Sovereign Metals (SVML) announced that Rio Tinto to make an investment of A$40.4 million in Sovereign resulting in an initial 15% shareholding.
Investment proceeds will be used to advance the Kasiya Rutile-Graphite Project in Malawi. SVML said this landmark agreement with Rio Tinto, one of the world’s largest and most accomplished global mining companies, is confirmation of Kasiya’s place as one of the most significant critical mineral discoveries in recent times. The experience and expertise that Rio Tinto brings will truly set Kasiya apart as a potentially globally significant supply of two critical minerals and take us all a step closer to supply chain decarbonisation and achieving net-zero. Furthermore, this is yet another step towards unlocking significant benefits from development of the Kasiya project for Malawi.
Comment: SVML serves up not only the RNS of the day, but what could be one of the RNS’s of the year. There is certainly a wow factor here, and indeed, this underlines the way that previous to today’s news the market really should have rated SVML much higher than thus far. Ideally, this becomes a multi-bagger situation in coming weeks.
Lift Global Ventures (AQSE:LFT), an investment company focused on financial media, technology and the energy sector, announced that is has made an investment of £50,000 into All Active Asset Capital Limited which is a private company investing in the global technology, software and AI space. LFT said it was pleased to be given the opportunity to invest in AAA which has a significant share holding in Sentiance. Sentiance has been developing AI solutions for many years and has a blue chip client base. It was excited to have small shareholding in this AI technology company in what is very a much expanding global industry.
Mosman Oil and Gas (MSMN), the oil exploration, development, and production company, said it had executed a non-binding Heads of Agreement for potential Helium offtake from EP 145, its exploration block in the Amadeus Basin in central Australia. MSMN said it cautions that there can be no certainty that formal agreements will develop from the HOA and notes that at this stage there are many matters to agree including pricing, costs, the terms of any financial support or other material matters which will form the basis of any future formal agreements with Fullcyro and Beltway.
Comment: Given the recent share price performance, which has certainly pulled the rug from under MSMN stalwarts, one would assume that any significant news might be enough to turn the tide. Today’s RNS may just deliver at least an intermediate recovery.
Kanabo Group (KNB), a health-tech company, announced that its 40% owned subsidiary, Kanabo Agritec Ltd., has signed a contract with Taima Growth S.L.. The contract is for the development of an indoor medical cannabis cultivation and processing facility in Madrid, Spain. KNB said securing this agreement marks a pivotal step in Kanabo’s roadmap. The high-quality supply chain that Agritec and Taima’s partnership offers not only ensures access to premium materials but also promises to generate profits and enhance shareholder value for The Group.
Comment: Today’s news from KNB underlines how 2023 is the year when the medical cannabis space is one which has come of age. It is also seen as being an area that could be something of a cash cow, a point alluded to in today’s RNS.
Ondo InsurTech (ONDO), the London-listed leader in claims prevention technology for home insurers, announced a new affiliate partnership with Waterwise – the leading UK water efficiency NGO. ONDO said it has already learned a lot from Waterwise and it has helped it better understand what a material difference it could make in the UK. Bringing together the insurance and water sectors to deploy LeakBot makes sense, as costs are reduced for both parties and together, it has something really scalable that can have a profound environmental impact.
Comment: Today’s backing from Waterwise gives Ondo decent third party validation. However, given that the company has already proved to be one of the stocks of the year, few would suggest that it needs it, other to underline the way that ONDO has a the right business model at the right time.
Wishbone Gold (WSBN) announced the completion of its gravity survey in the Cottesloe Project area, with the results highlighting the prospectivity of this asset. The company said the results of this new gravity survey are very encouraging. By combining all existing data sets comprising of magnetics, gravity, geochem and drill data with the gravity information and have them all pointing to the same area highlights the potential of its Cottesloe asset.
Comment: WSBN continues to make progress on and in the ground, even though judging by the share price, many stock market investors appear to have dialled out of the story for now. Nevertheless, if the company can prove up resources in a significant way, it may turn out to be a recovery play later this year.
SolGold (SOLG) announced that the company has received the Term Renewal from the Ministry of Energy and Mines of the Government of Ecuador for the Cascabel Project Concession. The company said it is making significant strides in the advancement of the Cascabel Project. The 25-year Term Renewal should give all stakeholders confidence in the ability of current management to move forward with its plans for Cascabel and the company.
Comment: Even though the company has been making decent progress in terms of its flagship Cascabel Project, the shares at least in recent times have been doing no better than bumping along the bottom. It may be that the market needs the company to message its prospects in a rather more overt way than it has to date.
Northern Bear (NTBR) report strong finals for the year to March 2023. Revenue increased 14.1% to £69.7m with Operating Profits 13.4% ahead to £2.9m and an increased EPS to 11.7p. Importantly, the net cash improved £1m to £3.2m, this is allows a 4p dividend. plus a special one off 1p making a 5p dividend to be paid. This gives an 8.3% yield at 60p and a P/E is just 5.2x and arguably the best figures NTBR has produced since its IPO in 2006. NTBR are a building services group, and its clients include local authorities, housing associations, NHS Trusts, construction companies and house builders. After some false starts there are now 12 businesses across three divisions and it’s able to leverage these relationships with higher margin services such fire protection and sound insulation into both new build and existing structures. Business remains strong and the inflationary pressure on construction cost are reported to have eased.
