Golden Metal Resources (GMET), a mineral exploration company announced the signing of a LOI with United States-based Global Tungsten & Powders LLC of Towanda, Pennsylvania, in respect of a tungsten concentrate off-take agreement for Golden Metal’s wholly-owned Pilot Mountain Project located within the prolific Walker Lake Mineral Belt in Nevada, USA.
The non-binding LOI provides outline terms for a future off-take agreement, subject to successful technical and legal due diligence, and also to Golden Metal securing necessary funding to develop Pilot Mountain.
Comment: GMET continues to be a company in a hurry so soon after listing, with significant new news. In this case we know that the more off-take agreements the company gets, the easier it will be to secure the funding for Pilot Mountain.
URA Holdings (URAH), the Main Market listed exploration company, announce an operational update for its 74% owned Gravelotte Emerald Mine. The company said that following the establishment of the first ever JORC resource for the historic Gravelotte Emerald mine it is now focussing its activities on preparing for the recommencement of mining and processing operations. Although it is fortunate to already have significant historic mine infrastructure in place the infrastructure still needs to be repaired and upgraded as part of the restarting of mining and processing operations.
Comment: The countdown the restart of mining is clearly on its way, something which will obviously be transformational for URA. Interestingly, the market does not seem to have factored imminent and significant production into the share price yet.
hVIVO (HVO), (formerly Open Orphan plc) a specialist contract research organisation, said it has signed an agreement with a North American biopharmaceutical company to manufacture a hMPV virus and conduct a characterisation study, with the intent to conduct a subsequent hMPV challenge trial in 2024 to test the efficacy of its vaccine candidate. HVO said it was delighted to be developing the industry’s first commercial hMPV human challenge model. The continued expansion of its challenge model portfolio aligns with its mission to deliver today’s healthcare by empowering tomorrow’s innovation.
Comment: hVIVO continues to drive its business in new and innovative ways, something which is and has not been reflected in the stock market’s valuation of the company, yet.
Pires Investments (PIRI), the investment company, announced its audited results for the year ended 31 December 2022. The company said that whilst 2022 has been a difficult year, it believes that it has managed to safely navigate its way through the period relatively unscathed. It has also achieved some excellent results such as the valuation uplifts from Getvisibility and Smarttech247. It remains encouraged by the progress made to date by its investments and the outlook for the respective sectors in which they operate.
Comment: PIRI is a good example of how low the market values companies at the moment, at fractions of NAV, and / or cash. However, the company has had decent wins, and in current bear conditions liquidity events are the name of the game.
Bluejay Mining (JAY), the exploration and development company, announced that it has raised gross proceeds of £1.3 million at a price of 1.75p. The funds raised will be focussed on the Company’s 100% owned Hammaslahti copper-zinc-silver-gold project in eastern Finland where the company completed Phase 1 of a diamond drilling programme last week. The company said the historical Hammaslahti mine was previously operated between 1971 and 1986 and produced a total of seven million tonnes of high-grade Cu-Zn-Ag-Au ore. This historical production, combined with its previous exploration activities, gives its confidence that Hammaslahti presents the potential to maximise shareholder value in a short timeframe.
Comment: Shares of JAY have been on the back foot for the longest time, something which is only likely to be interrupted by proving up assets, and of course, production. Ideally, today’s raise will accelerate matters.
Woodbois (WBI), the Africa-focused forestry, timber trading and afforestation company announced that it has raised £6 million by way of a subscription for new ordinary shares at a price of 0.5p. This satisfies the cash shortfall created when the $6m working capital facility was withdrawn by Sydbank in April 2023, allowing the company the flexibility to discharge its remaining obligations to Sydbank in full, and to benefit from the incentives for early repayment. The company said following the unexpected termination of its working capital facility in April, it is delighted to emerge from this challenging period with a vastly improved balance sheet.
Comment: Barring any future bolts from the blue it should be the case that investors in WBI can draw a line under the rather painful events of 2023 to date. That said, given what a rocky ride it has been, it may take a while for sentiment to return here in a positive way.
Dekel Agri-Vision (DKL), the West African agribusiness company focused on building a portfolio of sustainable and diversified projects, announced its audited results for the year ended 31 December 2022. The company said achieving a strong EBITDA of €4.6m from the Palm Oil Operation despite operating in the lowest high season production period it has experienced was a credible outcome. With CPO prices remaining higher than historical averages and a much stronger H1 2023 high season, the Palm Oil Operation is well positioned to deliver a strong H1 2023 financial performance.
