It would appear that we have been reminded once again, that like the old Yellow Pages campaign, Riverfort Global Opportunities is “not just there for the nasty things in life.” Indeed, it is evident from the latest investment by the AIM listed group that when Riverfort enters a situation the key aspect is that both investor and investee should benefit.
Increase Production
The latest example of this is how it has invested in Gold producer Tanzanian Gold Corporation, and that TanGold is raising $14m to increase production. So clearly TanGold are happy.
At the same time Riverfort is likely to be best pleased with this investment giving it a significant exposure to the soaring Gold space via its $1.72m share of a deal in a $180m market cap US listed stock which is now set to increase its processing capacity eight fold.
Downside Protection
But it does get better than just the interest income, equity conversion upside and the warrant exercise kicker. Just in case we are at Peak Gold and things turn down from here, Riverfort has downside protection through the debt structure.
Presumably, this is the kind of deal that many private investors would have liked to be involved in, given how close it is to being “Heads you win, Tails you don’t lose” in terms of the risk profile. But what most investors do tend to forget that rather than being on the outside looking in, they could participate indirectly via the equity of Riverfort via its AIM listing. If not so much a hedge for their portfolio it certainly would add variety in a smart way – often far more complex than many of us could get our heads around.
The Best Deals
In addition, the scoutmasters at Riverfort are clearly going to be in the frontline – given the funding facilities they have, to scour the Junior end of the stock market looking for the best deals.
Indeed, deals there have been a plenty on the stock market since Covid-19 entered the fray in March. We have seen on the newswires that from Goldman Sachs down, anyone with exposure to heightened stock market activity, especially in the funding area has seen business boom.
Uncertain Climate
This is because the uncertain climate has caused both well financed groups to raise more funds – even as just comfort money, while those companies who may have been struggling would have been looking to examine every means possible to get through the challenges many of us have been facing.
Arguably, it has been the minnows on the London market, especially in tech, pharma and more lately resources, which have led the charge and with TanGold, Riverfort looks to be well placed with in this instance it playing the role of institutional investor in a timely fashion as the Gold price soars to all time highs, and is expected to continue soaring given massive Government spending sprees.
Silver Lining
While share price is not everything, Riverfort’s shares are 50% up on their March lows, something which reflects the way that many have been wrongfooted by the robustness of the space it occupies, and how the pandemic has literally had a Silver lining after the initial shock.
The surprise perhaps more than anything else looking at media coverage of Riverfort is that it is listed, and of course that it has shares where you can get exposure to the deal flow, are rarely mentioned. As well as the Yellow Pages slogan, “Don’t get mad, get even” could be a saying to remember when it comes to the smart funding and investing methods exhibited here.
Disclaimer
Zakmir.com is a purely journalistic website – Zak Mir is a member of the National Union of Journalists. There is no intention here of providing financial advice. It is recommended you seek an independent professional opinion before deciding whether or not to take any action with regard to anything written here.
