16/08/2023

Hydrogen Utopia (HUI), a company specialising in turning non-recyclable mixed waste plastic into hydrogen and other carbon-free fuels, said that as announced on 21 June 2023, conditional heads of terms were signed under which Howard White has agreed, subject to contract, to grant HUI an option to acquire 49% of the issued share capital of Ohrid Organics Limited). Howard White has given an interview which discussed potential revenue prospects and costs of Ohrid Organics Limited. The interview can be accessed in this link: https://zakstraderscafe.com/howard-white-director-hydrogen-utopia-2/7517/

Comment: Fame at last. HUI released a RNS regarding the interview given by its director to Zak Mir. Shares of the company rose 37% in the wake of the interview, becoming the top riser on the London market intraday, as Howard White highlighted the “infinite runway” provided to HUI that will be delivered to it by its share of Ohrid Organics earnings.

Altona Rare Earths(LREE), a resource exploration and development company focused on Rare Earths in Africa, announced an operational update for its rare earths mining project in Mozambique.  The company said that in line with the plan announced on 5 July 2023, the Company has so far drilled 10 Reverse Circulation holes for a total of 790m. Drilling at Target 3 confirmed the presence of high-grade ore, additionally 76m at 3.426% Total Rare Earth Oxides were found from surface at Target 4 – a record for the project in terms of length and grade.

Comment: One of the few ways companies can achieve a significant re-rate in current stock market conditions is to surprise the market with news. This is what REE has done today, as well as underpinning the solid expectation so many have for the company.

Chaarat Gold (CGH), the AIM-quoted gold mining company, announced that it has entered into a binding conditional sale and purchase agreement with Gold Mining Company LLC, to sell its 100% owned Armenian subsidiary, Chaarat Kapan CJSC, which owns the Kapan mining operation in Armenia. CGH said the Proposed Sale allows Chaarat to focus on its growth pipeline in the gold sector with the aim of developing lower cost and higher value options within its portfolio. It accelerates its strategic objective of developing the Tulkubash project and evaluating opportunities for inorganic growth options.

Comment: An excellent piece of news for a market which is obsessed by cash / liquidity, or at least the lack of it. One would expect the sale of Kapan to greatly improve the market perception of this company.

First Class Metals (FCM) the UK metals exploration company, announced that it has signed a MOU with the Whitesand First Nation (WFN) for initial exploration on the Zigzag lithium project. FCM said it was delighted that having now visited the property and seen a ‘snapshot’ of Zigzag’s potential, the exploration of the Zigzag property will now commence in earnest. More so that it is with the support of the Whitesand First Nation. It will shortly have a team on the ground prospecting in advance of a sawn channel sampling programme aimed at identifying sections of the pegmatite for a focussed drill programme.

Comment: FCM has kept up with the newsflow and kept on delivering in terms of its exploration strategy since listing in July 2022. It should be the case that the market acknowledges this in terms of the company’s valuation, which rather unfairly remains the same as when it listed.

Concurrent Technology (CNC) announced a £2.64m acquisition and a £6.5m fund raise at 65p, which is an 11% discount to yesterday’s close. There is a £0.3k Retail Offer. We reported on the recent strong Interim Trading Update and the robust £14.5m order intake.  CNC supplies mission critical, high performance and rugged computer products and systems sold mainly to the military and defence but also to the telecommunication and aerospace sectors. Stryker, the acquisition, was founded in 1973 and is a supplier of rugged systems to major defence companies in the US including Boeing, Northrop and Raytheon  and is seen as a strategic fit in a market valued at  c. $2.3billion where CNC have made significant contract wins.

Comment:  It looks a good deal, and the over funding placing is well supported and worth apply for, although strong growth is priced in.

Insig AI (INSG), the chairman Richard Bernstein is also a fund manager and is already shoulder deep into this AI and machine learning investment company. Yesterday, he brought 150,000 shares at 15.71p which is the is lowest he has paid, and it takes his holding to 15.1%. This is before the conversion of his £1.75m, 8% coupon CLN that starts converting at 20p after the 31st December 2023. On a wave of AI excitement, it raised £6.7m at 67p back in 2021. The recently announced finals to March 2023, reported a reduced operating loss to £4.3m, although costs have been cut further. The net cash is around £1.2m after rising £0.9m at 17p post year-end. Its investments were written down by £16.6m to £15.5, and the £18m Mkt Cap may seem at an undeserved premium. Insig AI provide data and software platforms to the FCA’s 2023 TechSprint,  the Global Financial Innovation Network’s (GFIN) and Greenwashing TechSprint. It has also have been awarded a financial database assignment from a new client, as well as an annual licencing agreement for its ESG data from another new client asset manager. The expectations are for increasing revenues and to be operating profitably in the current year to March 2024.

