Kodal Minerals (KOD), the mineral exploration and development company, announced a new JORC Mineral Resource estimate (MRE) for the Bougouni Lithium Project located in southern Mali of 31.9 million tonnes (Mt) at 1.06% Lithium Oxide (Li2O), an increase of over 40% from the previous Mineral Resource completed in 2019.
The significant increase is specific to the Ngoualana and Boumou deposits following the drilling programmes completed in early 2023. The company said the significant increase in Bougouni’s lithium endowment is a further step towards becoming a West African spodumene producer of substance and scale. With the results from the latest drilling campaign delivering over 10Mt of resource, it is looking forward to bringing Bougouni into production at the end of 2024.
Comment: KOD finesses its recent funding news with a chunky rise in the new JORC resource, something which should be more enough as a combo to take the shares back towards the highs of this year near 0.9p, by the end of this year.
Greatland Gold (GGP) advise that drilling has commenced at the Meadows gold prospect within the Ernest Giles Project. The company said it is pleased to be drilling the high priority Meadows gold prospect at Ernest Giles following conclusion of the Land Access Agreement. Ernest Giles sits within an underexplored greenstone belt located north of the world-class Tropicana and Gruyere gold operations. As a 100% owned project, Ernest Giles represents an excellent exploration opportunity for Greatland and its shareholders.
Comment: It will be interesting to see whether this latest news from GGP is enough to get the stock over the psychological 10p barrier. There is clearly a long way to go for the shares to get back to the dizzy heights of early 2021, but we seem to be on a trajectory now that could make that possible.
Ananda Developments plc (AQSE: ANA), a company whose ambition is to be a leading provider of cannabinoid-based medicines for the treatment pain conditions, announced that its wholly owned subsidiary MRX Medical Limited has signed a Drug Supply Agreement with the University of Edinburgh and the Lothian Health Board. ANA said the drug supply agreement provides the legal framework for the provision of MRX1, its patent pending cannabinoid medicine, to the CIPN randomised controlled trial. Importantly it also confirms that MRX retains full IP ownership of the medicine and provides Ananda with a pathway to utilise the IP from the trial for commercial purposes. This will be a crucial part of Ananda’s value if the trial is successful and the medicine is able to be commercialised via the NHS.
Comment: ANA continues to do what it should be doing, de-risking and validating its business with high profile and serious counterparties. Being in the run up to NHS commercialisation should be regarded as a sweet spot for the company, and be reflected more seriously in its own market cap.
Atlantic Lithium (ALL), the African-focused lithium exploration and development company, announced that the Company’s wholly-owned Ghanaian subsidiary Green Metals Resources Limited has been granted the Bewadze and Senya Beraku prospecting licences in the eastern portion of the Company’s Cape Coast Lithium Portfolio in Ghana, which holds the flagship Ewoyaa Lithium Project. The company said the grant of the Bewadze and Senya Beraku prospecting licences offers Atlantic Lithium the opportunity to apply its proven exploration strategy over a new significantly underexplored tenure package within its Cape Coast Lithium Portfolio in Ghana. Since it initiated exploration activities in Ghana, it has always bookmarked Bewadze, in particular, to be highly prospective for lithium discovery.
Comment: Given that we are in 2023 it would be surprising if after a company’s shares were unfairly knocked, they should be allowed to rebound when it has subsequently proven its fundamental credentials. This is the position that ALL is currently in, and one would imagine that sometime relatively soon, with newsflow like today continuing, the shares will snap back quite aggressively.
First Class Metals (FCM), the UK metals exploration company, provided an update on the Sunbeam past producing high grade gold mine. FCM said the initial channel results from Roy were encouraging to the extent of justifying the expansion of the Sunbeam property to included inferred structural extensions emphasising the district scale potential of the area. The mineralised structures identified on the property, historically exploited at Sunbeam, Roy and Pettigrew continue to provide tangible encouragement to develop the property towards drilling.
Comment: Drill ready has been FCM’s mantra, and this is what the company continues to deliver in terms of its various projects. Today it is the turn of Sunbeam, as we wait for the market to appreciate what the sum of the parts value truly is here.
Touchstone Exploration Inc. (TXP) provided an operational update and reports its operating and financial results for the three and nine months ended September 30, 2023. The company said the positive impact that initial output from its Cascadura field has had on both its production profile, and more importantly, our operating cash flows is clear. The results from the first few weeks of production at Cascadura demonstrate that it can look forward to materially enhanced operational and financial results.
