Trader’s Cafe with Zak Mir: PREM, AST, EME, QUIZ, CASP & LBE via Vox Markets

One of the characteristics of trends in the stock market is that they tend to peak too early, clear out most early investors, and then the big bull run finally happens. In the world of Lithium and in the wake of the EV boom/pandemic, the time appears to have come for companies with exposure to this metal.

By Zak Mir

We have seen this in many stocks of late, but it seems that we have a decent positive delayed reaction at Premier African Minerals (PREM), with the shares up nearly 20%. Last month Premier updated on progress at its Zulu Lithium and Tantalum Project in Zimbabwe. At the time drilling was underway, with Pegmatite intersected as expected in drill-hole ZDD55. Laboratory equipment is expected on site in the week commencing 19 July. Traders of late have been licking their lips on the basis that Premier’s license contains more metals than just Lithium.

Another punting favourite was on the rise, this time coming in the form of Ascent Resources (AST), with the shares up 8%, this despite the argument that the company is something of a marmite situation for investors. Clearly, the highlight here as far as those who like a binary bet is the promise of a legal win against the Republic of Slovenia. The added spice is that any time the stock rises significantly, traders may be tempted to think that news of a positive outcome for Ascent is that much nearer, the company’s Cuban resources interests notwithstanding.

Although one could argue that placings are the main reason that companies list on the stock market, they are sometimes treated as if they were an act of betrayal by some commentators. Nevertheless, it would appear that just under a month after its £5m placing, shares of China, Indonesia and the United States focused oil and gas group Empyrean (EME) have churned their way through the extra shares with an 11% rise. Last month company said funds raised will be used to secure a suitable drilling rig and order long-lead items and as it prepares to drill the Jade prospect at its 100% owned Block 29/11 license in China, scheduled for late 2021.

Omni-channel fashion brand Quiz (QUIZ) saw its shares continue to stretch into new higher ground for 2021, with a 9% gain. Last month’s quarterly update revealed that total sales of £17.3m were consistent with the Board’s expectations. The figure represented a £13.1m increase on the revenues generated over the same period last year which had been severely impacted by the first wave of the coronavirus pandemic.

Caspian Sunrise (CASP) proved to be one of the day’s big volume leaders, perhaps as traders digested last week’s news from the company regarding its latest well drilled on the MJF Structure at the BNG Contract Area. Well 154, which was spudded in April 2021, was drilled vertically to a depth of 2,298 meters and then horizontally for a further 250 meters until it reached its full 2,548m length. This is the first horizontal well drilled by the Company and was recently perforated over a 152m length. So far the company has said that using an 8mm choke the well has produced at a rate of approximately 90 tonnes per day or approximately 645 bopd.

The was a similar market reaction in terms of trading interest at Longboat Energy (LBE) after its operational update last week. At the time Longboat said it has been informed by its operator, Equinor ASA, that the Egyptian Vulture prospect in which it has a 15% interest, is on track to spud in late August 2021 using the West Hercules semi-submersible drilling rig. Presumably, some traders are happy to jump the gun / second guess, or just feel lucky with regard to what may emerge. The well is targeting gross mean prospective resources of 103mmboe1 with further potential upside to bringing the total to 208mmboe1. The Geological Chance of Success associated with this prospect is traditionally 25%, with the key risk being related to reservoir quality/thickness.

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Disclaimer & Declaration of Interest
The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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