STOCK MARKET NEWS – RNS HOTLIST
RNS Hotlist May 30: Angus, Arrow, BSF, Celadon, CleanTech, Drumz, Empire Metals, Firering, Kistos, Prospex, Reabold, Thor Explorations
Drumz (DRUM) announced that its subsidiary, Acuity Risk Management Ltd, has signed a new partnership with award-winning cyber security service provider Nettitude. Nettitude will be joining Acuity’s network of partners as a reseller of STREAM Integrated Risk Manager – Acuity’s GRC platform highly rated 4.8/5 and 4.5/5 stars on Gartner Peer Insights and G2 respectively. Acuity said with mounting regulatory pressure across the world, the combined expertise of Nettitude and Acuity offers a great opportunity for organisations to adopt an Integrated Risk Management strategy, providing the necessary clarity to navigate complex risk landscapes. Nettitude and Acuity are committed to delivering innovative solutions to help global organisations mitigate risks and achieve their cybersecurity objectives.
Comment: Once the penny drops as far as the potential that Acuity has, one would expect as significant re-rate for Drumz. In the meantime, we see the company adding to recent significant newsflow, underlining the opportunity of the addressable market in the Risk Management area for corporates.
Greatland Gold (GGP) announced that it has entered into a farm-in and joint venture arrangement with global mining group Rio Tinto, to accelerate exploration across 1,884km² of highly prospective tenure within the Paterson Province of Western Australia located near the company’s Havieron gold-copper project. GGP said the Paterson South Project tenement package is an outstanding opportunity with a number of high priority, highly prospective and heritage cleared drill targets. It expects that some of these targets can be incorporated in our 2023 drilling campaign. These targets include underexplored anomalies which the Company considers to be the closest to a Havieron lookalike within the Paterson Province.
Comment: The market has certainly not given GGP the benefit of the doubt in terms of newsflow, despite very constructive noises. It will be interesting to see whether with Rio Tinto in the mix today, ahead of the 2023 drilling campaign, the dial can finally be moved in terms of the share price.
Oracle Power (ORCP), shared updates post the signing of an MOU with China Electric Power and Technology Co., Ltd, a subsidiary of State Grid Corporation of China, for development of its 400 MW Green Hydrogen Project in Pakistan via its subsidiary Oracle Energy, a joint venture with HH Sheikh Ahmed Dalmook Al Maktoum. ORCP said a joint Steering Committee for the development of the Project has been nominated in accordance with the MOU, and meetings have already commenced. It said it has also taken another major step forward in relation to the completion of the bankable feasibility studies for the 1.2 GW hybrid power, grid interconnection and storage architecture for the Project.
Comment: It is clear that so far the market has not cottoned onto ORCP’s place within a giant hydrogen project, or how much momentum is gathering in terms of what will be a 1.2GW hybrid power deal.
Kistos (KIST), the low carbon intensity gas producer, provided a summary of its audited full-year results for the year ended 31 December 2022. The company said its accelerated evolution over the course of 2022 has been driven by targeted value-accretive acquisitions which have provided both immediate and longer-term upside for the Group. The company said that its entry into the UKCS, followed this year by Norway, has created a diversified and flexible portfolio across multiple jurisdictions. The Group benefited from strong commodity prices resulting in significant cash generation, which will allow it to continue to capitalise on the exploration, appraisal, and development opportunities within its portfolio.
Comment: Kistos shares are all the way back at levels last seen in the summer of 2021, something which seems rather out of sync with the current realities of post Ukraine war energy security fears, and Russia’s supply blackmail. The key here is in the company’s own words, regarding a diversified and flexible portfolio across multiple jurisdictions.
CleanTech Lithium (CTL), an exploration and development company advancing next-generation sustainable lithium projects in Chile, shared results from important hydrogeological work with pump test programmes undertaken at Laguna Verde and Francisco Basin. This is followed by a brine reinjection test to commence at Laguna Verde, a first for the lithium sector in Chile. The company said it was delighted at the progress it is making on its extensive work programmes across its three different basins. The pump test results at Laguna Verde and especially at Francisco Basin surpassed expectations and with the commencement of the first-ever reinjection test in Chile just round the corner, this could be a game-changing moment for Chile´s lithium sector.
