10/08/2023

Tirupati Graphite (TGR), the specialist graphite producer, announced it has received c.$ 1 million net of prepayments from existing clients, to support the ramp-up of operations. The company said the prepayments announced today will significantly support its working capital requirements and provide suppliers and customers with confidence allowing us to maintain a strong pipeline of business.

Comment: In current stock market conditions small cap companies have to surprise the market in a very pleasant way in order to get their share price moving. Today’s announcement from TGR should be more than enough to do this and emphasise the company’s current journey to its production goals.

PYX Resources (PYX), the world’s third largest publicly listed Premium Zircon producer by Zircon resources, announced an operational update for the six months ended 30 June 2023. Highlights included premium Zircon production up by 33% to 5.7kt, sales also experienced growth, with a 34% increase to 5.2kt. The successful renewal of a 10-year exploration and mining license (maximum term) for the Tisma Mineral Sands project. The company said its diversified global client base has allowed us to manage and minimise risk. This coupled with the quality of our zircon has resulted in consistent growth in sales whilst our exceptional team on site have been instrumental in ensuring maximum efficiency.

Comment: The market has been particularly harsh regarding PYX, and perhaps on the basis that not many in the market actually know what Zircon is. However, today’s update should be enough to shake off the bearishness which has dominated since the company came to market.

Atlantic Lithium (ALL), the Chairman and another director acquired near 500,000 further shares between them at 17.2p, helping to calm investor nerves, after another bout of bear rumours. Its a repeat of the difficulties of Government of Ghana granting a mining licence this time due to concerns of an introduction of a new Green Minerals policy.  This could cause delays or worse for the ‘flag-ship’ development of ALL’s  Ewoya Lithium project.  The director dealing and the robust response, while being respectful was that there is no issue as they are working with the Government develop Ghana’s first lithium mine. The process is advancing through feasibility stages which show the exceptional profit potential due to its expected  low cost production. There is a development funding agreement with the $billion Piedmount Lithium Inc. The tenure is 560kn2 and 774km2 and is still being drilled out,  but already the  MRE (Mineral Resource Estimate) is  35.3mt at 1.25% Li20  for a 12 year mine life  generating  free cash flow of $2.4bn.

Comment:  Since the June the shares are down from 34p on license concerns toa  Mkt Cap of  £114.5m, clearly we have limited insight into the Ghanaian  licensing process but negotiations are clearly underway. It would seem, however more likely that ALL will be granted the licence than not, so the risk is missing the upside.

Aterian (ATN), the exploration and development company, announced the granting of two substantial exploration projects, in addition to several new exploration licences adjacent to existing projects in the Kingdom of Morocco. The company said it very pleased to report on these new projects and the additional licences secured as part of Morocco’s recent licence tender process. The increase in total land area and the expansion of the copper project portfolio clearly demonstrates its strong belief that Morocco represents an exciting mining destination, particularly for critical minerals vital for a successful energy transition. ATN also raised raised gross proceeds of £1,000,000 from Directors, management, existing shareholders and new investors.  The Executive Chairman and largest single individual shareholder, Charles Bray has invested £500,000 in the Fundraise consisting of £200,000 of new equity capital and £300,000 from the conversion to equity of a short-term debt.

Comment: ATN hits the market with both barrels in terms of today’s news, which is underpinned by the Executive Chairman adding half a bar to the mix. With all of this out of the way one would expect the shares to return to their recent brief 1.3p peak.

ZOO Digital Group (ZOO), a provider of end-to-end cloud-based localisation and media services to the global entertainment industry, announces its audited financial results for the year ended 31 March 2023. Revenue grew by 28% to $90.3 million (FY22: $70.4 million). Adjusted EBITDA grew to $15.5 million (FY22 restated: $7.1 million). EBITDA margin increased to 17.1% (FY22 restated: 10.0%). The company said it has delivered a fourth successive year of double-digit revenue growth and margin improvement in FY23 and it expanded its footprint in strategically important, high-growth regions.

Comment: A decent “blow the lights out” update from Zoo, something which underlines the consistency of the company’s performance, and considering that the shares are down 65% so far this year, how unfairly the market has been treating the company.

Galileo Resources (GLR) informed shareholders that initial lithium analyses by an independent accredited laboratory has confirmed the presence of lithium mineralisation over a significant width in the first hole completed at the Kamativi Project in Zimbabwe. Drilling continues to intersect multiple pegmatite dykes, some over notable widths in the same environment. The company said a new lithium discovery in the Kamativi region represents a significant find particularly in view of the historic mining and lithium potential in the region and the intersection of high-grade lithium in our first hole is particularly pleasing. Its detailed soil surveys and mapping have identified multiple pegmatites with swarms extending more than 4km in strike length.

