Argonaut congratulates East Africa Resources on Reverse Takeover and Capital Raising

Argonaut, as Lead Manager, has been successful in raising A$5.5 million (gross) for East Africa Resources Limited (ASX: EAF) (“East Africa”) via a heavily oversubscribed public offer to new and existing investors of approximately 275,000,000 new ordinary shares at an issue price of A$0.02 per share.


Morning Notes

US stocks have posted big gains for the second straight session as strong American economic data extended a global rally that began with a surge in beaten-down Chinese equities. The Commerce Department reported the US economy grew at an annual rate of 3.7 per cent in the second quarter, much higher than the 2.3 per cent initially estimated. The US growth report added to positive momentum from a 5.34 per cent rise in the Shanghai stock exchange, ending the worst five-day rout for almost two decades, and solid gains in European bourses.

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Latest Research

ASL’s weak result, impacted by one-off costs of $19.0m in addition to impairments of $202.8m, was not unexpected. Underlying PBT of $2.1m was only marginally positive. However ASL once again proved itself capable of generating positive free cash flow and paying down secured debt, which we expect to be almost eliminated by the end of this year. Recovery will be slow but ASL is significantly undervalued on a longer term view.

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