San Leon to buy back loan notes
San Leon’s plans to use funds from the placing of new shares to buy back the $173m of loan notes. Toscafund, a majority shareholder in the firm with a 41% stake, holds the loan notes which will be sold to San Leon providing the placing completes.

L ong-suffering shareholders of Lonmin had reason to cheer today as the embattled platinum miner showed signs that its turnaround was on track.

Shares in the former FTSE 100 company, which carried out a highly dilutive $407 million (£284 million) rescue rights issue in December to avoid extinction, spiked 23.25p or 14% today to 186p, taking gains this year to 125%.

The South African company revealed that revenues edged up in the six months to 31 March to $515 million, and it managed to drastically reduce its pre-tax loss from $118 million to just $21 million.

The results also soothed concerns about Lonmin’s debts as it finished the period with $114 million in cash, compared with last year when it had crippling debts of $282 million.

Shore Capital’s Yuen Low said: “The good ship Lonmin is showing signs of gradually being turned around, but it will be heavily dependent on having favourable PGM [platinum group metals] price and FX winds in its sails in order to go anywhere fast.”

Elsewhere, traders were still in so-called “risk-off” mode as more gloomy Chinese data poured in, sending the FTSE 100 15.94 points south to 6122.56. However, that did not put investors off mining stocks, which were in favour.

A double upgrade from Bank of America Merrill Lynch to Buy propelled Anglo American to the top of the blue-chip table, up 34.5p or 6% at 612.7p.

Citigroup’s upbeat assessment of the challenger banks put them among the winners. Buy-rated Shawbrook and CYBG improved 3.08p to 259.28p and 3p to 225.75p respectively.

On the junior market, San Leon Energy, the oil firm of Irish businessman Oisin Fanning, confirmed plans to tap shareholders for $200 million — around eight times its current market value — to complete a deal with Nigeria’s Midwestern to buy Canada’s Mart Resources, which produces oil in Nigeria.

The plan now is to buy all the $173 million loan notes from Toscafund, its 41% shareholder, as long as the placing completes. Shares remain suspended.

MX Oil dipped 1.5% to 0.68p even after Hong Kong media mogul Johnny Hon of Gate Ventures fame snapped up a 5% stake in the troubled oil minnow, which tanked last week after its Mexican joint venture collapsed.

Hon was executive producer of Lord Lloyd-Webber’s Sunset Boulevard, which starred Glenn Close and recently finished a run at the Coliseum.