NQ Minerals PLC (LON: NQMI) share value can be summed up nicely in this internet age. Looking at the NQ Minerals website itself under “investors” returns a 404 page – OOPS! THAT PAGE CAN’T BE FOUND Sorry, but the page you are looking for does not exist or has been removed. Which is apposite as the company is bust, bankrupt, is not pining for the fjords but has gone.
One part of which we can take as a warning to ourselves. Investing does contain risks, not all ideas work. It is the balance over all positions which determines a trading profit, not the performance of one single stock or position.
NQ Minerals certainly had ambitions, there was this London quote, one in Frankfurt, then two OTC in the US and even an ADR program. That’s a lot of listing expenses for what always was a small company. But then ambitions do have to be funded even if those ambitions don’t come to fruition.
The base idea was to combine the environmental clean-up of old mining sites with metals extraction. This has merit as an idea but there’s a useful catch in this.
One point is that technology does march on. Extraction and processing techniques do get better. This means that what might be slag, gangue or waste to one generation of miners becomes viable ore to the next. This has been repeatedly true in gold mining for example. So, prospecting old mine sites is an entirely reasonable proposition.
Further, environmental standards are higher now than they ever have been. There are thus some pollution blasted sites that society would like to clean up.
As a basic proposition trying to combine these two ideas has merit. Find those old sites, wastes, that are now newly ores as a result of tech advance and reprocess them while cleaning up the site in tandem.
Now comes the slight problem. The environmental clean up might well cost more than the value of the metals extracted. This means that outside subsidy for those environmental costs is required. That can be very tough to achieve. Without it the metals revenue might well not be enough to pay the costs of the extraction and also clean up. Actually, the world is littered with places where this is true.
This appears to be the roadblock that NQ Minerals hit. The value of the metals extracted wasn’t high enough to cover the full costs of both extraction and environmental remediation. At which point the NQ Minerals plan crashes, the company goes bust and that’s that.
Sad as it is to have to say it now that NQ Minerals has been withdrawn from London trading (the administrators were appointed back in August 2021) there really is no value left to investors. Even that quotation isn’t worth anything as a shell to be used for a recapitalisation or another project.
The only value left in NQ Minerals shares is as proof of a loss for a capital gains tax return. Investing really does involve risk.
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Tim Worstall is a freelance writer specialising in economics and the financial markets.