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Quoted Micro 13 June 2022
AQUIS STOCK EXCHANGE
Psych Capital (PSY) floated on Aquis so that it can take advantage of the opportunities in the fast-growing psychedelic medicines sector. Management is seeking to invest in early-stage companies, where it can obtain a significant minority stake. Psych Capital raised £810,000 at 5p a share. Pro forma net assets are £2m. Psych Capital has cash of £872,000 following the flotation. There is an investment in Awakn Life Sciences Corp that was valued at £584,563 at the end of June 2021. The share price is declining, and it has reached C$0.96, valuing the stake at around £260,000 at the current exchange rate. The share price fell to 4p on 9 June before recovering to 4.75p (3.5p/6p). There is limited liquidity in the shares with a free float of around 11%. Fellow Aquis company Oscillate (MUSH) holds a 16.15% shareholding in Psych Capital. Chris Akers has increased his stake in Oscillate from 9.02% to 11.4%. He also has a 4.96% stake in Psych Capital.
Capital for Colleagues (CFCP) improved interim revenues from £198,000 to £216,000, while recognised fair value gains declined from £1.04m to £297,000. There were 14 investments at the end of the period and net assets were 68.38p a share at the end of February 2022.
Rural Broadband Solutions (RBBS) had 2,851 monthly fee-paying clients by mid-May. There was net cash of £1.2m at the end of 2021 and infrastructure funding is being negotiated.
Newbury Racecourse (NYR) reopened its hotel in January and more than 105,000 racegoers have visited the racecourse so far this year. There have benefits from the catering deal with Compass and new media rights arrangement start at the beginning of 2024, which will benefit that financial year. More will be spent on prize money. Newbury is debt free, and a special dividend has been paid out of proceeds from the sale of land for housebuilding. Annual dividends may recommence next year.
Quantum technology investment company Quantum Exponential (QBIT) has made three investments at a total cost of £1.16m since it floated. There are discussions with more potential investments. There has been further progress towards setting up a fund. Anthony Lyall has been appointed as investment manager and Anna Spandl as investment analyst.
Altona Rare Earths (ANR) says that it is on track for a maiden JORC resource statement for the Monte Muambe rare earths project in Mozambique. Four new drilling targets have been identified.
Ananda Developments (ANA) had net liabilities of £288,000 at the end of January 2022. There should be further news concerning the purchase of the other 50% of DJT Plants.
Tectonic Gold (TTAU) expects to deploy drill rigs in Queensland in the next few weeks following the rainy season.
RentGuarantor Holdings (RGG) has raised £1m from a 6% unsecured loan note issue, with chief executive Paul Foy subscribing for 50% of the issue. The cash will be spent on hiring staff and marketing.
Wishbone Gold (WSBN) has commenced drilling at the Wishbone II gold copper project in Northern Queensland.
Chapel Down Group (CDGP) non-exec Jamie Brooke has bought 327,000 shares at 30.48p each. Jonathan Neame has sold 2,000 shares in Shepherd Neame (SHEP) at 806p each.
Oberon Investments has increased its stake in TruSpine Technologies (TSP) from 7.93% to 10.9%.
EPE Special Opportunities (ESO) had a NAV of 307.13p a share at the end of May 2022.
Former Aquis-quoted proton beam therapy provider Rutherford Health is being placed in liquidation. There are Rutherford Cancer Centres in Newport, Reading, Liverpool and Northumberland, plus a community diagnostics centre in Somerset. It is unclear whether there will be any buyers interested in these assets. Schroder UK Public Private Trust (SUPP) bought the remaining Woodford stake at the end of 2019. It was valued in the books at £22.8m, which will be written off. That will reduce NAV by 2p a share.
AIM
Like-for-like sales growth at City Pub Group (CPC) was 5% in May and 20% ahead over the Jubilee Bank Holiday. Management took a decision to minimise price rises so that food and drink is still relatively affordable. Two new sites have been opened with two more opening over the next few weeks.
Learning and development products and services provider Mind Gym (MIND) fell into loss in the year to March 2022. Revenues were 24% ahead at £48.7m with US revenues growing even faster. Repeat revenues from customers that have bought products and services in the past three years were 86% of the total. Overheads are higher as management anticipates future growth in demand. There were also £500,000 of non-recuring costs. The investment in digital products and services will pay off in future years when profit is expected to grow sharply.
Greater demand for foreign exchange helped Ramsdens (RFX) to move back into profit in the first half. Jewellery retail and precious metals buying also grew revenues significantly. There was modest growth in pawnbroking revenues although the growth in the loan book means that there will be a higher rate of increase in the second half. Overall revenues were £29.3m, up from £19.3m, and there was a pre-tax profit of £2.2m.