Comment: Given current stock market conditions it is no surprise that shares of TXP find themselves near the bottom of the range, despite what is a strong update, especially in terms of the cash flows.
Caracal Gold (GCAT), the East African gold producer with over 1,300,000 oz JORC-compliant gold resources, announces financing of US $1,550,000 to support development of the Kilimapesa project. The use of proceeds will include Phase 2 of the Minopex work program, maintenance and expansion capex, costs related to the ongoing expansion financing process and other operational expenses. GCAT said the funds allow it to bring momentum back to the Kilimapesa expansion project and to complete the expansion funding process. The results of the 1st Phase work completed by Minopex have confirmed the robust economics of the Kilimapesa expansion project and the decision to push ahead with parts of the expansion whilst it finalises the expansion funding is good news for Caracal and Kilimapesa stakeholders.
Comment: One might be quite justified in pointing to the ongoing wait for prospectus approval here at GCAT, and ask why in the 21st century these things have to take so long. At the same time directors putting their hands in their pockets in this latest fundraise certainly shows commitment to what is going on at GCAT.
Ondo InsurTech Plc (ONDO), the claims prevention technology group for home insurers, announced a new partnership with Fortune 100 insurance company Nationwide to offer the LeakBot device to U.S. homeowners insurance customers as part of the insurer’s Smart Home Program. The company said it is a great honour to be chosen by one of the biggest and best insurance companies in the U.S. to deploy its water damage prevention system to Nationwide customers as part of its Smart Home Program.
Comment: The latest RNS underlines, as if we did not already know it, that ONDO is set to be rubbing shoulders with blue chip players sooner rather than later. This is particularly the case given that the blue chip names are already becoming clients.
Revolution Beauty Group (REVB) Interims to August show a tremendous improvement after around 18month of turmoil. This multi-channel international (woke) beauty products innovator’s revenue improved 20% to £90.4m with gross margins jumping to 49% from 41%. A PBT of £0.4m compares to a loss of £13.7m, net debt however increased to £23.8m but with significant headroom remaining on banking covenants. Last year, Boohoo the £0.5billion listed and 26% major shareholder, forced a change of management. A new CEO was appointed from Walgreen’s the giant US health and wellness retailer. These results contain an extensive list of operational improvements and marketing initiatives such as tighter internal controls, product focus and geographic expansion, notably an 8% growth in the US store and rest of the world increasing 58%. The guidance for the year-end to March 2024 has been upgraded.
Comment: The shares rose 6% to 28p and an £88m mkt cap yesterday and seem to have further recovery potential. It would appear that the smoke signals in the market that REVB is going great guns were true, something which explains the recent gap higher for the shares.
East Star Resources (EST), which is defining mineral resources in Kazakhstan for the energy revolution, provide an update on the assays from drilling at the Verkhuba Deposit on the Rudny Altai VMS belt. EST said it was absolutely delighted with these initial results which not only demonstrate the Verkhuba Deposit contains relatively shallow high-grade copper but also provide credibility to the >42,000m of historical drill results used in our resource model – which provided a JORC Exploration Target of 19-23 Mt @ 1.4-1.9% CuEq.
Comment: EST continues to deliver a contrast between progress on and in the ground, and the relative lack of stock market appreciation.
Pennpetro Energy (PPP), an independent oil and gas company, advised that the Company’s 100% Chalk Talk #1H well has completed its first full week of test production, since the workover rig demobilized from the well site and the sites were fully commissioned, with a total of 794 barrels of 33 API oil for an average of 113 barrels of oil per day. The company said its Chalk Talk 1H well in Texas is continuing to perform very well and shows excellent flow rates with last week’s test production averaging 113 barrels of oil per day.
Comment: PPP needs to get the message out that the current production flows are going to be the tip of the iceberg, not the iceberg itself. If this is the case then one would expect the recent incipient share price rise to gain some legs.
Great Western Mining Corporation (GWMO), which is exploring and developing gold, silver and copper targets in Nevada, provides the following update on its joint venture, Western Milling LLC (Western Milling), which is currently constructing a process mill in Nevada for recovery of precious metals from mining waste. The company while generation of first revenues will be an exciting development for the Company which will support operations, it wants to point out that the main driver for Great Western’s growth is not the process mill but the enormous upside potential of its large inventory of claims in the Walker Lane Belt of Nevada, which it is working on fruitfully and moving to the next stage.
Comment: Retail investors are notoriously impatient. However, one might venture to suggest that at current share price levels, the waiting game is already in the price at GWMO.
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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