Comment: New shareholders will be attracted by the yield and as the price reflects organic growth acquisitions seem likely.
CleanTech Lithium (CTL), an exploration and development company advancing sustainable lithium projects in Chile for the EV transition, announced an upgraded JORC resource estimate of 1.8 million tonnes of lithium carbonate equivalent at a grade of 200mg/L lithium at the Laguna Verde project. This upgrade includes a significant increase (39%) in the Measured and Indicated resource to 1.1 million tonnes LCE, including a large increase (174%) in the Measured resource. The company said it was very encouraged by this upgrade in the Laguna Verde resource estimate to 1.8 million tonnes of LCE with 1.1 million tonnes now in the Measured + Indicated category, providing more confidence in the resource potential and further de-risking of the project after an extensive work programme this year. The resource estimate provides the basis for the Pre-Feasibility Study currently underway with a base case production rate of 20,000 tonnes of lithium carbonate per annum. It expects the study will reaffirm the economic potential for this project as it advances the use of Direct Lithium Extraction to supply green lithium to the EV industry.
Comment: This is perhaps the best upgrade that CTL could have delivered, something which further serves to illustrate how inappropriate the decline in the shares from 90p in February has been, when there was less on the table in terms of Laguna Verde. 1.8m tonnes is likely to both extend mine life and production by significant amounts, and one would expect this to trigger a re-rate in the company, especially in the run up to the ASX listing in the autumn.
Getech (GTC), a locator of subsurface resources, announced the signing of three contracts for Globe, worth together over £0.8 million over the next three years, of which £381k relates to the current financial year. These contracts represent significant additions to the Group’s existing orderbook, which now stands at £4.2 million. The company said it continues to service and expand its long-standing oil and gas client base as these contracts show, enabling its clients to search for new resources far more efficiently and by doing so, significantly reduce their exploration costs.
Comment: Given the recent share price performance, the latest three contract wins announcement may have come to the rescue just in time. The only issue is whether the market regards £0.8m as significant enough to turn the ship around.
BSF (BSFA), the Main Market listed biotech company, provided a commercial update on the progress of City-MixTM, the flagship commercial product of its wholly owned subsidiary 3D Bio Tissues (3DBT). The company said it has made significant progress in the short time since it implemented its go to market strategy for City-MixTM, with an increasing number of commercial partnerships and sales opportunities successfully progressing across its direct and in-direct global sales channels. City-MixTM is a truly differentiated product, with key advantages over traditional media supplements and this is now being realised and evidenced across the cultivated meat industry and by global leaders in the pharmaceutical sector.
Comment: Despite the great progress made at BSF, especially with regard to the USA, it is surprising that there has not been more sizzle in the stock of late. It may be that today’s progress report stirs the pot.
Rainbow Rare Earths (RBW) announced that it has entered into a MOU with The Mosaic Company, to jointly develop a process flowsheet and conduct a preliminary economic assessment related to the extraction of rare earth elements from Mosaic’s phosphogypsum stack in the Uberaba area of Minas Gerais in Brazil. RBW said this agreement with Mosaic represents a major opportunity for Rainbow to apply the proprietary extraction technology developed in conjunction with K-Tech to become a multi-asset producer of rare earth elements from secondary sources. The geographic diversification of our portfolio further de-risks Rainbow as one of the only rare earth development companies with multiple near-term production opportunities and aligns with its aim to be a forerunner in the establishment of an independent and ethical supply chain of the rare earth elements that are driving the green energy transition.
Comment: It can be said that RBW’s latest announcement must be regarded as a significant one, given how much the shares have already risen ahead of it. Nevertheless, one would expect the re-rate to continue at least back towards the highs of last year near 18p.
Pensana (PRE) advised that on 13 July 2023 and 14 July 2023, Paul Atherley purchased 90,000 Pensana ordinary shares at a price of £0.161425 and 120,573 Pensana shares at £0.164875 respectively. Accordingly, Paul Atherley now holds a total of 13,638,471 ordinary shares in Pensana, representing 4.78% of the company’s issued share capital.
Comment: It is always pleasing to see management leading from the front, something that Mr Atherley seems to be doing very keenly. Perhaps he is anticipating the major shareholders who bought in significantly earlier in the year to have a double dip?
Ferro-Alloy Resources (FAR), the vanadium producer and developer of the large Balasausqandiq vanadium deposit in Southern Kazakhstan, announced the production results of the Group’s existing operation for the first half of 2023. The company said with the plant now operating in steady-state and additional concentrate supply contracts in place going into the second half of the year, it expects production to continue on this upward trajectory.
Comment: Shares of FAR have already risen ahead of today’s announcement, as clairvoyant investors have taken their positions. Given the way that the shares were trading near 40p just a couple of years ago, as opposed to 12p now, they may feel there is plenty to go on the upside.
Phoenix Copper (PXC), the AIM quoted USA focused base and precious metals emerging producer and exploration company, announced that the company’s 2023 drilling programme is now underway at the Navarre Creek exploration project in Custer County, Idaho. The company said based on its team’s exploration work up to this point, the results of the fieldwork conducted at Navarre Creek are extremely prospective. These geological characteristics, along with the area’s hydrothermally altered brecciated sedimentary units, make Navarre Creek a primary target for precious metal exploration.
Comment: PXC seems to be happy to go ahead with its everyday activity even without fresh funding news, which some may have been waiting on the edge of their seats for quite some time. Hopefully, the suspense will end soon.
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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