BornOil is currently expanding on its lucrative gold-mining activities.
Borneo Oil Berhad (“BornOil”) is currently expanding on its lucrative gold-mining activities in Peninsular Malaysia which the company believes would potentially exceed 25% or more of its net profit in the near future.
Its Executive Director Raymond Teo has expressed the company’s aim of becoming a major player in the gold mining industry both domestically and regionally.
“With the addition of the gold mining business starting to come to fruition, these positive developments augur well for the financial performance of BornOil in both the foreseeable and long term future,” he said.
“Due to depressed gold prices prevailing in the market currently, this means that we are entering the industry at a most opportune of timing with low entry costs which augurs well for long term sustainability and profitability,” Teo (pic) added.
The start of bigger and brighter things to come
The company is certainly making good progress in this area. Recently, it was awarded an additional five new mining sites by HDL Global Sdn Bhd to carry out prospecting, exploration, mining, extraction, processing, marketing, sales and collection of sales revenue with respect to all minerals and precious metals including gold in the state of Pahang.
“We believe that this award is the start of bigger and brighter things to come. At this stage, we are looking towards execution of the next phase of operations in this division, which has already accommodated for expanded operations which we shall announce in due course,” said Teo.
“As it stands, we are optimistic that net contribution from prospecting and mining works has to potential to exceed 25% or more of the Bornoil Group’s net profit, moving forward,” he added.
Looking back, Teo said that the company first embarked on gold mining activities two years ago, a strategic decision that is already reaping rewards.
Besides gold mining activities, BornOil’s Fast Food Chain “Sugarbun” continues to expand rapidly, both domestically and internationally.
Currently there are 76 franchised outlets in Malaysia and abroad and a total of 14 more new franchised outlets will be added this year – thereby further contributing to BornOil’s bottom line and already strong cash flow. These outlets are spread across Brunei, China, Australia and Bangladesh.
What’s more, last year, BornOil’s appointed franchisor, SB Franchise Management Sdn Bhd, awarded an exclusive area franchise to Indonesian firm PT Mitra Adidaya Perkasa to operate SugarBun restaurants in Jakarta, Medan and West Kalimantan. Under the agreement, 20 outlets will be set up by 2018. The first SugarBun restaurant in Indonesia has already commenced operations at Ayani MegaMall, the biggest shopping mall in Pontianak, West Kalimantan, bordering Sarawak, with a seating capacity of more than 200 patrons.
On the corporate front, BornOil’s Rights Issue with free Warrants has been approved by Bursa Malaysia.
This renounceable rights issue entails the issuance of up to 2.37 billion Rights Shares at an indicative issue price of RM0.10 per Rights Share on the basis of six Rights Shares for every one existing BornOil Share held, together with up to 1.18 billion free detachable Warrants C on the basis of one free Warrant C for every two Rights Shares subscribed.
Victoria Limited and Hap Seng Insurance Services Sdn Bhd – substantial shareholders of BornOil – have pledged to subscribe in full for their respective entitlements.
Together with the continuing improved performance of the fast-food division and others, the BornOil Group’s operations is certainly growing from strength-to-strength both operationally and financially.