12/07/2023

Reabold Resources (RBD), the oil & gas investing company, provided details of the high-grading exercise of its North Sea licences. The company said that with an abundance of value opportunities within Reabold, the high-grading of its recently acquired North Sea licence portfolio is driven by the Board’s disciplined financial framework, where the highest return opportunities have been prioritised. It will look to farm down these high-graded assets to help fund the de-risking and value creation process.

Comment: Quite rightly, RBD is underlining the both the opportunity in the North Sea, and how it is keen to extract value and de-risk as soon as possible. We wait on the market appreciating this approach sooner rather than later.

Baron Oil (BOIL), the AIM-quoted oil and gas exploration and appraisal company, noted today’s announcement by Reabold Resources in relation to offshore United Kingdom Licence P2478, in which Baron holds a 32% interest. Reabold Resources is the Licence administrator. BOIL it was grateful to the Licence administrator Reabold Resources and the NSTA for their efforts in establishing this way forward for the Licence, which recognises the quality of the technical work achieved to date and the progress being made towards the potential drilling of a relatively low cost and low risk exploration well on a material prospect.

Comment: It is pleasant to see one listed company thanking another one, in this case RBD. This is especially the case that one could argue that Baron Oil is a more popular play with small cap investors than most. At least it underlines the achievement that RBD has managed for shareholders of both companies.

Spiritus Mundi (SPMU), the SPAC which is seeking to acquire targets in Europe and Asia in the clinical diagnostics sector, has been notified that Tim Metcalfe, a non-executive director of the Company, has purchased 64,699 shares on 11 July 2023 between 2.82 pence and 3.42 pence. Following these transactions, Tim Metcalfe has an interest in 1,361,612 Ordinary Shares, representing approximately 2.76% of the Company’s issued share capital.

Comment: Given the recent share price rebound, which has been a stand out this week, Tim Metcalfe (is it THE Tim Metcalfe?) seems very keen on buying into this SPAC, whose Latin name alone might send shivers through the spines of those who had to study the subject at school. Hopefully, there will be more stakebuilding soon.

Neometals (NMT) announced the execution of a binding offtake agreement between Novana Oy and Glencore for VRP1. NMT said securing take or pay offtake for 100% of VRP1 vanadium products represents a significant milestone as it progresses towards a FID this quarter. Removing volume risk on offtake is seen as a key requirement for securing project finance and it has mitigated this risk with the take or pay nature of its Offtake Agreement with a Tier 1 counterparty in Glencore.

Comment: Not that the share price is necessarily everything, but it would be disappointing if shares of NMT did not jump off their lows following the latest Tier 1 / Glencore. It is always a big event when a small cap pulls off a coup like this.

IOG (IOG) provided an operational update in advance of the company’s half-year 2023 results. The company said that following the successful intervention and production ramp up, the Blythe H2 gas rate has stabilised at 32 mmscf/d, within the 30-40 mmscf/d pre-well guidance range, with no indication of formation water. As expected, initial H2 production data indicates better reservoir quality than at H1 and supports our existing Blythe gas in place and reserves estimates. It expects 2H23 production to average in the 20-30 mmscf/d range.

Comment: It is evident that after what could be described as the odd bump in the road, the tone of IOG’s update shows it is keen to deliver a business as usual message. It will be interesting to see whether this strategy delivers as far as the share price is concerned.

GreenX Metals (GRX) advised that today the company requested an immediate voluntary trading halt in its shares on the ASX, pending an announcement regarding a capital raising. The company has requested that the trading halt remain until the earlier of an announcement to the market regarding the above or the opening of trade on ASX on 14 July 2023.

Comment: Shares of GreenX are 5x in a year, so it makes sense that the company would raise fresh capital. One would expect the bull run to re-commence soon after, given how well the fundamentals back this company currently.

Renold (RNO), an international supplier of industrial chains and related power transmission products, announced its audited results for the year ended 31 March 2023. Revenue up 26.6% to £247.1m (18.8% at constant exchange rates) (2022: £195.2m). Adjusted operating profit of £24.2m (2022: £15.3m), up 58.2%; return on sales 9.8%, up 200bps. The company said it was delighted with the Group’s robust performance during the last financial year which delivered record results and exceeded market expectations, reflecting the benefits of the strategic programmes implemented in recent years.

