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STOCK MARKET NEWS – RNS HOTLIST

RNS Hotlist August 2: Cap-XX, Contango, Cyanconnode, Empire Metals, GreenRoc, Nanoco, Oxford Biodynamics, Vast

02/08/2023

RNS Hotlist August 2: Cap-XX, Contango, Cyanconnode, Empire Metals, GreenRoc, Nanoco, Oxford Biodynamics, Vast

Empire Metals (EEE), the AIM-quoted resource exploration and development company, is pleased to announce that an Airborne Gravity Survey has recently been flown at the Pitfield Project, located in the premier mining jurisdiction of Western Australia. The company said it was making good headway in understanding the size and scale of this globally significant titanium discovery.  The main objective of the gravity survey is to map variations in the subsurface rock density at Pitfield across the 40km by 8km magnetics anomaly at a high resolution that will assist in drill target selection, with priority given to identifying and testing the thicker and higher-grade parts of this giant titanium-rich mineral system.

Comment: EEE finesses this year’s transformational news regarding titanium, with additional meat on the bone from Pitfield. This should maintain the on-going re-rate in the stock.

Vast Resources (VAST), the AIM-listed mining company, announced the Q2 production report at its Baita Plai Polymetallic Mine in Romania. The company said achieving operational breakeven is a great result and it is pleased to see June’s performance as it continues production ramp up plans. Its production goals are linked closely with its exploration activities, and the positive Phase 1 results reported post period end give the team further confidence in its ability to establish Baita Plai as a profitable long-life mine.

Comment: For a company apparently vying with Predator (PRD) in serving up as many fund raises as possible, we may breathe a sigh of relief that achieving operational breakeven at Baita Plai suggests that VAST may soon start funding itself from operations, rather than just shareholders.

Contango (CGO) announced that photos from the formal Muchesu Mine Opening Ceremony, held yesterday and officiated by His Excellency Dr Emmerson Mnangagwa, are now available at www.contango-holdings-plc.co.uk/the-lubu-coal-project/ and its official Twitter account (@ContangoPLC).  At the ceremony His Excellency Dr Emmerson Mnangagwa gave a presidential address.

Comment: The RNS does indeed contain plenty of pretty pictures. It is to be hoped that the opening of Muchesu enables the recent share price recovery to continue, especially through the 5.5p resistance zone.

Oxford BioDynamics (OBD), a biotechnology company, announced that it has successfully raised gross proceeds of £5.6m pursuant to a placing, conducted via an accelerated bookbuild process and through direct subscriptions. In addition, retail investors are able to participate via the PrimaryBid platform and together with the Placing and the Subscription. The PrimaryBid Offer remains open.

Comment: £5.6m is no small chunk of change given the current relative lack of liquidity in the small cap market, with director participation a plus point.  It would have been helpful if the company had reminded us in the latest update what the funds will be used for.

Cyancannode (CYAN) patient shareholders have been soon rewarded as an order for further 300,000 Omnimesh Modules used for smart metering for delivery in India by Q3 2024, is announced. This is the second order received under a 3m order strategic framework agreement signed in February 2023 and makes it 900,000 so far.  An Indian Government scheme mandates compulsory installation of smart meters across the country with an ambitious target of 250m meters by 2025. Cyan’s recently reported finals to March showed an increased EBITDA loss to £2.9m.

Comment: As the order book is converted into sales, the shares should rally and the market in them is liquid enough to trade.

Nanoco (NANO) shareholders with around 5% revolted and called General Meeting, which is not being backed by the Institutional Shareholder Services at the coming GM to be held on 14 August 2023. It also announced that there is a new shareholder Oryx International Growth Fund with over 3%. These events need a little unravelling … The transformational leap forward for this 20-year-old company happened in February 2023, after Nano accepted a $150m out of court litigation settlement from Samsung, who used Nano’s Dot technology in their QLED Television. Market expectations, however, where for a far higher Court settlement including damages. Share fell share fell as shareholders revolted. The Terms for the Litigation Settlement is for the second tranche payment of $75m to be received by end of February 2024.  The management have committed to paying 10p or 12p per share to shareholders either as a special dividend or some other means. The key focus is in Display usages, as the market for flat panels is est. at 250m pa, creating a decent sized opportunity for Nano as a manufacturer of these dots and licensing the IP to any of a  number of TV manufacturers.

Comment: Assuming a 10p cash distribution is made in six months the effective in-price is 8p giving a Mkt Cap of £27m. As manufacturing starts and with the potential for selling licences the shares seem undervalued and the risk is missing the upside.

GreenRoc Mining (GROC), a company focused on the development of critical mineral projects in Greenland, announcd that it has raised gross proceeds of £470,000 by way of a placing at a price of 3.8p. The net proceeds of the Placing will be put towards finalisation of the preliminary economic assessment (PEA) of the Amitsoq project.

Comment: Shares of GROC have nearly halved in the run up to the latest fundraise. One would hope that now it is out of the way, the run up to PEA on Amitsoq may be the driver for a rebound.

CAP-XX (CPX), a company involved in the design and manufacture of thin, prismatic supercapacitors and energy management systems, announced a pre-close trading update in respect of the financial year ended 30 June 2023. Revenue is expected to be A$4m and adjusted EBITDA is expected to be (A$1.2m) after excluding A$2.2m in exceptional items relating to legal expenses and provisions for patent protection litigation, and executive severance charges.  Year-end cash reserves were A$2.6m. The company said the implementation of its new sales strategy is already raising its local geographic footprint in key markets, improving customer service levels and project management. It was encouraged that this tailored approach will see a further strengthening of its distribution partner base in the short term and support its objective to profitably build the CAP-XX revenue base in the near term.

Comment: There was something of a buzz and recovery in shares of CPX last month. It will be interesting to see whether the latest RNS is enough of a positive to cause the nascent recovery to continue.

Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.

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