News

January 07, 2009

Triple Plate Junction Does A Good Deal With Newmont in PNG, But The Zambian Venture Looks A Loser

By Charles Wyatt

Aim-traded Triple Plate Junction is one of those odd companies that manages to survive in the nether world below the radar screens of investors. It does not appear deliberately to avoid comment and contact, but that is what it achieves. The company made an announcement in the dying days of 2008, but not, as you might expect, using that timing to brush bad news under the carpet, but rather releasing it then because that was the way the cards fell. Apparently the mighty Newmont has decided to subscribe for 17 million shares in Triple Plate at a price of US$0.7367 per share. The decision to price the deal in dollars is an odd one, but maybe it makes things easier for the bean counters at Newmont. The equivalent price in sterling on Christmas Eve, the day of the announcement, was 5p, but investors will have to keep an eye on the exchange rate when doing their sums.

Clearly some investors had previously lost faith that this deal would emerge at all, as in the previous week Triple Plate’s shares fell 27.8 per cent to 0.65 p per share, giving it a market cap just short of £1 million. Even now, with the deal out in the open the shares are still only 1.88 p per share, and that is a country mile away from 5p per share. So why did Newmont agree to pay such a premium for its involvement in the joint venture with Triple Plate Junction on exploration licences and...