25/07/2023

Hummingbird (HUM) provided a Group operational and trading update for the second quarter of 2023, ending June 30 2023. Following a strong H1-2023, Yanfolila is well positioned to meet its FY-2023 production guidance of 80,000 – 90,000 oz at an AISC of under US$1,500 per oz. Updated Group FY-2023 production outlook to be given in the Q3-2023 operating and trading update once Kouroussa is closer to steady state production. The company said this quarter has rounded off a six-month period that has seen a strong performance as demonstrated by the more than 51 Koz of gold produced at an H1-2023 AISC profile of US$1,170 per oz and Group adjusted EBITDA of c.$33 million.

Comment: Hummingbird has certainly achieved its production inflection point in H1 2023, and one would expect the share price to respond in kind in an accelerating fashion for the rest of the year. So far the market has rather looked the gift horse in the mouth, but a return to the May 20p peak short term seems logical.

Yü Group (YU.), the independent supplier of gas, electricity, meter asset owner and installer of smart meters to the UK corporate sector, provided an update on trading for the six months ended 30 June 2023. The company said it was delighted to have accelerated its strong trading momentum and its growth continues to surpass expectations. It continues to deliver strong financial performance as more customers lock in the benefit of a softening commodity market. Alongside this growth and underpinned by our “Digital by Default” platform and Smart Meter installation business we see revenue and profitability growth in FY 23 and beyond. It is as excited as ever about the future of Yü Group and remain focussed on exceeding our previously stated £500m revenue target and increased 5% EBITDA margin.

Comment: Yu, with or without the umlaut, seems set to break into new higher ground in the wake of the latest update, without or without the controversy over smart meters. While it may or may not affect climate change, making the picks and shovels for the green hysteria revolution, seems to be a winning formula.

hVIVO (HVO), a company involved in testing infectious and respiratory disease products using human challenge clinical trials, announces a £13.1m contract with an existing top five global pharmaceutical client to develop an Influenza B human challenge model. The company said this is the second bespoke human challenge model development contract announced in as many months and continues the trend of large contract wins for hVIVO. This existing top five global pharmaceutical client will support the development of a new influenza B challenge model to potentially test its vaccine candidate, and provides further visibility of revenue into 2024.

Comment: Another winning contract RNS from HVO, a company which whose consistency in its field appears outstanding, and by implication should be rewarded by the market far more generously than the present £100m market cap.

Northcoders (CODE), the independent provider of training programmes for software coding, announced that the Group has been successful in securing further funding from the Department for Education Skills Bootcamps Wave 4 bid. In addition, the Group provides a trading update for the six months to 30 June 2023. The company said during the period Northcoders won a number of contracts with large corporates as well as securing further funding from the Department for Education, providing the Group with good forward visibility of revenues. The company is financially strong and we are well placed to further invest in the business for growth.

Comment: While HM Government claims poverty in many areas, at least it is providing backing for CODE’s offering, something which rather underpins the backbone of the company’s growth strategy. All of this is rather at odds with the near one third drop in the share price over the past few months.

Altitude (ALT) reported record accounts for the year end to March 2023. Its Revenue increased 57.2% to £18.8m with an 84% jump in Operating Profit to £2m. The business development efforts are driving significant growth in the cash cow, Merchanting divisions. ALT is a soup to nuts service solutions provider to branded merchandisers for promotional products and e-commerce which is a large global market. Its Services revenue grew 35%, of which 90.6% falls through to gross margin. The strategic focus is on the expansion of its Services providing SMEs, technology, and marketing tools, connecting them to ‘vetted’ suppliers. There are 524 distributors adopting the AIM Tech Suite for search and order creation and the platform is geared for scalability. There is no debt and undrawn banking facilities while the EPS of 0.55p makes a demanding P/E of 55x at 40p.

Comments:  The share price may already reflect a doubling of Profits for March 2024, although the growth and business is attractive.

Upland Resources Limited (UPL) announce that a director and senior management of the Company and its joint venture partner in Sarawak Big Oil Ventures have on 24 July 2023 bought a total of 13,333,333 shares in the company at a price of 0.6p.

Comment: If there ever was a fundamental green flag buy signal for a company, the latest from UPL fits the bill completely. In current stock market conditions, management leading from the front as far as share buying is just the ticket.

