11/07/2023

Future Metals (FME), announced enhanced metallurgical recoveries from the leaching of flotation tailings, reagent optimisation test work and the chromite concentrate potential for its wholly owned Panton Project. The results de-risk the process flowsheet for Panton and improve the project economics. The company said it can now expect to recover approximately 86% of PGM metals from Panton ore feed and importantly over 93% of palladium. Combined with its ability to consistently achieve >280g/t PGM3E1 concentrate grades, Panton compares very favourably to analogous South African PGM operations.

Comment: Today’s news from FME has arrived just in time to go with the recent rebound in the shares off recent lows. One would expect the stock to make a decent effort on returning to post March highs at 4p over the near term.

Empire Metals (EEE), the AIM-quoted resource exploration and development company, announced the results of the first petrographic and mineralogical studies on the high-grade titanium discovery at the Pitfield Project, located in Western Australia, which confirm the presence of ilmenite, an important economic titanium-iron oxide mineral. The company said It is very exciting to see the results from its initial petrographic and mineralogical studies, confirming the presence of ilmenite within this exceptional titanium-rich mineral system. It has a magnetics anomaly covering 40km by 8km, whose core is 30km long and extends to a depth of at least 6km. This magnetics anomaly appears to be coincidental with the currently known extent of the ilmenite mineralisation.

Comment: Rather inappropriately, EEE shares remain well off where they were in March, before the “giant” discovery at Pitfield was made. This aberration should not last long, especially given the way that announcements like today are continuing to back the value in the project.

First Class Metals (FCM) the UK metals exploration company, announced that it has signed an agreement with OnGold Investment Corp in respect to the Pickle Lake Property, McGill Township in Ontario. The company said it was very pleased with this acquisition which has significantly increased its area of exploration, not only because it is contiguous to North Hemlo, but also for its proximity to West Pickle Lake and also the significant gold assay in the lake sediment sample. Furthermore a share-issue deal for such an asset further confirms the industries confidence in its ability to deliver success. FCM will now formulate an exploration programme to follow on from the excellent work by OnGold.

Comment: FCM in its first year on the market has been busy not only proving up its assets, but also expanding them, as we have seen today. For the stock to be anywhere near its 10p IPO price appears to be a state of affairs which will not last long. After all, as recently as December the shares were trading at 18p, something which seems a rather more fair valuation in the light of today’s news and the company’s near term prospects.

Great Southern Copper (GSCU), the company focused on copper-gold exploration in Chile, announced an update to its exploration programme at the Teresita prospect located within the Especularita project. Results for 160 rock chip samples received with assay grades up to 5.97% Cu and 13.7g/t Au. The company said exploration at Teresita over the last few months has produced very exciting results which is it confident will translate to multiple drill targets for multiple deposit types of high-grade copper and gold mineralisation.  It looks forward to receiving the results of its drone magnetic survey which will help to optimise the location of drilling targets for the exploration programme at Teresita.

Comment: Ironically a company which has delivered such a strong update today, is one that has practically no social media following, or mentions at all. Nevertheless, the shares should progress back towards May peaks near 2p given how strong its grades are.

Cornerstone (CSFS), a foreign exchange and payments company, provided an unaudited update on trading for the six months ended 30 June 2023. The company said this has been an excellent six months for Cornerstone with substantial revenue growth, and it was delighted that it has achieved its first half-year period of being adjusted EBITDA positive. This has been driven by its enhanced sales efforts as it realised the benefits of the actions that it took at the end of last year to strengthen its team. As a result, it remains on track to deliver significant growth for the full year and look to the future with confidence.

Comment: The rebound in CSFS since May has hinted that the company was / is doing well, and that the hammering the share price took during 2021 and 2022, was rather overdone. A return to the early 2022 levels near 20p would not be inappropriate over the rest of the summer.

Eco (Atlantic) Oil & Gas (ECO), the oil and gas exploration company, announced that it has signed a legally binding Letter of Intent pursuant to which its wholly owned subsidiary, Azinam Limited, will farm out 6.25% Participating Interest in Block 3B/4B, offshore South to Africa Oil SA Corp, a wholly owned subsidiary of Africa Oil Corp. The consideration for the Acquisition is up to $10.5m in cash. ECO said it was very pleased to agree this transfer of a portion of our WI on the Block to its strategic alliance partner Africa Oil. The restructure of the WI will result in Africa Oil holding 26.25% and Eco 20% and will strengthen the JV position amid ongoing negotiations with third parties to farm into the Block and execute a drilling campaign. Since Africa Oil is already established as JV partner and Operator on the Block, receipt of the requisite regulatory approval for the transfer is expected to be straight forward.

