Legend Mining shares jumped 12.5% today on news the company had cashed out a big profit on Independence Group shares inherited through last year’s takeover of Sirius Resources.
Legend bought 1.5 million shares in Sirius Resources for a total of $1.87 million back in 2012 after the Nova discovery but before Sirius’ shares climbed even higher on the back of the adjacent Bollinger find.
The Independence Group takeover and S2 Resources demerger in 2015 handed Legend $780,000 in cash, 990,000 IGO shares, now sold for a total of $4.1 million and 750,000 S2 Resources shares.
The S2 shares are still held by Legend with a current value of $495,000 bringing the total return for Legend’s $1.87m educated punt on Sirius to around $5.3m.
The sale follows a strong lift in IGO shares through July from around $3 to more than $4 a share and provides a big boost to Legend’s cash position.
It will also have a healthy impact on Legend’s balance sheet and P&L, with the $4.1 million sale price well in excess of the current $2.5 million book value of the company’s IGO shareholding.
The northern Fraser Range explorer now holds cash of about $8.5 million, liquid securities of $0.6 million and receivables of $3 million, giving it a total of $12.1 million in cash and liquid assets.
Brokers will no doubt be crunching the numbers following today’s news given that $12.1m in liquid assets represents about 0.6 cents a share, compared with the company’s share price today of around 0.9 cents a share.
That leaves just 0.3 cents a share for the company’s extensive and promising tenements that lie on-trend between Nova-Bollinger and Tropicana.
Legend managing director, Mark Wilson, said “We have always disclosed that the purpose of our Treasury operations is to generate cash to spend on our own projects. This transaction demonstrates the financial objective of the investment has been achieved and is a very good outcome for Legend shareholders.”
By Matt Birney
