Trader’s Cafe with Zak Mir: Stocks For 2023 Countdown 15 to 11

15) Marula (MARU): 3.75p Target 10p

Management is one of the keys to success in the small caps area, although the most important factor, one which is very much related to who is running a company, is the ability to execute. Indeed, to paraphrase the saying regarding real estate, execution, execution, execution, is the decisive factor. With CEO Jason Brewer we have someone who on meeting him comes across as a force of nature, very much hands on, boots on the ground, something which alas is rather rare in the mining space where this is very much required. It also helps that he has a Masters in Mining Engineering with Honors from the Royal School of Mines, Imperial College. Having turning the former All Star Minerals into Marula, we are said in the run up to the stock moving up from AQUIS to the AIM market, something which rather intriguingly has been flagged. Therefore, like the run up we are seeing from fellow AQUIS evacuee, Hydrogen Utopia (HUI), this rather provides an open door for the bulls to charge through, as they seek a potentially larger pool of liquidity. Such a thought may have been in the mind of recent stakebuilder Paul McKillen, as he moved up from 5.82% to 9.38% earlier this month. Of course, the key in mining plays is production. We are also in the run up to the major milestone of delivery of the first shipment of high-grade lithium ore under the $5 million lithium prepayment facility to a subsidiary of commodity giant Traxys SARL. The recent development of the company’s move into graphite in the form of the  Bagamoyo Graphite Project in Tanzania, should also be noted as it diversifies itself within the battery metals space.

14) Tirupati (TGR): 33p Target 100p

Speaking of graphite, and production, it should be the case that 2023 is the year when Tirupati crosses over into being a significant world player in the graphite production space. This is important as we attempt to wean ourselves off the China commodities stranglehold, and as the much vaunted EV revolution starts to take place. Indeed, I have been reminded on a number of occasions that lithium-ion batteries should really be referred to as lithium-graphite. This at least underlines the importance of graphite. If the penny dropped on this point with investors to a greater degree than it has already, then one would assume that Tirupati’s share price would be well above its IPO price of 45p from a couple of years ago. In fact, simply on a “water under the bridge basis” we have seen Chairman Shishir Poddar’s company transform itself since 2020, as well as the agenda regarding graphite becoming all the more mature. Recent fundraising by the group also means that 2023 should really be the year when the production kicks in and the revenues soar. Given the way that Tirupati in recent months has kitchen sinked expectations, and bitten the bullet on costs, as well as raising the cash to complete the Suni Resources acquisition. The stage is set for the execution of the 30,000 tonnes a year production target, in the “first half” of 2023.

13)  Quetzal (QTZ): 3.4p Target 10p

We are all too familiar with the meltdown that there has been in the tech space, as the market has travelled down the other side of the mountain that it climbed during the pandemic. Indeed, in the sub sector of the crypto space things have been even more harsh, a point underlined by the demise of FTX, in the most ignominious way. However, such crises offer opportunity, and the opportunity that Quetzal has cracked is to be one of the few fully regulated and integrated providers of both fiat and crypto services. Tap customers can access several major crypto exchanges, allowing them to trade 26 crypto assets and store them in Sterling, Euros and/or US$. While some may feel somewhat squeamish in the current crypto environment, there is little doubt that there is demand for digital assets, and that this demand requires as much security in terms of the security of the entity which they have placed their money. While previous to this year it may have seemed that Tap had engaged in regulatory overkill, at the end of 2022, this has been fully validated. At the same time, the demise of other crypto based platforms acts as a perfect cue for business to flow Tap’s way, a process which one would expect to accelerate next year, as the RTO of Quetzal with Tap is complete in early January. The new company will be known as Tap Global Group, after Quetzal paid a consideration of £20.25m. The market cap of Quetzal on suspension this month was just under £6m. It will be interesting to see how the market reacts once the shares return in a few weeks, hopefully towards a £20m zone market cap.

12) Canadian Overseas (COPL): 18p Target 40p

There was little trepidation in terms of including Canadian Overseas in the stocks for 2023 collection, if only because one suspects the company is marmite as far as many investors are concerned. A combination of the wait for it to get to its “promised land” and perhaps the somewhat John Wayne persona of Arthur Millholland, President & CEO. However, it would appear that as we end 2022, the “Stagecoach” is finally heading in the right direction. We have been helped by the latest announcement from the company regarding costless hedge restructuring, and November’s production increase update. Having at long last closed the Cuda acquisition in July, it seems to start 2023, we are in the home stretch as far as COPL’s executing on its multi-pronged strategy. In fact, the shares seems to be responding to this prospect, actually set to close slightly up on 2022, quite an achievement given how dire the year has been for many. I chuckled to myself in writing this update on the company in the aftermath of a comment on Twitter that hardly anyone on social media is talking about the company. Such social media capitulation is very often a positive sign as it can indicate capitulation on the part of the bulls. With the market now waiting on early 2023 news regarding a speculation of V partner, a buyout, debt restructuring, one can say that this situation appears well poised, with negatives most likely already in the price.

11) Premier African (PREM): 0.5p Target 0.8p

While the share price is not everything as far as a small cap company is concerned, it certainly helps against the backdrop of what is certainly a bear market in the space. It can certainly be said that for shares of PREM to have been a triple digit both this year and last, we have a stock which understandably has earned a decent and loyal retail investor following. This is perhaps set to continue for 2023, given the fundamental drivers currently in place. For instance, we have line of sight at PREM on production, which is due to come on tap early in 2023. Given that we are talking lithium, and this mineral has been one of the few bright lights in H2 2022 as far as the small cap stocks on the London market, there would appear to be everything to play for from a bullish perspective. The December 20 update was something of a lap of honour, with some very pleasant detail thrown in. For instance, the company said multiple thick high-grade zones intersected, with the lithium-bearing mineral assemblage exhibiting high spodumene content in the thickest pegmatite, north and south of the Machakwe river. With progress said to be ongoing as far as the Zulu pilot plant, current timeline expectations look likely to met without issue. Those looking for risk diversification though, should be mindful that Premier is not just lithium, but also  tungsten and rare earth elements, across a number of projects.

Author @ZaksTradersCafe