Hummingbird (HUM) noted the announcement made by Pasofino Gold Limited regarding a non-brokered private placement totalling approximately US$2.33 million, inclusive of a US$2 million investment by Hummingbird. This investment increases Hummingbird’s shareholding in Pasofino to 53%. HUM said the optimisation of the Dugbe Gold Project presents a unique opportunity to materially increase the project’s value in the near term. In collaboration with Pasofino, it was focused on unlocking the full potential of this highly promising gold project and bringing it into full production.
Comment: Today’s RNS reminds the market not only of the potential of Dugbe, but also that 2024 is the year when the company will cement its production credentials.
Pensana (PRE) advised that the technical due diligence report on the Longonjo rare earth project in Angola has been reported by The Mineral Corporation (TMC) to ABSA Capital (ABSA) as the Mandated Lead Arranger for potential debt funding of the Project. PRE said the review was based on the re-engineered, reduced capital cost of the project for financing purposes following our review in Q2 of 2023. A huge amount of work has gone into the capital cost estimate which as noted by Russell and the team is based on very detailed estimates and it was pleased that despite the current inflationary and cost pressures the estimate has been confirmed around US$217 million, which includes US$20 million in contingency.
Comment: Shares of PRE have been trading at the wrong end of their recent 20p – 40p range, and therefore the aftermath of today’s report on Longonjo with a reduced project cost could be a driver for a stock price rebound.
Plexus Holdings (POS), the AIM quoted oil and gas engineering services business, provided an overview of the Company’s strategy following the signing of a new IP Licence Agreement with SLB and confirmed receipt of the US$5.2m Licence Agreement payment. POS said looking to the future, Plexus’ focus will be on the continuing development of its POS-GRIP friction-grip method of engineering for O&G applications and beyond. Plexus’ engineering team holds a 20-year lead in unique proprietary patented “preventative” metal-to-metal seal technologies and its associated knowhow, making Plexus well suited to exploit many additional applications.
Comment: As in the case of most small caps that have managed to rally sharply in the recent past, shares of POS have halved from their September peak. Today’s announcement should remind the market that the enthusiasm for the stock last year was well placed.
Bradda Head Lithium (BHL), the North America-focused lithium development group, announced further results from the Phase 2 core drilling at San Domingo, Arizona. BHL said the programme has delivered an abundance of encouraging results over the December holiday break. As it reaches the end of this current San Domingo drilling exploration program, its objectives have been met and indeed surpassed and, as a result its expectations heightened.
Comment: Although BHL is making progress in proving up its considerable assets, it may be that the market’s main concerned remains focused on the company’s cash position. This factor still looks to be keeping a lid on the share price.
Revolution Bars Group (RBG), an operator of 58 premium bars and 22 beautiful gastro pubs, provides further detail on Christmas and H1 trading and outturn for FY24. REVB said the 2023 festive trading period was its best for four years. It has been delighted with the strong growth in Peach, Revolución de Cuba and Founders over the festive period. It was pleasing to see its Revolution guests experience their first uninterrupted Christmas since 2019, driving growth for the brand.
Comment: It would appear that RBG’s punters were happy to drown their sorrows over Christmas. But perhaps most crucially it will be how the company performs from Dry January onwards which is key.
Premier African Minerals (PREM) provided an update on further assay results and current progress on Zulu Lithium and Tantalum. PREM said ZDD162 and ZDD163 were very pleasing results coming from the Southeast zone under development which is not part of the current pit operations. This Southeast zone appears to be Spodumene Quartz Intergrowths dominant with more than 90% of the mineralisation associated with spodumene. ZDD165 is infill from its North pit (Main zone) and supportive of its conclusions to date.
Comment: Assay results for PREM may be regarded by some as being something of a sideshow given the way that we are in the run up to production in February. It is surprising that the shares have not squeezed higher as D Day approaches.
Mirriad Advertising (MIRI) The year end Trading report of December shows revenue of £1.8m up 20% while the Interims to June reported little Revenue growth at £592k but an operating loss of £7.5m. The H2 cash burn rate is reported to be lower than expectations and is evidenced by Y/E cash of £6.1m down from June’s £9.8m. There are agreements in place with supply side partners representing c25% of the total US TV advertising market, up from 8% in Q3 2023 with substantive negotiations ongoing with two further US majors, representing an additional 30% of US TV advertising market. They will use MIRI’s AI-powered virtual in-content advertising platform to generate specific incremental ad revenue via in-content product and brand placements. Miri’s ad format does not interrupt the program which is much preferred by the viewer.
Comment: At 2p with a £9.8m Mkt Cap it does not reflect the size of the opportunity just the current tight cashflow… maybe it should seek a US listing.
ZOO Digital Group (ZOO), a provider of end-to-end cloud-based localisation and media services to the global entertainment industry, today provides an update on trading. ZOO said on 31 December 2023, the Group had net cash of $8.9 million and expects to maintain a positive balance with unused debt facilities available at the March year-end and an improving cash balance in the first half of FY25 due to the recommencement of orders.
Comment: ZOO’s share price performance reminds us that the London market is not big on media companies, even those like this one which is sitting on a significant amounts of cash.
Metals Exploration (MTL), a gold producer in the Philippines, announced its quarterly results for Q4 2023. Record annual gold revenue of US$166.7 million (FY2022: US$124.4 million). MTL said this was another very strong quarter for MTL, leading it to achieve record annual gold revenues and production, exceeding the upper production guidance of its revised 2023 forecasts. Throughout the year, it also maintained its excellent safety record while delivering higher gold recovery levels and strong cash flows, which have enabled it to continue to further deleverage the Company.
Comment: Shares of MTL have of late been retesting four year highs, but given the price of gold and the level of production here, it could be argued that the stock should be considerably higher.
Frenkel Topping (FEN), a specialist financial and professional services firm operating within the personal injury and clinical negligence marketplace, provides a trading update for the financial year ended 31 December 2023 and an outlook for the current financial year. Revenue increased by 32% in FY2023, driven by acquisition and organic growth. FEN said volatile market conditions have seen clients channelling funds into high interest savings accounts and led to a general reluctance to invest in equities which unsurprisingly has meant high margin recurring revenue being impacted, with a consequential impact on both revenue and EBITDA for FY2023 being slightly below expectations by c6-7%.
Comment: Given the economic lay of the land it could be argued that FEN has actually done rather well in only having a minor slip in its FY performance. It may be the case that the market has already overly factored in the negatives, at least in terms of the share price.
URA Holdings (URAH), a Gemstone mining company about to move their flagship Gravelotte Emerald mine into production, announced that Capital Plus Partners Ltd and CMC Markets UK Plc have been appointed as the Company’s joint UK brokers with immediate effect. URAH said that as it evolves from an exploration and development Company into an emerald producer, it was embarking on a transformative chapter. As part of this transformation and to enhance our market presence and deepen our engagement in the secondary market it was delighted to announce the appointment of Capital Plus Partners and CMC as joint brokers, alongside Peterhouse Capital.
Comment: URAH is certainly now all brokered up, and it is to be hoped that this state of affairs will finally get the market to appreciate the prospect of significant emerald production, and in short order.