27/07/2023

Arrow Exploration (AXL), the operator with a portfolio of assets across key Colombian hydrocarbon basins, provided an update on the operational activity at the Carrizales Norte field on the Tapir Block in the Llanos Basin of Colombia where Arrow holds a 50% beneficial interest. The company said Production from the CN-2 well provides additional evidence that the CN field is a material discovery for Arrow. Further to the thick pay zones encountered in the Ubaque formation, additional pay zones currently behind pipe provide further opportunities for production and reserve increases. The company is looking forward to the CN-3 well results which will help determine the size of the pools in the field and the potential reserves additions. Multiple development locations are anticipated based on current results. Arrow plans to undertake a third-party reserve evaluation of the CN field once the current three well drilling program is complete.

Comment: AXL remains one of the few small cap companies on the London market which has hit all its key milestones, and appears set to accelerate to being a genuine mid-tier producer over the near term. The market continues to undervalue the merits of what has been achieved here.

GreenRoc Mining (GROC), a company focused on the development of critical mineral projects in Greenland, updated on its Amitsoq Graphite Project in South Greenland. The company said with the team of biologists from BioApp visiting Amitsoq in early August, it will have completed the main field sampling programme of the EIA, which is an important milestone to have reached. Similarly important is the submission of the Terms of Reference of the SIA to the Ministry of Mineral Resources in Greenland, which essentially marks the beginning of the negotiation process with the Government of Greenland towards exploitation permitting.

Comment: One could say that the sizzle in the latest RNS from GROC centres around the prospect of an off-taker entering the mix. This is over and above the all-important permitting process.

Future Metals NL (FME) is announced its Quarterly Activities and Cashflow Report for the Quarter ended 30 June 2023. The company said through the June quarter it continued to optimise the flowsheet at Panton, creating a step-change in PGM recoveries, de-risking the flowsheet and improving project economics through leaching of flotation tails, and optimising the flotation regime. Following these improvements, it can now expect to recover approximately 86% of the PGMs from Panton’s ore feed and expect to consistently achieve very high concentrate grades of >280g/t PGM3E1.

Comment: FMET has seen its shares struggle, which is at odds with update like today’s highlighting the possibility of the recovery of high grades.

Ananda Developments (ANA) announced that its wholly owned subsidiary MRX Medical Limited (MRX) has today launched its first two cannabinoid medicines MRX1 and MRX2 on to the unlicenced medicinal products (specials) market. The company said it is determined to win NHS support for its cannabinoid medicines with its rigorous approach to formulation development, clinical trials and traditional pharmaceutical data collection. It believes that MRX is in the strongest position to do exactly that.  With NHS endorsement it can bring these medicines to the millions of people who need them and deliver revenues to Ananda.

Comment: It is clear from the updates delivered so far this year that ANA is passionate about addressing the pain relief crisis, and to do this via the NHS, something which could be transformational not only in terms of effective treatment, but also as far as cost is concerned.

Oxford Cannabinoid (OCTP) announced that the first-in-human dose of its lead pharmaceutical drug compound, OCT461201, has been successfully administered, as part of its Phase I clinical trial. The company said it was so pleased and proud to be able to announce the first dose of OCT461201 being administered to a healthy volunteer. Both symbolically and commercially, this is an enormous milestone for OCTP. Whilst this is the culmination of years of hard work, it also lays down a marker for the future and signals the beginning of a bigger journey.

Comment: OCTP makes solid progress not only in terms of its journey, but in the form of a Phase I clinical trial, providing validation that cannabinoid technologies are truly part of the medical / pharmaceutical mainstream.

Deltic Energy (DELT), the AIM-quoted natural resources investing company, provided an update in relation to the five Southern North Sea gas exploration licences held jointly with Capricorn Energy PLC. The company said while it would have preferred to continue in partnership with Capricorn on these exploration licences, Capricorn has recently changed strategic direction. Its extensive work together has advanced its understanding of the potential of the area; further demonstrated the excellent prospectivity present on the two most advanced licences and allowed it to focus on those licences showing excellent potential. It looks forward to advancing the key exploration prospects on this acreage.

Comment: Ideally today’s RNS is merely a bump in the road, given the way that the news earlier this month regarding a significant increase in its estimate of oil and gas resources for the Pensacola discovery on Licence P2252 (Deltic WI: 30%) was double expectations.

Novacyt (NCYT), an international specialist in clinical diagnostics, announced its unaudited trading update for the six months ended 30 June 2023. The company said it has remained focused on delivering its strategy during the first half and have made strong progress in expanding our internal product portfolio and diversifying our business away from COVID, as demonstrated by the Group’s highly complementary proposed acquisition of Yourgene. The launch of six new multiplex tests for the RUO market has significantly broadened our IVD portfolio and gives it access to additional near term revenues. With the UKCA offering a more favourable regulatory pathway, it expects to start the self-certification process for two of these news tests during the second half of 2023 and expect them to be available for clinical use in the UK in H1 2024.

