Fortress Minerals soars 19.6% on earnings jump, proposed acquisition

Singapore

SHARES of Fortress Minerals surged 19.6 per cent during the late morning trading section, after the company posted a jump in its third quarter net profit and announced a proposed acquisition of a Malaysian miner.

The counter hit an intra-day high of 33.5 Singapore cents on Monday, up 19.6 per cent or 5.5 cents as at 11.26am, the highest the counter has reached since its debut on the Singapore bourse back in March 2019.

Shares of the Catalist-listed iron ore concentrates producer closed at 32.5 Singapore cents, up 4.5 cents or 16.1 per cent, with 8.9 million shares changing hands.

Fortress Minerals posted a net profit of US$4.3 million on the same day for the three months ended Nov 30, 2020, more than five times that of US$751,151 a year ago.

This came as its revenue more than doubled to US$10.3 million from US$4.1 million a year ago, on the back of higher volume sold and higher pricing for high-grade iron ore concentrate.

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Earnings per share stood at 0.87 US cent for the quarter, up from 0.15 cent the year before.

No dividend was declared for the quarter, versus a second interim dividend of 0.2 Singapore cent the year prior.

Fortress Minerals executive director and chief executive officer Ivan Chee said the present strong operating environment during the quarter under review contributed positively to the group.

Separately on Monday, Fortress Minerals proposed a US$30 million acquisition of Malaysia's Monument Mengapur, which is principally engaged in the business of copper and other minerals exploration.

Monument Mengapur is the legal and beneficial owner of Cermat Aman and Star Destiny. Cermat Aman is the registered lessee of the mining lease for a parcel in Bukit Mengapur in Pahang, Malaysia, while Star Destiny is the holder of an exploration permit for compartment 110 and part of compartments 108, 109, 111, 112 of Hutan Simpan Berkelah in Pahang.

Fortress Minerals entered into a conditional share purchase agreement with vendor Monument Mining on Jan 8, 2021. In connection with the proposed acquisition, the former has also entered into a royalty agreement with the latter.

Fortress Minerals will pay royalties at the rate of 1.25 per cent of gross revenue on all mineral products produced in forms ready for sale from the area within the boundaries of the entire tenements held by Cermat Aman and Star Destiny.

The royalties exclude the free-digging oxide magnetite iron materials contained on the top soil at certain areas of the tenement held by Cermat Aman, subject to the completion and terms of the proposed acquisition.