Comment: CTL continues to update on the operational side, which as the company says, could be a “game changing moment” for Chile’s lithium sector. It would perhaps be even more of a game-change for shareholders, and see the stock return to the best levels near 90p, if the company underlined the way that its “clean tech” is precisely the right antidote to fears over Chile’s nationalisation fears, and should mean it is a winner in the country going forward.
BSF (BSFA), the Main Market listed biotech company and the owner of pioneering UK-based clinical and cellular agriculture company 3D Bio-Tissues, announced that it has successfully produced a further two full-scale fillets of cultivated pork, as well as a cultivated pork strip, which were presented at a technical event on Friday 25 May 2023. The company said it has gained a huge amount of valuable knowledge from testing its products with a trained chef and was reassured to observe that its cultivated meat is able to be handled and cooked in the same way as traditional meat products.
Comment: We have a good place holder announcement from BSF, with the “trained chef” a cute addition. We also find out why the shares had a decent bump to the upside at the end of last week.
Prospex Energy (PXEN), the AIM quoted investment company focused on European gas and power projects, announced that on behalf of the Joint Venture, Po Valley Energy Limited has recovered the €757,000 performance bond funds deposited with SNAM, the Italian national Transmission System Operator. PXEN said that team at Po Valley continues to deliver on behalf of the Joint Venture. The anticipated flow of gas from Selva by the end of May has been delayed on account of the emergency situation in the Emilia Romagna region of the Po Valley. Fortunately, the new plant and the well site has not been affected by the flooding.
Comment: It should be the case that as soon as the fallout from flooding in Italy subsides, PXEN should be on its way again. The latest recovery of the performance bonds is a decent boost to tide the company over in the interim.
Arrow Exploration (AXL), the operator with a portfolio of assets across key Colombian hydrocarbon basins, provided an update on the Carrizales Norte-1 well and Q1 2023 interim results. The company said its expectation is that the Carrizales Norte wells will be quick to payout in the current oil price environment with triple digit IRRs, providing positive cashflow. AXL Recorded $6.9 million of total oil and natural gas revenue, net of royalties, more than double compared to 2022 (Q1 2022: $3.4 million). Adjusted EBITDA of $4.3 million, more than seven times compared to 2022 (Q1 2022: $0.6 million). The company’s cash position was of $12.3 million at the end of Q1 2023.
Comment: Despite all the official updates from AXL, it is still evident that the market is still relatively unaware of how well the company is doing, and perhaps more importantly, the strength of the opportunity that remains. That cash position level continues to improve at pace.
Celadon Pharmaceuticals (CEL), a UK-based pharmaceutical company focused on cannabis-based medicines, announced that it has entered into a £7 million, two year committed credit facility with a UK-based high net worth investor. The company said it was delighted to have secured the £7 million credit facility to support the growth in our operations to meet the increasing demand for Celadon’s product. The company continues to confidently pursue the conversion of expressions of interest for Celadon’s product into formal sale contracts, and build out the underlying operations required to deliver them.
Comment: It seems that with the £7m credit facility, CEL has the last piece of the fundamental jigsaw to roll out its business model, something we were alerted with the latest £3m contract announcement. It is likely that the company will surprise to the upside, even with current strong expectations.
Powerhouse Energy Group (PHE), a company pioneering integrated technology that converts non-recyclable waste into low carbon energy, announced that it has entered into an agreement with Noage Energy Ltd to act as a representative of PHE in Northern Ireland. PHE said Noage has already demonstrated itself to be a proactive partner in bringing a project opportunity in Ballymena to PHE and identifying the various elements required to bring it to fruition.
Comment: Shareholders of PHE should be cheered by this latest “out of the blue” development for the company, something which suggests that after the slow pace of the Peel years, we are to see an acceleration in newsflow on the journey to the first plant being built.
Empire Metals (EEE), the AIM-quoted resource exploration and development company, announced that results from the company’s maiden RC drill programme at the Pitfield Project, located in Western Australia, have confirmed the presence of a giant-scale hydrothermal mineral system enriched in titanium and copper. EEE said it was absolutely thrilled with the results of its maiden drilling campaign. The discovery of titanium rich minerals tells it has a “Land of Giants” to explore.