Comment: Partially thanks to its significant cash pile, and being debt free, NCYT continues to have the fire power and determination to pivot from merely being a Covid play, to enter the general arena of clinical diagnostics. This process appears to be progressing apace.

The Mission Group (TMG) reported a less than a dazzling trading update along with the appointment of a new broker. The Interim Trading Update to June showed a 12% Revenue increase to £42m, but a 13% decreased in Operation profits to £1.9m. It’s an acquisitive group of digital marketing and communications agencies employing 1000 people in 29 locations mainly in the UK, but also Asia, Germany, and US.  The diverse business pipeline is reported to be strong, and its new clients include, UK Space Agency, Goldman Sachs and Jägermeister. Its revenue growth is from progress made Lifestyle & Property, Sports & Entertainment and B2B sectors.  The fall in profits are the economic headwinds and higher interest rates.  At the  year-end to December 2023 closing net bank debt position was £11.4m  while  an increased dividend of 2.5p was paid.  At close the P/E was 6.5x with a 5.6% yield at 44p and a Mkt cap of £40m.

 

Comment: TMG have seemed perpetually undervalued and after new expectations are set the new broker should help the rerating.

 

Fulcrum Metals (FMET), a company focused on mineral exploration and development in Canada, is updated on the results of the recent airborne geophysical surveys at Big Bear, part of the Groups Schreiber-Hemlo project and Tocheri Lake properties, Ontario, Canada. The company said the results of the geophysical surveys are very encouraging and provide us with a clearer understanding of the Big Bear property. The survey has greatly increased the prospectivity of the Big Bear property not only increasing the number of priority geophysical targets by 85% to 72, but also identifying several new structures and target areas for investigation.

Comment: The market seems to be slow in appreciating that since listing earlier this year, FMET has been active in rolling out its strategy. It has been doing this on potentially significant targets, which it continues to expand in number.

4GLOBAL (4GL), a UK-based data, services and software company, announced its audited final results for the year ended 31 March 2023. Revenue increased to £5.6m (2022: £3.6m) up 53%. Consultancy services revenue £2.3m and data (ARR) revenue £3.3m, up 114%. The company said demand for its data and insight products continues to grow.  The many significant challenges faced in its sector due to the uncertain global economic outlook, will, it believes, drive its customers to seek ever more business-critical insight and this is the very strong message it is getting from its customers.

Comment: 4GLOBAL is in the category of being one of the elite in terms of being able to massively improve its revenue numbers, despite the way that we are said to be in a difficult macro-economic environment.

Bango (BGO), the global platform for data-driven commerce, announced a trading update for the 6 months ended 30 June 2023, ahead of announcing Interim Results in September. Bango generated strong growth during the first half of FY23 with revenue up 88% to $20.3M (1H22 $10.8M), in line with management expectations. The company it had made great progress in the first half of the year with 88% revenue growth, demonstrating the momentum in the business. Traction of the Digital Vending Machine is clear, particularly in the US market, with a further 2 key US wins. Fast DVM growth means recurring, multi-year SaaS revenue is becoming an increasing proportion of the Bango revenue mix. The high-profile launch of Verizon +Play in March sets a clear standard for super bundling globally and it is excited by the deals it has in the pipeline.

Comment: In Bango we have one of the few winners in the present environment, something which is perhaps more pleasing given the way it is in the tech space. The progress in the US market is icing on the cake.

Gaming Realms (GMR), the developer and licensor of mobile-focused gaming content, announces a pre-close trading update for the half year to 30 June 2023. The company confirmed that it expects to report H1’23 revenue of c.£11.4 million and adjusted EBITDA* of c.£4.6 million, up 34% and 32% respectively, year-on-year. This strong performance was driven by the continued growth of the group’s licensing business, which consolidated its market share by going live with 25 new partners and launching 5 new Slingo games.

Comment: GMR has been a winner in its field for several years, and it would appear that it is consolidating this performance though adding partners to its roster.

Mila Resources (MILA), the post-discovery gold exploration accelerator announced that, together with the other owners of the Kathleen Valley licence, it has entered into an option agreement with LBM (Aust) Pty Limited, a subsidiary of Liontown Resources Limited (ASX: LTR), granting Liontown the option to explore for lithium on the Kathleen Valley Licence Area in Western Australia. The company said this is a highly exciting development which adds a new and potentially valuable dimension to the Kathleen Valley Project. Through this agreement with Liontown, it will see lithium exploration underway at this area of the Licence, which has been untested to date, and opened-up for exploration whilst being insulated from costs.

Comment: With this latest option agreement it can be seen that Mila is stepping up to the plate as far as extracting the value of its flagship Kathleen Valley license. One would expect this to help in terms of the market cap of the company after the slings and arrows of the past.