Trader’s Cafe with Zak Mir: SAE, AAA, BOOM, EUA, HOTC, IRR & KMK via Vox Markets

There are a few rare times when a small-cap stock has its missing piece of the jigsaw moment, and this is what we have just been treated to at sustainable energy projects group SIMEC Atlantis (SAE).

By Zak Mir

Already on the Zeitgeist in terms of the green revolution and the carbon zero drive – backed by Government cash, the announcement from SIMEC this week that its major shareholder GFG Alliance is no longer in the hands of the receivers, was as positive as it was surprising. With trading volume in the aftermath of the news at nearly 25x the usual number, it will be interesting to see whether those who day traded the stock might wish they had merely top sliced instead.

While we are not quite yet at the fait accomplit stage with regard to All Active Asset (AAA) and its mooted takeover of Audioboom (BOOM), this may not be too far off. AAA said shareholders representing over a quarter of Audioboom’s equity have already given their irrevocable support to the indicatively priced £12 per share possible offer. This was 12.5 new AAA Shares and 200p in cash per Audioboom Share. AAA added that it recognises Audioboom’s concern about the majority of the possible offer consideration being unquoted equity, but that it is securing a re-listing of its shares on an international exchange. This latter point would probably hearten AAA shareholders given that their stock has been suspended for nearly 3 months. They will however, be able to trade the stock on an OTC basis through Oberon Investments (OBE) from July 30.

There were intriguing snippets this week regarding Russia focused PGM and battery metals group Eurasia Mining (EUA), while the shares remain anchored around the 20p level. The first was Sibanye-Stillwater confirming it will not exercise its right to increase ownership of the joint venture it has with Generation Mining over palladium / copper Marathon Project. Sibanye-Stillwater has continually been active in PGM and battery metals acquisitions recently. At the same time comparisons were being made between the Marathon Project and Eurasia’s flagship Monchetundra asset. EUA’s project has an IRR of 61%, over two times higher than that of the Marathon. Monchetundra also has significantly higher NPV north of $1b even without the Flanks and without Rosgeo JV projects valued by Rosgeo at over $100b in-situ. This may well be the reason that Alexei Churakov recently bought back his entire shareholding.

Hotel Chocolat Group (HOTC) that it had raised £40m via an oversubscribed share placing. The purveyor of eye wateringly expensive chocolate said it would like to use the cash to become a global digital-led brand. The placing was at 335p, with Liberum and Peel Hunt joint bookrunners, while retail investors got their slice of the action via PrimaryBid. Shares of HOTC ended the session up 2% at 367.5p, and it may be worth monitoring how they trade relative to the placing price over the next few days.

Africa focused minerals exploration company IronRidge (IRR) said perhaps not surprisingly, that its senior management team are going to hang around for the next phase of the Company’s project and corporate developments. Chief Executive Officer Vincent Mascolo and Chief Operating Officer – Len Kolff have committed to a further two years with an option for a further two years. Given the company’s transition from explorer to developer and producer, it could be argued that the heavy lifting / dirty work part of the mining cycle is over, with the Ewoyaa Lithium Project fully funded through to production via a binding agreement with Piedmont Lithium.

Shares of Kromek (KMK) rose 8%, ending the week at 6 months highs near 20p. Earlier this month the worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, announced its final results for the year ended 30 April 2021. This showed revenue for the second half was 26% above the first half, with momentum continuing post year end. Kromek has been boosted by new contract wins such as the first commercial order from a security screening OEM customer, meaning that the company is on track to deliver its highest ever annual revenue for the full year to 30 April 2022.

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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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