Mineral & Financial Investments Ltd (AIM:MAFL) has snapped up a 6.53% equity stake in Luca Mining Corp, a listed mining company with two operating gold and silver mines in Mexico.
Luca recently changed its name from Altaley Mining Corporation.
The new addition to M&F’s strategic portfolio cost just over C$2mln (£1.18mln), with the purchase of 5,715,000 units of Luca. Each unit is one common share and half a transferable share purchase warrant, with each whole warrant exercisable at C$0.50 for two years from the date of closing.
M&F said it believes the investment, representing 13.7% of its net asset value as of the first half of the year, will generate attractive returns for shareholders.
Luca has given guidance for 2023 production of 65,000 ounces of gold equivalent, with each mine of its two mines having a mine life of more than 10 years, M&F said.
Its last audited full-year results, for 2021, showed Luca generated revenues of C$98.5mln, net income of C$36.6mln and had assets of C$108.8mln.
Luca’s management has estimated that total corporate consolidated cash flow will total C$41M in 2024 and its shares currently trading at 1.26 times market cap compared to other comparable junior producers at 2.7 times cash flow and intermediate producers trade at 4.9 times.