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Starvest plc (SVE)

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Tuesday 16 August, 2011

Starvest plc

General Update

Tuesday 16 August 2011

General update

In  view  of  the  successful  completion  of two investee company disposals and
against  the background of recent market  turmoil, it seems appropriate that the
Company should issue a general update at this time.

The  two disposals, resulting  in a combined  profit of £1.5m  being 583% on the
original  cost,  were  of  Belmore  Resources  (Holdings)  plc  by Lundin Mining
Exploration Limited for cash and of Sheba Exploration (UK) plc by Centamin Egypt
Limited for a mixture of cash and Centamin shares.

These two PLUS quoted company take-overs at premium prices are in stark contrast
to the prevailing mood in which junior market share prices have drifted lower in
the absence of investor buying interest.

In  the West we may be suffering from the economic crises of the past years, but
in China, India and emerging nations the demand for steel continues and shows no
sign of abating.  Many of our investments are focused on meeting this increasing
demand  or on the extraction of gold,  the worldwide demand for which has pushed
the price towards $1,800 per oz.

Of  the remaining core investments, some are  exploring for gold or iron ore and
other  minerals such  as nickel;  others are  well advanced  in their  plans for
production  or are already generating cash.  Of  these we focus on two where, we
believe,  the companies  are materially  undervalued at  present and on a third,
Regency  Mines plc, that  also has interests  in Oracle Coalfields  plc, and Red
Rock Resources plc:

  * Oracle Coalfields plc ( which was admitted to the
    AIM market in April, plans to start mining coal in Pakistan in 2013 in what
    is seen to be a major development for revitalising the national economy:
    It will produce a major new source of indigenous feedstock for initially
    industrial and later power station consumption, thereby contributing towards
    resolving a critical national shortage of electricity and by replacing coal
    imports, alleviating the country's serious foreign exchange imbalances.
     With the market capitalisation at £16.3m, a discount to the recent AIM
    admission value, we expect a substantial re-rating.
  * Red Rock Resources plc ( has a 51% stake in a Columbian gold
    mine where the continuing mine improvements are leading to increasing gold
    recoveries, gold exploration in Kenya, an interest in Ascot Mining plc
    (PLUS),  iron ore exploration in North-West Greenland with NAMA Greenland
    Limited, uranium and rare earths through Resource Star Limited (ASX) and Cue
    Resources Limited (TVX).  But the icing on the cake must be its 1.5% gross
    production royalty on Jupiter Mines Limited's (ASX) Mt Ida high grade
    magnetite iron ore project in Western Australia expected to commence
    production during 2013. At present prices, the mine is valued by Jupiter
    Mines at £1.04 bn with the royalty, at current prices, estimated by us to
    generate approximately £10m pa for Red Rock Resources over 20 years; this is
    in addition to Red Rock's 4% equity stake.  With a current market
    capitalisation of £45.95m, we believe Red Rock Resources to be seriously

  * Regency Mines plc ( with a nickel exploration JV in
    Papua New Guinea and an 11% investment in Oracle Coalfields as well as 20%
    of Red Rock Resources we believe it  is also substantially underrated at the
    current market capitalisation of £17.4m.

Other  projects  managed  by  Ariana  Resources  plc,  Centamin  Egypt  Limited,
Greatland  Gold plc,  Kefi Minerals  plc and  Minera IRL  Limited have direct or
indirect  interests in gold or gold  exploration and therefore expect to benefit
from the improved gold price.

It  remains the opinion of  the Board that the  Company can expect a significant
increase  in its net asset value as  these investee companies and their projects
mature  in the coming years.  It seems that  this is something the market may be
recognising  in that the Starvest closing price has increased slightly since 30
June  2011 to 13.5 pence and the discount to net asset value reduced slightly to

                       12 August       30 June      30  September   Change since
                                2011          2011           2010 September 2010

Company asset value           £7.71m        £8.10m         £4.19m            84%
net of tax

Net asset value -        20.25 pence   21.21 pence    11.28 pence            79%
fully diluted

Share price - mid        13.50 pence   12.50 pence     7.75 pence            74%

Share price discount          33.33%         41.1%          31.3%
to net asset value

Market                        £4.68m        £4.59m         £2.84m            65%

All  valuations are based on  the closing market bid  prices or lower directors'
valuation  as described in the 2010 annual report  and are net of a 10% discount
totalling £648,000 applied to substantial holdings.  Furthermore, since 30 June,
cash  of £1.83m  has been  received from  the disposals,  thus strengthening the
balance sheet in these challenging times.  With the gross profit for the year to
date  of  £2.6m,  your  Board  remains  confident  that  its  patience  is being
rewarded.   As we  await a  full recovery,  Shareholders enjoy  a wide spread of
medium  term interests, a pooling  of risk and the  prospect of a further modest

 R Bruce Rowan

 Chairman & Chief Executive

 16 August 2011

Enquiries to:

Bruce   Rowan,   Chairman   020 7486 3997 or   John  Watkins,  Finance  Director
07768 512404;

Gerry Beaney, Colin Aaronson or David Hignell, Grant Thornton Corporate Finance
020 7383 5100
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Source: Starvest plc via Thomson Reuters ONE