Comment: GLR continues to make good progress in Zimbabwe, as it has made across the board of late. One would expect the stock to start to react from its recent 1p zone price range.

Power Metal Resources (POW), the AIM listed metals exploration and development company, announced the launch of lithium exploration at the North Wind Lithium Project in the Province of Ontario, Canada. The company said based on studies conducted by the Ontario Geological Survey, and highly anomalous lake sediment sampling results, the North Winds Project area is considered highly prospective for lithium pegmatite exploration, and the significant opportunity means it is moving ahead at pace with this programme. As is the case across its portfolio, it aims to undertake methodical and cost-effective exploration, and it looks forward to updating shareholders on the results in due course.

Comment: While the share price has yet to respond in kind, it is clear that with a new CEO at the helm the company is progressing in a material and newly focused way.

Cizzle Biotechnology (CIZ), the UK based diagnostics developer, announced an expansion of its current research programme with the University of York to develop its CIZ1B biomarker technology for early stage cancer diagnosis, and other potential applications in cancer therapy. The company said the University of York has been the home of the company’s research and development from its inception. Under the expert and insightful leadership of Professor Coverley, the laboratory team have made excellent progress in developing its test for the CIZ1B Biomarker to be used for detecting lung cancer at its earliest stage.

Comment: It was interesting to see shares of CIZ stir in a positive way earlier this week, as presumably clairvoyant investors successfully anticipated today’s positive news. Hopefully soon, the seller in the stock who has been irritating persistent will finally disappear into the sunset soon.

Dekel Agri-Vision (DKL), the West African agriculture company, provided a July production update for its Ayenouan palm oil project in Côte d’Ivoire. The company said the Palm Oil Operation continues to perform very well with production and sales volumes significantly ahead of 2022.  With prices continuing to be historically strong, albeit lower than the super peak 2022 prices, it remains on track to deliver excellent financial outcomes from the Palm Oil Operation in 2023.

Comment: Shares of DKL are around double what they were under 2p in March. One would expect the aftermath of the latest strong update to continue the re-rate.

Tertiary Minerals (TYM), announced the start of soil sampling and provided an update on its Zambian copper exploration projects. The company said it believed that its licence portfolio in Zambia is amongst the most prospective held by any listed junior explorer in Zambia and its data-sharing and technical cooperation agreement with FQM on the Mukai and Mushima North Projects is an additional differentiator. Despite this it trades at a significant discount to those peers. Now that it has received the necessary permits and work is once again underway, it expects to see an increase in news flow and looks forward to updating shareholders with its progress.

Comment: Although all small cap companies say they are undervalued, it can be argued with TYM that given the progress made of late, and sitting on a decent portfolio, TYM has a point.

Marula Mining (AQSE: MARU) an African focused mining and development company, reported assay results on the samples taken from the Bagamoyo Graphite Project in Tanzania as part of the Geofields Tanzania Limited Phase 1 Exploration Program have now been received. The assay results have confirmed the high-grade nature of the graphite mineralisation at Bagamoyo and in particular at the Mihuga Prospect where results of up to 19.71% Total Graphite Content. The company said it was pleased with the assay results from the work done by Geofields across the granted graphite mining licenses in Tanzania. These assay results confirm the high-grade nature of the graphite deposits, especially highlighted by certain coarse – medium – graphite flakes reported at the Mihuga Prospect.

Comment: It has to be said that 19.71% total graphite content could make a lot of Caran D’Ache pencils. In current cynical stock market conditions, high grade mineralisation is always a helpful trigger for share price growth.

Galantas Gold (GAL) announced that it has successfully intersected massive sulphides in drill hole FR-DD-23-196, a projected dilation zone at the Joshua Vein. This is the first exploration hole to be drilled from surface in 19 months, filling in a large gap in the earlier resource model. Assay results for this hole are pending. The company said that as it has kicked off drilling at the Joshua Vein from surface, it will focus on resource expansion at the Joshua and Kearney veins to expand known resources with a goal to increase the mill capacity from 180 tonnes per day to 500 tonnes per day. In addition, with the recent successful drilling at the Gairloch Project, including hole 23-GL-02 intersecting 1.88 g/t gold, 1.23% copper, 0.51% zinc, 0.01% cobalt and 4.64 g/t silver over 33 metres, it will look to expand it exploration efforts in Northern Scotland.

Comment: It will be interesting to see whether the word “massive” will be enough to reverse the 50% decline in GAL shares so far this year. At the very least Joshua Vein should allow the company to be seen in a more positive light.