Comment: DKL shares have already been in recovery mode for much of 2023, something which is more than justified given the latest result from the group. High CPO prices look as though they are here to stay in terms of underpinning DKL.
Predator Oil & Gas (PRD) said it does not have sufficient headroom to enable issue and admission of new ordinary shares without the production of an FCA approved prospectus. Accordingly, Novum Securities have received firm orders to buy 18,000,000 existing ordinary shares at a price of 10.5 pence each. Paul Griffiths and Lonny Baumgardner will sell 17,500,000 and 500,000 ordinary shares respectively at a price of 10.5p each to raise £1,890,000 (before expenses). The company said the additional funding allows for MOU-4 drilling to progress on schedule without incurring potential standby time waiting on advance payments for well services.
Comment: It would appear that the idea of PRD not needing to raise anymore near term was somewhat wide of the mark, so it’s no headroom, no problem, via our friends at Novum Securities. Ideally, the shares will continue their recent bull run after any initial head scratching.
Cora Gold (CORA), the West African focused gold company, announced that it has entered into a mandate letter to appoint Atlantique Finance to act as sole adviser in the structuring and mobilisation of a medium-term loan of $70 million in CFA franc to support funding the development of Cora’s flagship Sanankoro Gold Project in south Mali. CORA said it looks forward to working with Atlantique Finance to deliver debt finance for the construction of Cora’s flagship Sanankoro Gold Project. The Banque Atlantique group has extensive experience of debt financing in West Africa.
Comment: Cora is certainly progressing in a way that should see it transform into a significant mining group. Once again, current stock market conditions mean that CEO Bert Monro’s achievements are being undervalued.
Invinity Energy Systems (IES), a manufacturer of utility-grade energy storage, announced its Full Year Results for the year ended 31 December 2022 and provide an update on current trading. The company said it was pleased with the progress made in 2022 along Invinity’s pathway to profitability. Achieving and exceeding its expectations for signing new deals was foundational for achieving the significant increase in revenue it expects in 2023.
Comment: The key point to note with IES is the way that not only is it on the pathway to profitability, it has also over achieved in terms of signing new deals, something which should back the share price over the course of the summer.
Sound Energy (SOU), the transition energy company, provided an update in relation to the project debt funding for the phase 2 development of the Tendrara Production Concession and announces the receipt of a conditioned offer made by Attijariwafa bank. The company said it was delighted to have received the conditioned offer from its debt Arranger and lead bank Attijariwafa bank for an increased amount of MAD 2.365 billion. The majority of the conditions precedent to their offer are to be expected and as a result the company has been advancing a number of these for these for some time.
Comment: It would appear that there is a decent amount of funding swilling around for small cap resources companies and their projects. SOU looks as though it is one of the key beneficiaries currently.
KEFI Gold and Copper (KEFI), the gold and copper exploration and development company, announced the positive assessment of the PFS for Hawiah, the largest discovery to date by KEFI’s 27%-owned Saudi Arabian joint-venture Gold and Minerals Company Limited. KEFI said the PFS demonstrates an attractive project at Hawiah. To date it has only tested a small part of the Hawiah district and it already has a project that can be optimised for development.
Comment: The latest discovery news for KEFI should be just what was required to allow the stock to resume its early 2023 rally from 0.6p to over 1.1p. This is especially true of Hawiah proves to be larger than currently envisaged.
UK Oil & Gas (UKOG) is pleased to announce that it has secured a £3 million committed funding facility with RiverFort Global Opportunities. The company said the facility provides the company with working capital at competitive terms to fully fund its planned key UK and Turkey activities over the coming year. The discharge/conversion terms are attractive in that they will be either at zero discount to the lowest daily VWAP in the 15-days prior to conversion, or at a premium of 35% to the Reference Price of the relevant drawdown, whichever is lower.
Comment: Given the present share price, the funding facility from Riverfort was clearly the obvious option. At least, as UKOG suggests, the funding terms are attractive, and give it the ability to advance its key projects.
First Tin (1SN), a tin development company, confirmed validation of its “Tin District” thesis in the Taronga district, with the first drill hole from its Tin Beetle prospect returning 7 metres @ 0.629% Sn within a broader intersection of 48 metres @ 0.183% Sn from 2 metres depth. The company said it was excited that its Australian team have, with the first drill hole, proven its thesis that Taronga is part of a tin district rather than a singular occurrence.
Comment: Shares of 1SN have finally started to recover after an extended bear run, and news such as today’s should be enough to allow this rebound process to continue in a progressive way.
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.
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