01/09/2023

Totally’s (TLY) AGM is being held today in Derby. It will pass special resolutions to issue shares, allow the purchase and cancellation of shares in its Treasury and disapply shareholder pre-emption rights.  At 10.65p, the shares are at a 52-week low. TLY, have grown organically and by acquisition into being provider of frontline healthcare services with a critical mission to reduce waiting lists for NHS patients. The Finals to March 2023 showed the difficulty of its business proposition.  As despite Turnover of £135.7m profits were just £1.8m with cash down 56% to £6.4m and working capital is tightly managed. There are tight service and cost parameters with gross margins of just 18.4% and are under intense inflationary staffing pressures. It’s in early stages of developing much higher margin corporate fitness and wellbeing services with revenue at just £1.7m but 41.5% gross margins.  The EPS of 0.59p gives a P/E of 18x, supported by a nearly unaffordable 0.625p Dividend for a yield 5.4%. Stonehage Fleming Investment the Management the largest shareholder increased its holding to 12.24%.

Comment:   The NHS are most likely to allow contracts to be renegotiated and the company could start buying back shares. There could also be predatory interest at this bottom price.

San Leon (SLE), the independent oil and gas production, development and exploration company focused on Nigeria, announced a further extension to the longstop dates for the proposed transactions with Midwestern Oil & Gas Company Limited and the Company’s further conditional investments in Energy Link Infrastructure (Malta) Limited. SLE said it remains in discussions with ELI regarding making further potential investments of up to $37.0 million, in ELI, which would be conditional, inter alia, on San Leon completing the alternative loan facility of $50.0 million referred to above.

Comment: It is evident that the situation here still leaves everything to play for, even though shareholders are presumably feeling a little frustrated at their SLE experience currently.

All Active Asset Capital announced that it has raised over £1,500,000 through the issue of new shares. At the Board’s absolute discretion, AAA will continue to accept subscriptions for new shares at the same issue price of 1p per share until total subscriptions reach £2,000,000. Of the funds raised, €1,500,000 will be invested in the placing that Sentiance N.V. is due to complete later this month. Sentiance said the new investment from AAA and other existing Sentiance shareholders will enable Sentiance to accelerate its growth plans and sales pipeline. AAA and Sentiance continue to work closely together to turn Sentiance’s ambitious plans into reality.

Comment: Whether the new AAA is regarded as a reboot, or a phoenix from the ashes, it will be interesting to see whether now that we all have AI mania, the time has come for its investment in Sentiance.

Shuka Minerals (SKA) announced that it has changed its name from Edenville Energy Plc. The Company confirms that the name change will take effect at 8.00 a.m. (BST) today. The new name will be reflected by the London Stock Exchange and the Company’s London Stock Exchange market ticker will change to ‘SKA’. The Company’s ISIN (GB00BN47NP32) and SEDOL (BN47NP3) will remain unchanged. SKA said it was delighted to officially announce the successful transition from Edenville Energy Plc to Shuka Minerals Plc. The new name reflects its dedication to cultural respect and inclusivity, as well as its strong commitment to the local communities it operates in.

Comment: After what has felt like rather a long wait, we finally have the name change the public have been demanding. The question is whether it is whether we are changing from David Bowie to Ziggy Stardust, or vice versa?

SEED Innovations (SEED) the AIM-quoted company investment company, providing shareholders with exposure to early-stage health, wellness and medical cannabis companies to which, in normal circumstances, they have limited access to, is pleased to announce that it has strengthened its board with the appointment of Mr. Alfredo Pascual as Executive Director, effective 1 September 2023. SEED said it was thrilled to extend a warm welcome to Alfredo to its Board. Beyond his cannabis industry expertise, Alfredo’s analysis has proven extremely valuable in the implementation of its investment strategy. Alfredo is currently a Level III candidate in the CFA Program, adding an extra layer of value to the board and shareholders alike as it remains committed to its investment policy of disruptive growth opportunities.

Comment: Shares of SEED have finally started to turn around in recent weeks, finding good support above 2p, and chart wise looking to head to 3p over coming weeks. The arrive of Mr Pascual, apparently is something of a high flyer (Level III, CFA), could help this recovery along.

Trident Royalties (TRR), the diversified mining royalty company, noted the recent announcement by Ganfeng Lithium Co, Ltd regarding the Sonora Lithium Project, in Mexico. Trident said it was  disappointed by the recent developments in Mexico announced by Ganfeng, which add risk to the transaction in addition to the ongoing litigation in Alberta, whereby the validity of the royalty is being challenged. It was cognizant of these risks at the time of the original transaction and structured the deal accordingly to protect against both political and litigation risk, such that it may recover its initial $2.5 million secured loan. It will continue to monitor the situation carefully and, at the present time, intend to maintain its rights in respect of the asset.

Comment: Today’s news from TRR reminds us of the slings and arrows of the mining royalty business model, and also that it is perhaps lucky that companies from jurisdictions and operating in jurisdictions where the rule of law can be something of a moveable feast, do not have the goalposts moved against them more often.

Verditek (VDTK), the international green technology company, announced that it has raised £500,000 at 0.45 pence. The proceeds of the raise will be used for general working capital. The Issue Price represents a discount of 40.0 per cent to the closing mid-market price of 0.75 pence of Verditek shares yesterday.

Comment: One of the few benefits of being in a heavy bear market for small cap stocks is the prevalence of deeply discounted fund raises. This is what we have been treated to at VDTK. It is perhaps a relief that the company has said that the proceeds are merely for general working capital purposes.

Ironveld (IRON), the AIM quoted mining development company, confirmed that it has agreed with a subsidiary of JSE-listed Sable Exploration and Mining Limited certain amendments to the funding and operational structure of the DMS Magnetite operation currently being established at Ironveld’s mining area. The new structure retains Ironveld’s ability to supply ore into the JV and benefit from a share of positive cashflows without having to fund the initial capital expenditure. IRON said it welcomes SEAM as a funding partner for the DMS Magnetite Joint Venture. The DMS Magnetite project is beneficial for Ironveld Mining in terms of reducing overall average mining costs and should in time contribute positive cashflow, without it having to divert funding from its core smelting activities in order to establish the venture.

Comment: Shares of IRON have been trading sideways for a considerable time, seemingly requiring a decent newsflow kicker. Today’s news may be at least a near term boost to the stock.

Kibo Energy (KIBO), the renewable energy-focused development company, announced that its subsidiary Mast Energy Developments (MAST), has further extended the completion long-stop date for the company’s first definitive and binding JVA. This follows MED’s previous announcements dated 12 July 2023 and 4 August 2023, respectively. KIBO said the extension will allow the JV investor consortium to complete the compulsory statutory process for the international transfer of funds associated with any investment that qualifies as an outward direct investment. Funds will be promptly transferred into the UK to complete the JVA upon completion of the statutory process.

Comment: I have been asked what the prospects for Kibo / Mast are, given the rather flat share price performance in recent months. The answer is perhaps that while no one could describe these companies as being the Glimmer Twins, there does seem to be a steely determination to get the JVA over the line.