Shares of Think Environmental (THEC.SI), a Singapore-based firm that invests in and manages renewable energy businesses, rose as much as 2.9% today after it said it will acquire 70% of gold miner Mornington Offshore for US$35 million ($45.4 million).

At 10:22 a.m., Think Environmental shares were trading at $0.72 on a volume of 4 million shares.

The acquisition will give Think Environmental control of gold concessions in Mali in Western Africa, thus making it the only Singapore-listed company with gold mining assets, it said in a statement.

“Logically it should be positive, but this company hasn’t got a long track record. It’ll take a while for people to see if it’s a great investment, and also how much reserves there are in this gold mining company,” said a local trader.

“Although gold prices are high, but at the end of the day what’s important is whether you have a lot of gold reserves,” he added.

Spot gold edged higher to US$1,386.30 ($1,797.6) an ounce on Tuesday, as the dollar fell nearly half a% in thin year-end trade, and strong demand is expected to lend support to the bullion into the new year.


 

DMG cuts Think Environmental (A78.SG) target price to $0.135 from $0.350 and keeps the stock at Sell after the company announced it has entered into a MOA with Mornington Offshore for the proposed investment in the latter which owns 100% stake in a gold exploration company, Societe Emas Mali.

The house says details of the investment in Mornington “remain scanty,” but views the move into offshore gold mining negatively “due to its shift in focus away from the troubled environmental business, and the lack of experience in offshore gold mining in a new country.”

The house also cuts its FY11F-FY12F earnings estimates by 95%-77% respectively due to disappointing delays in operations of Think’s UK-based associates, Think Environmental and Think Greenergy.

Shares are down 3.0% at $0.640.

 

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