Comment: In Renold, a rather under the radar company, we have a blow the lights out update, exceeding market expectations. Apparently, all the issues of Brexit, the weather and inflation that many companies complain about, have not impacted here.

Itaconix (ITX), a specialist in sustainable plant-based polymers, provided a trading update for the half year to 30 June 2023. The company achieved its fifth consecutive year of record results for the first six months, with unaudited revenues of $4.0 million. These revenues represent 32% growth over the first half of 2022 and 58% growth over the second half of 2022.  Additionally, they are 72% of the full year revenues for 2022 and 155% of the full year revenues for 2021. The company said its record first half revenues place it in a strong position to meet market expectations for 2023.

Comment: Part of the remit of the Hotlist is to highlight companies that are flourishing, especially at a time when the financial media is singing doom and gloom. The metrics of ITX speak for themselves and offer an opportunity which allows investors to ride out the present economic turbulence.

Dekel Agri-Vision (DKL), the West African agriculture company, provided its half year production update for the period ending 30 June 2023 for the Ayenouan palm oil project in Côte d’Ivoire and the cashew processing plant at Tiebissou, Côte d’Ivoire. The company said four consecutive months of very strong CPO production coupled together with continued high CPO prices have delivered an excellent H1 2023 operating performance for the Palm Oil operation.  With significant levels of CPO and PKO stock on hand at the end of H1 2023 due to the late high season, the platform is set for a strong performance in H2 2023 compared to H2 2022 as well.

Comment: DKL very much turned the fundamental corner in the past year, and this positive change should be aided by the late high season this year. We should see the palm oil / cashew combo drive the company well over the near term.

Thor Explorations (THX) provided an operational update for the Segilola Gold mine, located in Nigeria, and for the company’s mineral exploration properties located in Nigeria, Senegal and Burkina Faso for the three months to June 30, 2023. The company said it was pleased to report another solid quarter of gold production at Segilola for Q2 2023. The planned step-up in mining operations has been achieved and it is well positioned to meet our targets for H2 2023. The standout highlight of the Quarter has been the acquisition of a potentially significant and prospective lithium exploration portfolio and the commencement of an initial drilling program where visual inspection of the RC drill chips has been very encouraging, with 20m true thickness of pegmatite intersected over 150m of strike.

Comment: It may be argued that the longer that shares of THX remain the wrong side of 20p, the more it highlights the value that lies within the company. As it states the highlight of the quarter has been the lithium acquisition, a prospect that it is set to finance with current cash.

Oncimmune (ONC) have announced a new board. The shares are down from 104p over the last 52 weeks to 16p.  Oncimmune own patient technologies that increase the understanding of the human immune system was sold for £13m in May 2023, and after paying off debt around £6.7m remains. The new CEO, Martin Gouldstone will focus on commercializing Oncimmune’s ImmunoINSIGHTS platform. This provides services that enables life science organisations to optimise drug development and delivery, leading to more effectively targeted and safer treatments for patients. .  Martin has spent most of his career to date in engineering and service companies, including more than seven years with the McLaren Group and over four years at Williams Advanced Engineering.

Comment: Drug development is a well-funded sector and ONC’s services  have a new chance to eventually benefit. On this basis shareholders may have seen the worst on the downside.

Shoe Zone (SHOE) announced that since its last Trading Update on 9 June 2023, the company has achieved an exceptional month of sales. Trading has significantly exceeded management expectations due to continued strong demand with volumes up double digit on last year, despite no price increases on our core ranges. The company said alongside exceptional trading, and has also experienced margin improvements due to the lower container rates and favourable foreign exchange rates with management expecting these improved margins to continue for the rest of the financial year. As a result, it now expects adjusted profit before tax for the financial year ending 2 October 2023 to be not less than £13.5m.

Comment: It would appear that in a cost of living crisis consumers decide not to buy eggs, pay their mortgage or gas bill, but channel their inner Imelda Marcos, and head for Shoe Zone. It would appear that footwear is the new non-discretionary item.