Anglo American (AAL) provides an update regarding the unsolicited, non-binding and highly conditional combination proposal from BHP Group Limited. The Proposal comprised an all-share offer for Anglo American by BHP, with a requirement for Anglo American to complete two separate demergers of its entire shareholdings in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders. The all-share offer and required demergers would be inter-conditional. The Board said it has considered the Proposal with its advisers and concluded that the Proposal significantly undervalues Anglo American and its future prospects.
Comment: After years of being asleep at the wheel, and with a totally underperforming share price, we see AAL doing the dance of playing hard to get. It should be welcoming BHP with open arms, at almost any price.
Low cost gym operator, The Gym Group, announced that it has appointed International real estate advisor Savills to advise on its site selection, as it plans for circa 50 new openings across the UK over the next three years. Analysis from PwC shows that the opportunity in the UK extends to potential for between 600-800 additional sites in the low-cost segment. GYM said it looks forward to working with Savills to support its Next Chapter growth plan. It has identified the characteristics for high-performing gyms, and as it accelerates the rollout of quality sites, it is prioritising the best gym locations and delivering on its mission to give its members even greater access to its high quality, low cost fitness.
Comment: Clearly the business model of people paying not to exercise is a winner even during a cost of living crisis. One would imagine Savills are licking their lips at the prospect of delivering GYM’s rollout.
Cobra (COBR), an exploration company focused on the Wudinna Project in South Australia, announced re-assay results which support regionally scalable, high grade rare earth mineralisation at Boland which is amenable to in situ recovery. COBR said that when it first drilled the Boland prospect a year ago, it believed that the geological conditions were supportive of ionic mineralisation and amenable to ISR. It is now methodically de-risking aspects necessary for the Boland prospect to produce a resource that will have the capacity to change the cost and environmental profile of magnet and heavy rare earth mining.
Comment: Shares of COBR have been bumping along the bottom despite decent news. One would presume that now the fundraise is out of the way the stock will stand a chance of reflecting the proper value of the company.
Proteome Sciences (PRM), announced that the Company has secured a contract win from a US biopharmaceutical company using the Company’s mass spectrometry services for the analysis of samples for an on-going clinical trial. This project will be provided utilising the Good Clinical Laboratory Practice accreditation obtained by Proteome Sciences specifically for this type of project. The contract value is in excess of £500,000 and the Company considers that a good proportion of the work should be completed in this financial year. PRM said it has experienced good customer interest in its services in the first Quarter reflected by the considerable increase in customer contact and quotations across a broad range of projects.
Comment: Of course, the contract win at PRM is welcome, but it will take at least a handful more deals of this size to even begin moving the dial for the company, and get the shares off the floor.
Trinity Exploration & Production (TRIN), the independent E&P company focused on Trinidad and Tobago, provided an update on operations for the three-month period ended 31 March 2024. TRIN said “Trinity’s core business remains robust and cash-generative, with no long-term debt. It is focused on: 1) Maximising cash flow from our existing producing assets in a safe and efficient manner. 2) Rebuilding cash following the drilling of the Jacobin well in 2023 with a strong focus on cost management; and 3) Maturing detailed engineering for our two principal projects, particularly Phase 1 (Trintes 2P) of the Galeota Development and preparing plans for the exploration of the Buenos Ayres block, to a point that they can attract new investment capital or being monetised through sale or farm-down.
Comment: TRIN is clearly a company which is in a rather better state than the market’s £15m valuation, especially given the “no long-term debt.” However, it will have to hit its big 3 focus points to get the share price to turn around in a meaningful way.
Ferro-Alloy Resources (FAR), the vanadium producer and developer of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, announced the production results of the Group’s existing operation for Q1 2024. FAR said the first quarter of the year always produces challenging winter weather, but it is pleased to see a solid increase on the same quarter last year despite more severe weather. It is hopeful that it will be able to build on the success of this quarter throughout the rest of the year.
Comment: In fact, FAR has been something of a dark horse in terms of its production and progress. However, as is often the case, the market in its wisdom has chosen to focus on vanadium prices of late, rather than specifics at the company.
Empire Metals Limited (EEE), the AIM-quoted resource exploration and development company, announces that, in line with the Company’s strategy to accelerate the development of the Pitfield Titanium Project in Western Australia, management has undertaken an assessment of the Company’s non-core assets and as a consequence decided not to extend the completion date for the acquisition of the Stavely Project, located in Victoria, which expired on 6 April 2024, and as a consequence the acquisition has been terminated. EEE said that by rationalising the Company’s portfolio, the Board can apply all of the Company’s energy and resources on Pitfield as it targets a maiden resource in 2024, and the construction of a demonstration plant in the following year.
Comment: EEE has been hinting at wanting to go all in at Pitfield, something which is as sensible as it is logical. Anything which speeds up this process should be well received by the market.
Loungers (LGRS), an operator of all-day café/bar/restaurants across the UK under the Lounge, Cosy Club and Brightside brands, today announced a trading update for the 53 weeks ended 21 April 2024. LGRS said it was delighted with its performance over the year. It has consistently out-performed the sector on a like for like basis whilst having delivered a record 36 new site openings. As ever, its continued focus on menu innovation, value for money and exceptional hospitality that is driving the strength of its performance in both the mature estate and its new openings.
Comment: Although it could be argued that the whole LGRS concept sounds a little on the naff side, the stock market these days is not exactly overwhelmed by outperforming companies, and therefore can only admire what is being done here.
Mast Energy Developments (MAST), the UK-based multi-asset owner, developer and operator in the rapidly growing flexible power market, announced an update regarding business operational matters. MAST said it was pleased that its Pyebridge asset has successfully passed its SPD requirements, resulting in the retention of its current CM Contract’s associated annual gross profit margin income of c. £308,000. The next step in the process at Pyebridge is to kick off the 2nd Phase of the work programme, which is expected shortly.
Comment: It finally looks as though we are near the end of the massive bear run in MAST. That said, there still appears to be a long way to go to get the company up to scale.
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