Bradda Head Lithium (BHL), the North America-focused lithium development group, is pleased to announce the assay results from the next five drill holes of the Basin East Extension 2023 drill programme. The company said it will soon be kicking off its Phase 3 drill programme at its 23km2 San Domingo pegmatite district in Arizona, with the main aim to delineate a Resource and also to build on the promising results of the maiden drill programme which finished earlier this year.

Comment: One would expect that lithium plays like BHL will start to revive themselves in H2 2023, as the market reminds itself of the urgency of supply for this space. This is especially the case with BHL as it is local to the key USA market. The latest news underlines that the company is continuing apace with its activities on the ground, something which should feed through to the present oversold share price.

Greatland Gold (GGP) provided an exploration and Havieron development update. The company said We are pleased with the continued underground progress at the Havieron underground with development advancing to 2,510 metres. The company said that during the quarter, Greatland progressed an exploration drilling campaign at Scallywag and rapidly mobilised to drill targets at our new Paterson South Project which is a farm-in and joint venture arrangement with Rio Tinto Exploration.  It awaits the results from these drill programmes and looks forward to updating the market in due course as it continues to make good progress across its portfolio of assets.

Comment: Shares of GGP have remained in a holding pattern at the lower levels for the best part of the year. The hope here is that the stalemate will end when we receive the results from the current set of drill programmes.

Fulcrum Metals (FMET), a company focused on mineral exploration and development in Canada, provided an update on its exploration activities at the Winston Lake project, Ontario. The company said the Carib Creek East claim block is set within a highly prospective region and in close proximity to the historic Winston Lake base/precious metal deposit which is reportedly the highest-grade Zinc mine in North America. Commencing exploration at Carib Creek East is another marker in what is to be an extremely busy year for Fulcrum as it begins to advance the portfolio of projects for commercialisation and discovery.

Comment: Given how busy FMET has been since coming to market, and the potential of Carib Creek, one would expect investors to take advantage of dipping into the shares at a discount to the 17.5p IPO price. This is especially so given how much progress has been made since February.

Aeorema Communications (AEO), a strategic communications group, announced an update on trading for the year ended 30 June 2023 following a strong second half of the year. The company said it was thrilled to announce that, for the second consecutive year, it expects to achieve record revenue and profit for our financial year ended 30 June 2023. The material increase in group revenue has been achieved by securing contracts from both new and existing clients.

Comment: AEO highlights itself as an unsung, profitable, small cap play, which is very much under the radar. One would expect the company to see its profile raised as its fundamentals continue to improve.

Active Energy (AEG), the international biomass based renewable energy business, announced it has been awarded a further patent from the US Patent and Trademark Office with respect to the Company’s proprietary technology for process for beneficiating and cleaning biomass (US Patent No. 11,702,607). The company said the award of this patent builds upon the original patent and increases Active Energy’s ability to control the resulting fixed carbon content of the finished product.

Comment: Shares of AEG have already delivered a decent jump since the spring, and one would expect this to be repeated over the rest of the summer off the back of the fundamental progress just announced in the States.

TruSpine Technologies (TSP), the medical device company, confirmed that the FDA 510k submission for Cervi-LOK has been made to the FDA. The FDA’s decision to provide clearance normally takes up to 90 days, following which the Company will be able to commence marketing and sales of Cervi-LOK in the US, if clearance is received from the FDA. The company said that ollowing a challenging period for the Company, it was delighted to report further significant progress. The FDA submission for Cervi-LOK represents a major milestone for TruSpine, and, if clearance is received the prospect of sales revenue generation will be potentially transformational for the company.

Comment: A thumbs up in the making from the FDA is something which even the worst bear market cannot throw cold water on. One would expect TSP shares to outperform in the run up to this potential milestone.

Yesterday Bezant (BZT) provided information on encouraging results of Phase 1 metallurgical testing carried out by Wardell Armstrong International on a sample from its’ 100% owned Kanye manganese exploration project in Botswana. The primary objective of the work was to investigate the amenability of extracting manganese from the Kanye mineralisation by sulphuric acid leaching. The company said that the first phase of metallurgical testing is highly encouraging in that we have demonstrated our ability to recover a high level of manganese. The next phase will move towards commercial optimisation of the leaching parameters, with specific emphasis on limiting sulphuric acid consumption. It is aiming for battery grade manganese production which is much sought after and we look forward to moving towards resource definition and a preliminary economic assessment.

Comment: If there is a positive aspect to the current lowly stock price at BZT it is the way that the market has factored little of the operational progress the company is making, and none of the potential this could lead to.