Comment:  Richard Bernstein is usually an astute ‘hard-nosed’ operator and has access to funds, he may be hoping for a transformational event. At 18p the shares are speculative……

NFT Investments (AQSE: NFT), an investment firm, announced its unaudited results for the six months ended 30 June 2023. The Company said it had a net asset value of £33.983 million (3.37p per share). This is an increase of £8.953m (35.9%) in the six month reporting period. The company said it believes that its strong position and the value of its assets are not fairly reflected in the share price. NFT’s share price on 15 August 2023 of 1.65p represents a 51% discount to its 30 June 2023 net asset value.

Comment: We are in such a period of the stock market that companies can trade at significant discounts to NAV. Although it is obviously not possible, one wonders if it should be automatic that the share price of a company is prevented from trading at such discounted levels? NFT’s valuation is all the more unfair given the way that the company has clearly successfully negotiated the Crypto Winter.

Tern (TERN), the company focused on value creation from Internet of Things, announced  its unaudited interim results for the six months to 30 June 2023. The company reported NAV of £22.2 million as at 30 June 2023 (30 June 2022: £30.0 million, 31 December 2022: £24.9 million). This resulted in a reduction in net asset value per share from 6.4p as at 31 December 2022 to 5.7p as at 30 June 2023.

Comment: Perhaps rather surprisingly the latest RNS from TERN was not peppered with SpaceX / Wyld, as this development, could and should be a company maker, especially in terms of sentiment.

Tungsten West (TUN), the mining company focused on restarting operations at the Hemerdon tungsten and tin mine in Devon, UK, announced that, following the completion of Low Frequency Noise Trials, the company has now made a formal submission to the Environment Agency to secure the Mineral Processing Facility permit. The company also announced that it has fulfilled the conditions precedent to draw the second tranche of up to £2.975 million of the 2023 Convertible Loan Notes, announced on 19 May 2023.

Comment: It has certainly been the longest of long and winding roads for TUN in terms of Hemerdon. It would be hoped that the current incarnation will be the one that finally gets the company over the line.

Thor Explorations (THX), a West African-focussed minerals exploration and mining company, said that it was extremely encouraged by the first set of results from its initial drilling campaign which was designed to confirm the development of lithium-bearing minerals within pegmatite bodies that occur within its permit areas. This is the first area of its portfolio it has drilled and it is looking forward to both continuing the drill program on this prospect and extending the drilling over the other lithium-bearing pegmatites within our portfolio in Oyo State.

Comment: THX has hit the ground running as far as adding in the lithium aspect to its portfolio. One might consider that the company could inspire investors progressively with this new, and apparently successful angle.

Great Southern Copper (GSCU), the company focused on copper-gold exploration in Chile, announce the results of reconnaissance sampling at its newly-identified Suyay prospect, located within the San Lorenzo project area. The company said the high-grade gold-copper results from Suyay are highly encouraging and validate the strategy of targeted exploration of the spectral anomalies. The anomalous geochemistry combined with its early understanding of the geology and controls on mineralisation suggest that there is potential at Suyay for a high-level gold-rich porphyry or intrusive-related system.

Comment: GSCU continues to be the best mini miner that no one talks about. One wonders whether its success is based on the way that the company has no online following…

Belluscura (BELL), a medical device developer focused on lightweight and portable oxygen enrichment technology, announced that it has received purchase orders for over 6,500 of its next-generation DISCOV-R portable oxygen concentrator. This represents approximately $15 million of potential revenue to the Company, with initial production of the DISCOV-R expected to begin by the end of this quarter. BELL said it was very excited about the overwhelming interest in the DISCOV-R by online retail sellers and other medical equipment providers. Following the pre-market launch of the product and the patient usability study in June, initial feedback suggests it will receive the same or greater level of interest from leading home healthcare providers once it is launched commercially.

Comment: We have a timely win for BELL as the shares are over 100p down from last year’s 146p peak, something which appears rather overdone, even in 2023’s rather brutal stock market conditions.