Nexus Infrastructure (NEXS) improved interim revenues from £63.7m to £80.3m and the order book is 7% higher at £306.7m. Civil engineer Tamdown’s revenues were more than one-quarter higher while utilities connections business TriConnect reported a small increase in revenues. The biggest increase came from the eSmart Networks business, but that is still less than 11% of group revenues. Nexus is on course to improve full year pre-tax profit from £2.5m to £5.7m.
Open Orphan (ORPH) has an order book worth £64.25m at the end of May 2022. Open Orphan secured a £14.7m contract for an influenza characterisation study and a follow-on human challenge study. The second half is expected to be stronger than the first and the clinical trials services provider should move into profit this year.
Electrical goods retailer Marks Electrical (MRK) reported its first full year results since flotation last November. In the year to March 2022, revenues increased 44% to £80.5m. Underlying earnings were 5.01p a share and the maiden final dividend is 0.67p a share. The company is gaining market share in the domestic appliance and televisions markets and revenues have grown by one-fifth in the first couple of months of this financial year. Brand recognition is improving, but the overall market is likely to be tough. Expanding the product range is helping growth.
Interims from Hercules Site Services (HERC) reflect a period of consolidation for the staffing business. In the six months to March 2022, revenues improved from £14m to £20m, while pre-tax profit slumped from £954,000 to £31,000. Overheads were £2m higher in anticipation of growth in the coming years. The large staff supply contract for HS2 started later in the reporting period and demand will continue to grow. More suction excavators are being delivered and utilisation rates are high.
Greenland-focused AEX Gold Inc (AEXG) has signed non-binding terms for the creation of a joint venture with ACAM that will hold the group’s strategic mineral assets. ACAM will invest £18m for a 49% stake and AEX Gold will inject the non-gold assets and cover site support, logistics and overhead costs. There is an agreement to inject a further £10m on a pro rata basis as long as certain milestones are achieved. AEX Gold’s core asset is the 100% interest in the Nalunaq project, which includes a former producing gold mine.
Plant-based polymers developer Itaconix (LSE: ITX) had already warned that due to destocking 2021 revenues would fall from $3.29m to $2.6m, which is still double the 2019 figure. Itaconix remains lossmaking, but revenues should be much higher in 2022 due to the increased number of products using its ingredients. Revenues are expected to jump back to $4.7m and the loss could halve to $1m.
Rockwood Strategic (RKW) has acquired a 8.75% stake in window ventilators and parts manufacturer Titon Holdings (TON).
Northbridge Industrial Services (NBI), which is set to change its name to Crestchic, says that trading at the core power reliability business is better than the recently upgraded expectations. Previously full year earnings of 12.1p a share were forecast and this was raised to 13.4p a share.
STM (STM) pre-tax profit halved to £1.2m in 2021 and it is expected to recover to £2.9m this year. This will be helped by the completion of investment in IT that brings the personal pension businesses onto one platform. A flow of new SIPP business is anticipated.
Coral Products (CRU) has announced a final dividend of 0.2p a share, taking the total for the year to 1.1p a share. At 17.5p, the yield is 6.3%.
Eve Sleep (EVE) is outperforming a market that has fallen by 29% in the UK in the first four months of 2022 and by 37% in France. More funding is required even though Eve Sleep and a US-based investor was interested in bidding for the mattress supplier. Talks have ended but management is considering its options.
MAIN MARKET
Citius Resources (CRES) has an initial agreement for the potential acquisition of AUC Mining, which has the Kamalenge gold project in Uganda. The proposed £2m cost would be paid in shares at 4.625p each. More cash would have to be raised at the same time. Trading in the shares was suspended at 3p.
Standard list shell GS Chain (GSC) shares have reached a new high of 6.55p, having risen steadily since flotation on 13 May via an introduction at 1p a share. Net assets were less than 0.18p a share, so the share price is at a substantial premium.
Premium listed Ross Group (RGP) shares jumped from 1.45p to 1.7p following a placing raising £163,000 at 1.79p a share, which is still a premium to the higher market price. The previous placing in October was at 2.8p a share. Ross Group is effectively a shell that has an investment in an aquaculture business and is trying to develop its supply chain management business.
Andrew Hore
Alan Green covers Amaroq Minerals #AEXG and Poolbeg Pharma #POLB on this week’s Stockbox Research Talks
Alan Green covers Amaroq Minerals #AEXG and Poolbeg Pharma #POLB on this week’s Stockbox Research Talks
Quoted Micro 18 April 2022
AQUIS STOCK EXCHANGE
Brewer Adnams (ADB) increased its revenues from £50.7m to £57.4m in 2021 and the loss was reduced from £4.3m to £1.39m. There is no final dividend. Net bank debt was £11m. The pension liability more than halved from £11.2m to £5m. Beer volumes were maintained.
