UK companies must publish pay ratios under new law

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Today’s edition features:

  • Hummingbird Resources (HUM.L)
  • KEFI Minerals (KEFI.L)

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The FTSE-100 finished Friday’s session 0.08% lower at 7,401.46 whilst the FTSE AIM All-Share index was up 0.02% at 1,005.21. In continental Europe on Monday, the CAC-40 finished 0.48% lower at 5,079.75 whilst the DAX was down 0.37% at 12,123.47.

Wall Street
In New York last night, the Dow Jones ended the day 0.02% lower at 21,808.40, the S&P-500 gained 0.05% to stand at 2,444.24 and the Nasdaq rose 0.28% to finish the session at 6,283.02.

In Asian markets this morning, the Nikkei 225 was down 0.56% at 19,340.68 and the Hang Seng was 0.38% lower at 27,758.07.

In early trade today, WTI crude oil was 0.49% higher at $46.8 per barrel and Brent was 0.44% up at $52.12 per barrel.


UK companies must publish pay ratios under new law
Companies will have to reveal how much more their chief executives are paid compared with the average employee, under a package of government reforms. Measures aimed at increasing boardroom transparency in publicly listed companies will be unveiled later. Firms who face significant shareholder opposition to executive pay deals will be named and shamed on a new register. Business Secretary Greg Clark says the plans will make a difference, but unions attacked them as “watered down”. Mr Clark, who will unveil the measures later, said the changes would make companies “more accountable to their employees and shareholders.” The new corporate governance laws, which are due to come into effect by June 2018, will force some 900 publicly listed companies to reveal the pay ratio between bosses and workers. The Conservatives had promised in their manifesto that executive pay should be approved by an annual vote of shareholders. However, the new measures instead propose that those public companies who face a shareholder revolt on pay, where 20% or more of investors vote against executives’ remuneration, will be named on a register overseen by the Investment Association.

Source: BBC News

Company news

Hummingbird Resources (HUM.L, 35.25p) – Speculative Buy
Hummingbird Resources, the gold exploration and development company with assets in Mali and Liberia, announced today that pre-production mining has commenced on schedule at its Yanfolila project in Mali. Mining contractors, African Mining Services (AMS), have initiated pre-production mining which will be ramped up over the next three months as Hummingbird approaches full scale operations. Ore will be stockpiled in advance of its introduction to the process plant in Q4 2017. As for the processing plant, construction remains on schedule and within budget, first gold pour continues to be targeted by end of 2017.

Our View: We continue to be encouraged with the progress being made at Yanfolila, pre-production mining is an important milestone as the Company targets first gold pour by the end of 2017. We look forward to ramp up to full scale mining in the coming months as well as commissioning of the plant in Q4 2107. In the meantime, we maintain a Speculative Buy rating on the stock.

Beaufort Securities acts as corporate broker to Hummingbird Resources plc


KEFI Minerals (KEFI.L, 5.25p) – Speculative Buy
KEFI has published an update describing progress made with Oryx (the project financier for Tulu Kapi) and progress made with the Ethiopian government. In terms of financing, KEFI and Oryx are planning to complete financing “later in 2017”. As a reminder Oryx will issue bonds to fund the build and then KEFI will pay Oryx to lease the plant, similar to a build own operate agreement. Assuming financing completes this year, 2018 will be dominated by construction newsflow. In terms of government progress, firstly KEFI has received all its (£2.5m) VAT refund. Secondly a new JV company has been created in which KEFI and the government will own Tulu Kapi. KEFI will own 75-80% and the government 20-25%. KEFI and the government are now aligned in their interests to build TK.

Our View: It is good to see that KEFI and the government are now working more closely together. This will help with the resettlement programme and various other projects e.g. Road widening and power connections. Financing appears to be progressing with KEFI only needing circa $25m of the total requirement. And KEFI has plans to reduce this further perhaps with some form of offtake finance or working capital facility. We reiterate our Speculative Buy recommendation for KEFI.

Beaufort Securities acts as corporate broker to KEFI Minerals plc


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Compiled by:
Barry Gibb, Kazunaga Senga, Sheldon Modeland, Charles Long & Ben Maitland
(t) +44 (0) 207 382 8384

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