Equity Resources, the mining-focussed investment company, has published its half year report to 30th November, saying that the improvement forecast in its annual report in May had indeed occurred. The firm jumped into the black, reporting a pre-tax profit for the period of £60,230, from a loss of £10,680 in 2008. Earnings per share of 0.13p were recorded, up from a loss of 0.02p per share the previous year. The sale of part of its investment in AIM listed Regency Mines (RGM) raised £102,605 in the period, with a gross profit of £78,605. In addition, the short term loan of £50,000 made to Red Rock Resources (RRR), also on AIM, was repaid in full and these two events allowed Equity Resources to fully repay its own loan of £150,000. Cash at the period end was £12,540.

The firm continues to hold stakes in Regency Mines, which has interests in Australia and Papua New Guinea, and Red Rock Resources, which has diverse interests in Australia, Paraguay, Kenya and Zambia. The net asset value of the group as at 29th January this year was 0.43p per share, a decline of 31% since the year end. Since then Regency shares have remained flat, while those of Red Rock Resources have declined by 3.23%.

At a mid-price of 0.3p per share, Equity Resources has a market capitalisation of £143,925 million pounds, a discount of 30% to its net asset value as at 29th January. Considering the risks involved with the two early stage investee companies and the firm’s frankly ridiculous legal structure (a publically quoted company holding investments in just two firms!) we are not attracted to the shares. Avoid.