21/07/2023

I3 Energy (I3E), an independent oil and gas company with assets and operations in the UK and Canada, revealed not one, but two TR1s. They revealed that institutional shareholders Premier Miton and JP Morgan, have both added to their stakes in the company.

Comment: Given the chunky yield, low p/e, and the way that i3 shares are back at last year’s 12p support zone, it is not surprising that two key institutional investors in the company have topped up their holdings. One would expect others to enter the fray given the way that i3 shares are clearly in the value zone.

Premier African Minerals (PREM) announces that the company has entered into a Loan Facility Agreement with George Roach, for up to £1.7 million. Premier can request a draw down of the Loan in two separate requests with the first being for £1 million and the second request being the remaining balance of the Loan. Each Utilisation Request will be repayable on the date falling 6 calendar months after the Utilisation Request.

Comment: Some in the market may be surprised that Mr Roach has been able to find £1.7m between the sofa cushions, to help out PREM. It may be taken as an indication of how keen he is to get the company over the line.

THG (THG) provided the following update on the outcome of its strategic review. The trade and assets of THG OnDemand have been sold to a Newco led by the existing OnDemand management team and funded by Gordon Brothers, the advisory and investment firm. The Newco will continue to be a client of Ingenuity, with the provision of technology, operational and digital services. The company said through the years, its incubator division OnDemand has cultivated its talent, technology and trading strategies. It was delighted to see management and Gordon Brothers continuing the fantastic work of the OnDemand team, and has no doubt the ProBikeKit business will continue to thrive under Frasers Group. It will remain close partners with both the OnDemand management team and Frasers Group through continued Ingenuity services.

Comment: Shares of THG have already soared since the beginning of last month, so it may be that the latest outcome of its strategic review means that it is better to travel than arrive. Nevertheless, given how low the stock still is as compared to just a couple of years ago, it may be that the squeeze higher continues.

Renalytix (RENX) announces opening the commercial availability of kidneyintelX.dkd™ testing in Saudi Arabia, Bahrain, Qatar, Oman, Kuwait, and United Arab Emirates through a distribution agreement with Vector Pharma. Following the recent announcement of FDA marketing authorization for kidneyintelX.dkd, Renalytix will take advantage of select opportunities to expand testing services outside the US market with qualified distribution partners. The company said when you consider the markets in the Middle East are experiencing high rates of T2D and CKD, diabetic kidney disease management has become a core tenet of many Ministries of Health in the GCC. Being able to introduce kidneyintelX.dkd™ to complement the current care protocols will not only benefit the management of individual patients, but it will also address significant objectives to improve chronic disease diagnosis and treatment for the healthcare ecosystem as a whole.

Comment: One might have expected RENX shares to do even better than they have in the recent past, given the FDA news. However, one cannot imagine much further downside from current levels given the improved fundamentals here.

Filtronic (FTC) won a £3.2m order for the European Space Agency to develop a series of advanced mmWave products to enable broadband connectivity for LEO (Low Earth Orbit) satellites to receiving ground stations. FTC have over 45 years of experience in designing and manufacturing advanced radio frequency communications products supplied mainly to mobile telecommunications infrastructure, public safety, defence, and now increasing aerospace.  Its Finals to May 2023 are to be reported on Tuesday 1^st August and Revenue is expected to be slightly lower than last year at £16.3m and EBITDA down to £1.3m from £2.7m with net cash estimated at £1.9m.

Comments: This is strategically important news, given the chunky number involved for FTC.

Surface Transforms (SCE)  improved slightly to 34p, yesterday after all four of its non-executive directors, including the David Bundred the Chairman, brought  930,608  shares  between them at around 32.2p worth £300,000.  In October 2022,  £18m was raised at 40p a share to massively increase factory production to meet strong demand its carbon fibre reinforced ceramic automotive brake discs which are used for high-end electric vehicles. At July’s Trading update expectations had to be  reset again  after a string of  operational difficulties impacted on manufacturing output. The new CFO and COO reported that output continues to improve but has not yet reached target levels. Sales for the six months to June 2023 are expected to up 14% to £3.3m. Although production difficulties not recurred, there are still individually small production disruptions that have slowed the ramp up in output.

Comment:  The NEDs have shown strong support for the new team, and leading from the front on share buying is one of the pillars of the stock market on a fundamental basis.

Kistos (KIST), the low carbon intensity hydrocarbon producer, announced that further to its announcement on 30 May 2023 it has successfully appealed against the Netherlands Ministry of Economic Affairs decision not to extend the term of the M10/M11 licence. This ruling is effective immediately and the licence is extended by five years. Kistos NL1 B.V. holds a 60% operated working interest in the licence and is partnered with EBN (40% working interest). KIST said this is very good news both for Kistos and for the Netherlands. It increases the potential for domestic gas demand to be met with domestic supplies, which has positive implications for CO2 emissions. Whilst the delay to the M10/M11 project has been frustrating, it was pleased that the right outcome has been achieved and look forward to working with the local municipalities to obtain the relevant permits to appraise the field.

Comment: Shares of KIST have been disappointing over the course of 2023 to date, so it will be interesting to see how much of a revival will be delivered off the back of what is clearly very strong positive news.

Condor Gold (CNR) announced that following a robust and economically attractive Bankable Feasibility Study, also known as a Feasibility Study, on the La India open pit, it appointed H&P Advisory Limited (Hannam and Partners) to seek a buyer for the assets of the company. CNR said there remains substantial interest from gold producers to acquire the company’s assets. Wholly owned, fully permitted, construction ready gold mines with potential production of 150,000 oz gold per annum, in major Gold Districts, with the land and a new SAG Mill package purchased and a construction period of only 18 months are rare. There are currently eight companies under NDAs, five non binding offers received and three site visits completed.

Comment: Shares of Condor rallied hard in March / April off the back of the sale strategy, but it would appear that some investors have lost patience. The revelation that there is a decent queue of potential buyers, and mining legends Hannam are on the ticket should revive the stock once more.

Oriole Resources (ORR), the AIM-quoted exploration company focussed on West Africa, provided an exploration update on the lithium potential within its 90%-owned Central Licence Package project in Cameroon. The district-scale CLP project comprises nine contiguous licences covering 4,091 square kilometres of previously unexplored Paleo-Proterozoic to Pan-African age rocks that are highly prospective for a range of commodities, including orogenic-style gold mineralisation and lithium. Two of the CLP licences, Ndom and Gamboukou, are being assessed for their potential to host hard rock lithium. The company said whilst it is good to get consistent lithium results on the samples taken to date, it does need to complete further analyses and mineralogical studies to begin to understand better the initiation point for the original anomaly.  As it remains focused on the significant positive gold results seen to date across the five Eastern CLP licences, it will continue to run its lithium investigations in parallel and remain open to any investment interest at a project level from any lithium specialist exploration groups.

Comment: Interesting wording from ORR that it is remains open to investment interest. Perhaps this is an indication of the company attempting to deliver a quick turn for shareholders.