nickel due to both supply constraints in Indonesia and the Philippines and also the growing fashion for electric cars.
Oyster Oil and Gas Limited ("Oyster")
On 29 November 2019, the Company announced it had conditionally entered into a binding term sheet with Sajawin Pty Ltd ("Sajawin") to conditionally sell all of its shares in Oyster for a consideration of GBP260,000.
Sajawin continues to undertake the necessary work to meet the conditions precedent to conclude this deal. To date, Gynsynd has received GBP20,000 of the consideration.
As notified on 2 July 2019 Oyster has reached an "in principle" agreement with the Government of Madagascar for a two year extension to the current exploration phase, however this has still yet to be formally documented.
Brazil Tungsten Holdings Limited ("BTHL")
On 7 February 2020, the Company announced that it had been notified by BTHL, a company in which it has a 6.18% interest, that BTHL had very constrained working capital and that, in order to continue with its operations, it would need to undertake a deep discounted rights issue, which would lead to a significant dilution in Gynsynd's shareholding or alternatively that BTHL would place itself into administration which would reduce Gunsynd's interest to nil. A further announcement will be made in due course.
BTHL, a legacy asset of the company, has a current written down value in Gunsynd's balance sheet of GBP400,000 which represents approximately 17% of Gunsynd's net asset value as stated in its balance sheet for the year ended 31 July 2019.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
The Directors of Gunsynd accept responsibility for this announcement.
For further information please contact:
Gunsynd plc Hamish Harris +44 20 7440 0640 Cairn Financial Advisers LLP James Caithie / Liam Murray +44 20 7213 0880 Peterhouse Corporate Finance Lucy Williams +44 20 7469 0930
Forward Looking Statements
This announcement contains forward-looking statements relating to expected or anticipated future events and anticipated results that are forward-looking in nature and, as a result, are subject to certain risks and uncertainties, such as general economic, market and business conditions, competition for qualified staff, the regulatory process and actions, technical issues, new legislation, uncertainties resulting from potential delays or changes in plans, uncertainties resulting from working in a new political jurisdiction, uncertainties regarding the results of exploration, uncertainties regarding the timing and granting of prospecting rights, uncertainties regarding the Company's or any third party's ability to execute and implement future plans, and the occurrence of unexpected events. Actual results achieved may vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors.
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February 21, 2020 02:00 ET (07:00 GMT)