While the past week has clearly had a dog days of summer feel, the lay of the land in terms of newsflow and stock price movements in the small cap space was arguably as busy as it could be. We had the transformational Neo Energy Metals (NEO) acquisition, environmental authorisation for Uru Metals (URU), a sharp rebound after the initial plunge at Shuka (SKA) on its funding position, interim profits doubling at Thor Explorations (THX) and Argent Biopharma (RGT) on collaboration news. While such swallows do not make a summer for small caps, these are the type of wins that investors in the space need. It is not enough just to hope that say, the rising tide of falling interest rates will lead to a general recovery in share prices.
Goldstone
Apart from the situations mentioned above, there were other highlights worth noting as the small cap space had something of a feel good factor. Indeed, there has been something of the mood of the pandemic, when investors flocked to the stock market as the “real world” seemed to be in a bad place. Of course, we do have the prospect of autumn tax rises and other painful unelected moves by the new government, all of which might be enough to convince people that they might as well take a punt on the market, especially via spread bets. This has meant that some of the placings that companies have been trying to get away have had rather keener interest than in recent months. A notable situation was Goldstone Resources (GRL), who raised £600,000. The company said the subscription provided a substantial proportion of the equity funding of c.GBP1.8 million targeted in April 2024. Part of the cash will be used to develop its Homase mine in Ghana.
Mkango
Another fundraising situation which was well received came from Mkango Resources (MKA), a company that is one of the more followed situations among the minnows. The news here was that MKA had raised £1.25m from existing shareholders, something which will be used to advance its portfolio of rare earth assets. The shares were up 22% on the week, and it is usually a green flag when a stock rises after having raised money in such a way. The shares have recently bounced off their lows, and it could be that we are due further recovery now that the cash is in.
Roadside Retail
A company rising on no news, but presumably an appreciation of its prospects was Roadside Retail (ROAD), boasting a 38% rise on the week, and up over 200% year to date. At the end of June the company said that having refinanced the business it was now actively pursuing the assembly of its institutional quality roadside real estate portfolio, with c.£100 million imminent pipeline via the JV with Meadow Partners.
i3 Energy
Of course, if we are heading for better times we would like to see more M&A. Thia was delivered by i3 Energy (I3E) as it announced a confirmed recommended offer at just under 14p. Given that the shares have traded much higher over the past couple of years it may be that some found offer from Gran Tierra as being disappointing in terms of the valuation. But it should be remembered that this is a £150m market cap company, and that the deal making that i3 made going into the time of the pandemic and beyond was very impressive. Perhaps it could be said that the management needed such a deal at this stage to take the business to the next level, especially in terms of scaling. If we were in a bull market one might be dreaming of a higher counter offer, but this is 2024, not 1994.
Weekend Markets
One of the things that I have been doing on Fridays with Steve Deacon of Biztech Markets is Weekend Markets. The format is partly two middle aged men trying to deliver banter that will not get them cancelled, but it is also attempting to deliver the kind of dispassionate analysis of stocks and markets that people might find useful. Just as important is the aim not to be boring, or deliver the kind generic plugging of companies one sees on most platforms. Perhaps the rally on Friday for Weekend Markets perennial Premier African Minerals (PREM) was the result of being mentioned on the show, or maybe it was a coincidence? Either way, it was the most fun one can have with regard to the stock market, apart from making money. It was pleasing to note that after the best part of a year of plugging away at Weekend Markets, the views of the show were the best we have had to date. Not quite Joe Rogan yet, but one never knows.
Pulsar Helium
One of the rules of politics is that it is not normally a good idea to give the people what they want. Indeed, quite the oppositive. This rule could very well be applied to the mega RNS from TSX-V listed Pulsar Helium (PLSR). In a news release which contained everything but the kitchen sink, the company revealed a report on the amount of helium found to date, a fundraise and a move to IPO on AIM. On the face of it we were treated to a triple dose of good news, with the AIM angle particularly helpful as many of PLSR’s shareholders are from the UK, as is the management. Presumably, after the dust settles and the news is digested shares of PLSR will start to head back towards the dizzy heights of C$1.70, as opposed to 50 cents now, versus last year’s 30 cents Canadian IPO.
Author