S-Ventures (SVEN) says headwinds in the economy have held back sales of its healthy snacks. Even so, like-for-like sales are currently 10% ahead of last year. Cost savings of £300,000 a year have been found at the Pulsin plant-based products business.
Watchstone Group (WTG) subsidiary WTGIL Ltd has lost its VAT appeal. It is considering whether to take the appeal to the Upper tax Tribunal.
Cannabis-related products supplier Voyager Life (VOY) has opened three stores and relaunched its website in the year to March 2022. The Ascend Skincare brand was launched. There was £14.3m in the bank at the end of March 2022. Monthly overheads were just under £50,000. In the 16 months to March 2022, revenue reached £178,000. Revenues are steadily growing. Voyager is still waiting for ingestible products to receive authorisation from the authorities.
KR1 (KR1) has invested $700,000 in Zeitgeist in return for one million ZTG tokens. Zeitgeist is an application specific blockchain for prediction markets and futarchy.
Eastinco Mining and Exploration (EM.P) says that Aterian Resources has been awarded a ten year mining licence for the Agdz copper and silver project in Morocco. Eastinco has agreed to acquire Aterian from AIM-quoted Altus Strategies (ALS). Once the Aterian acquisition is completed Eastinco plans to move to the Main Market.
Goodbody Health (GDBY) says subsidiary PhytoVista Laboratories has been granted a licence to handle Schedule 1 controlled drugs.
Chris Akers has increased his stake in TECC Capital (TEC) from 10.6% to 11.1%. Robert Johnson reduced his stake to below 3%. Chief executive Kiran Morzaria has bought 54,422 shares in Cadence Minerals (KDNC) at 18.37p a share.
Vulcan Industries (VULC) has extended two loans with £1.225m payable on 16 April 2023 and £629,000 on 4 July 2023.
EPE Special Opportunities (ESO) had net assets of 368.49p a share at the end of March 2022.
AIM
Recycling Technologies has pulled its AIM flotation after its chief executive stepped down due to personal reasons. It had apparently raised the money it was seeking but the late change meant that the company has decided to have a smaller private fundraising before having another attempt at floating on AIM.
Loadbanks maker and hirer Northbridge Industrial Services (NBI) is able to concentrate on its core business following the disposal of Tasman. In 2021, revenues from continuing operations were one-fifth higher with a greater proportion of hire business. Pre-tax profit trebled to £3.3m, before the restructuring and convertible loan note redemption costs of £7.6m, which were predominantly asset write-downs. There was a 1p a share dividend. The company is changing its name to Crestchic.
Online electricals retailer Marks Electrical (MRK) reported full year revenues that were 44% ahead at £80.5m and EBITDA margins are 9%. The fourth quarter revenues to March 2022 were 19% ahead at £20.7m. The comparatives are particularly strong because they were during a period of lockdowns when online sales made up a higher proportion of appliance sales. Pre-tax profit is still expected to decline from £6.8m to £6.1m in 2021-22 due to additional overhead costs.
Cambridge Cognition (COG) is building up its clinical trial business. Full year revenues increased by 50% to £10.1m and the digital health company moved into profit. There was £6.8m in the bank at the end of 2021. At least £7.5m of the year-end order book of £17m should be recognised in 2022. More contracts have been secured since the end of 2021.
Asset management services provider MJ Hudson (MJH) grew interim revenues by 48% to £23.4m with particularly strong growth in ESG-related services. Underlying pre-tax profit quadrupled to £1.6m. Net debt excluding leases was £13m at the end of December 2021. New business activity remains strong and there is no direct effect from the weak stockmarkets on revenues. Guernsey-based Saffery Champness Fund Services was acquired during the period.
Telematics firm Microlise (SAAS) reported revenues of £88.2m in the 18 months to December 2021. Annual revenues grew by 17%. Existing customers generated £35.6m in 2021 and there is hardly any customer churn. Annual recurring revenues are £38.9m.
AEX Gold (AEXG) has announced exploration results from the iron oxide, copper, gold project at Sava in southern Greenland. These showed that there is mineralisation. There are three high priority targets.
The lock-up period for shares in Poolbeg Pharma (POLB) distributed by Open Orphan (ORPH) ends on 20 April and new investors are hoping to buy up to £1.6m of shares at 5.9p each. The share price subsequently recovered to 6.7p, having been sliding in recent months ahead of the end of the lock-up period when there were concerns there could be a significant number of shares coming onto the market.
Ince (INCE) is going ahead with the acquisition of broker Arden Partners (ARDN) even though it is losing its nominated adviser status. The merger should be completed on 29 April.
