by Michael on September 2, 2011

Interesting news release today from POLO RESOURCES (POL:AIM). Leaving a lot of private investors wondering where such an announcement will lead us.

 Personally I think it is good news that they are re-evaluating this investment and the way they are coming out in advance with this statement lends me to think it will be followed up by a good strategic move which will be reflected in the Share Price:

Polo Resources Limited (AIM and TSX: POL) announces that following a review by its Independent Investment Committee, the Company has retained advisers to evaluate strategic options with respect to its shareholding in GCM Resources plc (“GCM”).

As at today’s date, Polo holds 15,220,985 ordinary shares in GCM, representing approximately 29.82% of the issued ordinary share capital of GCM.

 Neil Herbert, Executive Co-Chairman and Managing Director of Polo said:

 “Polo Resources is currently evaluating options with its advisers with respect to its stake in GCM. Polo is of the view that there are partnership opportunities which it can negotiate with strategic parties who would be critical to the development of the world class Phulbari coal deposit through participation on an appropriate basis with Polo. Polo remains convinced of the significant value potential in GCM and through this process will seek to unlock such value over and above that currently being assigned to GCM by the stock market.”

 I am going to take the opportunity to reprint a post I made earlier in the year with a Bullish statement I had then. I remain fully convinced of the value in this share and remain fully invested:

I was first attracted to POLO RESOURCES (POL:AIM) in April 2011 when the UK Shares Magazine  gave a Buy recommendation following the purchase by co-chairman Stephen Dattels of 12 000 000 (yes, that is twelve million!!) shares at 5.25 pence lifting his stake at that time to 9.04% in the company. Fellow co-chairman Neil Herbert also bought at this time a further 5 108 239 shares.

So was this a savvy purchase on their part (and mine by following the Shares mag tip) ?

The SP has not really moved despite the recent substantial decrease in the FTSE during this time. Today we are at 5.15 pence. That is good in comparison.

 But the exciting news that has been confirmed today is that AIM-quoted POLO is to double the expected special dividend pay-out from the proposed 1p to 2p a share after completion of its share of the £313 million takeover ofCaledon by Chinese group Guangdong Rising Asset Management. 

Neil Herbert, Executive Co-Chairman and Managing Director of Polo said:

  “We are delighted to announce the doubling of our proposed special dividend payment to 2p per share as part of our commitment to return value to our shareholders.  This follows a special dividend of 3p per share in 2010 following the disposal of Polo’s interest in Extract Resources Limited.  These successful investments demonstrate management’s ability to identify growth opportunities and convert these into realised financial gains for shareholders. 

 “Our ethos is to invest in projects where we can add value, irrespective of geographic location or commodity focus.  We are in the enviable position of having enough cash to build on our current portfolio of investments and are actively reviewing attractive new investment opportunities both in mining, oil and gas.”

 Neil Herbert, co-chairman and managing director of South Africa-based Polo, says the company now has enough cash, even after the dividend payout, to build on its investment portfolio and is ‘actively reviewing attractive new opportunities in mining, oil and gas’.

So what now for me as a private investor ? Personally I will take the special dividend with thanks to the management and reinvest it elsewhere. The shares in POLO I shall keep, as I like the board of directors and I think they will produce further value for the shareholders and  the SP has further to rise. One just has to look at the previous RNS’s to see the potential good news flow that could be on its way. SO I still have a Buy recommendation for POLO.

Good luck in your trading today



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