Comment: While the norm as far as exploration companies tends to be where there is disappointment just waiting to happen, in the case of EEE we arguably have been treated to perhaps the best surprise news that could have materialised. Even in current cynical markets, it is likely that the share price is likely to soar as far as Pitfield is concerned.
Firering Strategic Minerals (FRG), an exploration company focusing on critical minerals, announced the successful completion of its large-scale Phase II Soil Sampling Programme at its flagship Atex Lithium-Tantalum Project, in Côte d’Ivoire. FRG said it was very pleased to announce that, after partnering with Ricca, it has now successfully completed our Phase II soil sampling programme, which commenced on 09 January 2023. A total of 14,116 soil samples were taken, prepared and sent to Ghana for pXRF and LIBS analysis. It is very encouraging that several pegmatite related anomalies have been identified, which will be considered as targets in the next phase of auger drilling which will commence shortly.
Comment: Today’s RNS should be the starting gun as far as a new bullish phase at FRG, not only in terms of the soil samples, but as traders looking forward to the next phase of drilling.
Reabold (RBD), the oil & gas investing company with a diversified portfolio of exploration, appraisal and development projects, announced its audited financial results for the year ended 31 December 2022. The company said it has had an active year and have evolved the portfolio significantly: the sale of Corallian to Shell, exchanging Reabold California for a 42% stake in Daybreak, acquiring new licences in the North Sea, and in 2023, the acquisition of Simwell, whilst increasing its cash balance to £5.5 million. Post period highlights included the acquisition of Simwell Resources Limited for £1 million which includes interests in four Southern North Sea licences east of onshore West Newton, CPR was released on four of Reabold’s North Sea licences including P2478, which includes the West Dunrobin prospect confirming significant resource potential. Rathlin was to potentially bring in an industry partner to support licence activity, with West Newton B-2 drilling targeted for Q4 2023, subject to final regulatory approvals and rig availability. There was a potentially highly significant discovery in Crawberry Hill, part of the PEDL 183 licence. There was also the acquisition of a 3.1% interest in LNEnergy for cash consideration of £250,000, and the start of a share buyback in April 2023.
Comment: We have a full and comprehensive update from RBD, something which the market should find highlights how well diversified the company is going forward in terms of future opportunities, and how well it has done in terms of monetization over the recent past. The latter point is of course, underlined by the ongoing share buyback, highlighting the value in the stock at current ultra low levels.
Thor Explorations (THX) provided an operational and financial review for its Segilola Gold mine, located in Nigeria, and for the company’s mineral exploration properties located in Nigeria and Senegal for the three months to March 31, 2023. The company said its performance during the period demonstrates the amount of progress it has made at Segilola. The main operating units continue to perform better than expected and operate above capacity, so its production at the mine totaled 20,629 ounces. Costs were at the higher end of our guidance, however it expects costs to reduce materially in the second half of the year as it complete it mining in the current difficult areas. It has also had its first significant exploration success outside the Segilola Mine footprint, identifying a new high grade quartz vein system within 15 kilometres of mine.
Comment: One would expect the market to wake up soon to progress made at THX, a better than expected performance and production, and the prospect of expanded resource outside the Segilola Mine footprint.
Angus Energy (ANGS) announced that production at the Saltfleetby Field has reached a steady operating state from the 3 producing wells in the field, B2, A4 and the new B7T. The company said it was pleased to have reached this production milestone and to be able to turn attention to both organic and inorganic growth opportunities. Saltfleetby has the potential to meet the twin demands of present and future administrations for clean energy and energy security, as well as offering the possibility of enhanced gas recoveries in the medium term.
Comment: Shares of ANGS needed the kind of announcement from the company today to re-awaken the bulls, and underline the value and potential that exists at Saltfleetby, especially at a time of energy security fears.
Disclaimer & Declaration of Interest:
The information, investment views, and recommendations in this Zaks Traders Cafe interview are provided for general information purposes only. Nothing in this interview should be construed as a promotion or solicitation to buy or sell any financial product relating to any companies under discussion or referred to or to engage in or refrain from doing so or engage in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the commentator but no responsibility is accepted for actions based on such opinions or comments. The commentators may or may not hold investments in the companies under discussion.