Investment vehicle BWA Group has made its third investment since joining the market in March 2010. The group has put £20,000 of its cash holdings into purchasing convertible loan stock in recently de-listed Harrogate Group, which is in the process of acquiring a gold mine in Spain. Harrogate is in the middle of a £0.5 million fund raising which will partly be used to finance a Competent Persons reports into the viability of production at the mine. The loan stock is convertible into two million shares in the company should Harrogate decide to return to the stock market.

At the prevailing mid-price of 0.75p, BWA Group is capitalised at just £0.79 million. The group’s acquisition strategy is very open-ended with no focus on a particular sector and no precise criteria for the type or stage of business to take up an equity stake in. Even though its management has significant experience of venture capital and a wide variety of directorships on AIM and PLUS companies there is little reason to be attracted to the shares at present. So far its investments have been in small loss making, early stage businesses- two of which are acquisition vehicles themselves. While the group may have bagged a bargain by being early stage investors (albeit on a small scale) until there is good news flow from its investments or an interesting deal we see no reason why the group, which held net assets of £0.25 million at 30th April 2010, should trade at such a large premium to its pre-investment cash holdings. Avoid for now.