Comment: Although the company may have come across as somewhat over-confident in its messaging to the market in the past, $10.5m is no small chunk of change, and could / should allow for a reasonable rebound in the share price, if only back towards the 20p zone.

Predator Oil & Gas (PRD), the Jersey based Oil and Gas company, announced the successful completion of drilling and logging operations for the MOU-4 well. The company said the MOU-4 well has confirmed the presence of the Moulouya Fan southeast of its previously mapped extent. The M1 Sand interval had not previously been considered as a reservoir target and therefore the results of the NuTech wireline log analysis over this interval will be of particular interest to determine whether it may or may not be a new candidate for rigless well testing.

Comment: PRD seems to be in a league of its own at the moment with its mix of drilling news and frequent fundraising. However, the market seems to be quite happily swallowing the latter, something that might lead some to believe the company is sitting on something rather significant in its wells.

Sosandar (SOS), the women’s fashion brand, announced its financial results for the year ended 31 March 2023 and an update on trading for Q1 of the current financial year. Revenue growth of 44% to £42.5m (FY22: £29.5m). First full year of profitability, delivering PBT of £1.6m which is a £2.2m positive swing versus the previous year (FY22: £0.6m loss). The company said it was delighted to report on what has been a transformational year for Sosandar. Despite the challenging macroeconomic backdrop, it has seen increasing demand for its products across all categories with strong trading across both Sosandar.com and through our third-party partners.

Comment: To achieve a win in any sector in 2023 has to be regarding as a massive achievement. For SOS doing this in what is a cut throat space, is all the more impressive.

Firering Strategic Minerals (FRG), an exploration company focusing on critical minerals, announced the successful commencement of its Phase II Auger Drilling Campaign at its flagship Atex Lithium-Tantalum Project in Côte d’Ivoire.  The Phase II Auger Drilling Campaign is undertaken in conjunction with Ricca Resources Limited following its $18.6 million investment to advance Atex to Definitive Feasibility Study announced on 2 November 2022. The company said it was excited to announce that, together with Ricca, it has now commenced its Phase II auger drilling campaign which is progressing very well.  A total of 300 holes were drilled as of 8 July 2023 for a total of 1,341m of drilling, resulting in an average hole depth of 4.48m.

Comment: FRG is now rapidly filling the news vacuum for H1 2023, and reminding us that it has the $18.6m backing of Ricca Resources. This is interesting given that the market seems to be behaving as if it had not taken place. Therefore it is ironic that the share price is back at listing lows, despite the financial backing.

Ondo InsurTech (ONDO), the London-listed leader in claims prevention technology for home insurers, announced that it has agreed a restructuring of its 5-year loan notes with its largest shareholder, providing additional non-dilutive financing flexibility for continued rapid roll-out of the LeakBot system. These loan notes, which are interest-free until 21 March 2024 form part of the consideration for the acquisition of the Leakbot business from Homeserve as set out in the prospectus dated 21 March 2022.  The company said the financial flexibility provided by these terms granted by our largest shareholder supports our accelerated drive to profitability as it initiates contract roll-outs in Denmark, Sweden, the UK and the USA.

Comment: Another day, another RNS, and ONDO is making sure that it has the cash for what already looks to be a rapid international roll-out. This is perhaps gaining traction even faster than many in the market were expecting, even fans of the company.

Kinovo (KINO) After restructuring the business developed into a specialist property services group,  focused on Regulation, Regeneration and Renewables which after some reversals is showing rewards. It’s finals for March 2023 reported an 18% increase in Revenue to £62.7m with PBT up 58% to £4.4m and EPS improving 63% to 5.97p with the price at 42p gives P/E of 7x. There is three year Revenue visibility of £146m which implies an EBITDA of £12.9m  and  with  net cash of £1.1m the management  are able to accelerated organic  growth  with add-on acquisitions.

Comments: A strong set or results show its moving from a recovery into growth.

Synectics (SNX) design and integrate advanced security and surveillance systems that protect people, property, and assets. Its Interims to May 2023 showed a 14% increase in Revenue to £21.9m mainly due to a strong Oil and Gas market with other sector such as gaming, public space, transport, and critical infrastructure trailing behind. There is a sharp increase in underlaying profits to £0.8m with an EPD of 3.7pand business will be weighted to H2. As the consolidated firm order book was strong at £28.4 million, well ahead of last year’s £24.5m and with almost two-thirds of it expected to trade in H2. There is net cash of cir. £4.0m, which is sufficient to fund organic growth and invest in developing its solutions as well as the increased dividend to 2p at the full year. On low ball assumptions the share at 106p, could on a  1.9% yield with a P/E of cir. 13.5x for the November year-end.

Comment: The momentum is building for a strong second half.