MAIN MARKET
Financials Acquisition Corp (FINS) is a shell looking for a financial services acquisition, particularly in the insurance area. The focus is technology that is used to make the insurance sector more efficient. There was £150m raised at £10 a share. The share price ended the week at 997.5p.
It took a year to secure the transaction, but DG Innovate (DGI) has completed its reversal into Path Investments. The purchase of the electric drive and sodium-ion battery technology developer cost an initial £32.4m in shares at a deemed price of 0.6p a share, which was well above the market price. There was also £2.55m raised at 0.5p a share. The shares opened at 0.45p and ended the week at 0.305p.
Materials developer HeiQ (HEIQ) estimates that revenues were $57.9m thanks to a good fourth quarter. This is despite deferring revenues and $1m in operating profit from technology milestones for the agreement with the Lycra Company for its AeoniQ material into 2022. Operating profit is expected to be $3.4m, compared with the $4m forecast. Revenues are expected to grow by one-fifth this year.
Natural ingredients supplier Treatt (TET) grew interim revenues by 9% to £66.3m. The operating profit will be second half weighted.
Andrew Hore
Alan Green covers AEX Gold #AEXG and Poolbeg Pharma #POLB on this week’s Stockbox Research Talks
Alan Green covers AEX Gold #AEXG and Poolbeg Pharma #POLB on this week’s Stockbox Research Talks
Greenland – Right Opportunity, Right Time? Alan Green talks to AEX Gold #AEXG CEO Eldur Olafsson
Greenland – Right Opportunity, Right Time? Alan Green talks to AEX Gold #AEXG CEO Eldur Olafsson. This AIM and TSX-V listed company’s principal asset is its 100% interest owned Nalunaq Project, an advanced exploration stage property with an exploitation license that includes the previously operating Nalunaq gold mine. The district scale portfolio of gold assets covers over 4,090km2, making it the largest portfolio of gold assets in Southern Greenland covering the two known gold belts in the region. Read about the projects here
Greenland’s Mineral Assets – Right Opportunity and Right Time for AEX Gold
by Arjun Thakkar and Alan Green
Formerly perceived as a remote, inaccessible land mass in the North Atlantic, Greenland is fast developing into a highly desirable and fertile territory for mining companies due to an abundance of metals and minerals. As the ice from Arctic has begun to melt in Greenland due to global warming, energy resources and minerals like gold, iron, rare earth elements have become more accessible.
A progressive political administration has ensured that facilities and opportunities are made readily available to assist in the extraction of natural resources as a central part of Greenland’s plans to become self-sufficient. Detailed regulatory structures are all in place to safeguard the land and environment, and at the same time the Government has created an attractive investment climate to attract global mining giants such as Anglo American.
This pro-mining climate and active support from the Government has also attracted some of the smaller junior mining companies such as AEX Gold.
Greenland’s 2020-2024 Mineral Strategy attracts junior mining companies by making the process of granting applications and mining simpler through a simplified transition from exploration to exploitation with fewer requirements. Greenland has also showed support to the mining industry to diversify the economy by doubling budgets from 2020-2021.
In order to simplify the transition from exploration to exploitation, the government of Greenland has prepared standardised models to ensure fast and easy transition while ensuring all junior mining companies can independently assess the potential profitability of exploitation projects. Further benefits are available, provided that companies follow rules and regulations pertaining to environmental, social or other matters.
AEX Gold
AEX Gold, listed on the London AIM market and Canada’s TSX Venture market (AIM: AEXG, TSX-V: AEX) is a Greenland-focused mining company engaged in the identification, acquisition, exploration, and development of gold properties and other strategic mineral assets. The Company was founded in 2017 by CEO Eldur Olafsson, who previously worked for over 7 years on integrated mining projects in Greenland. Both he and AEX Gold have stated that Greenland represents an attractive ‘untouched’ location for mining companies due to the environmental and political awareness of the Government. Currently AEX Gold operates seven different projects in Greenland – Nalunaq, Vagar, Tartoq, Nanoq, Sava, Saqqaa and Norrearm projects as well as more than 4,000 km2 of exploration ground.
AEX Gold’s commitment towards responsible mining in Greenland has ensured it is eligible to receive benefits from the Government and current administration. The responsible mining charter AEX will adhere to includes use of local wind and hydro power to support the mine at its flagship Nalunaq project, and it will help reduce environmental footprint and any impact on wildlife. There are also social and governance factors that include a target to train and employ up to 50% of the workforce from the local population, the prioritization of Greenlandic law, practices and regulatory standards in all working practices – all this while maintaining continuing constructive dialogue with the government with EIA and SIA objectives.
AEX Gold has set out its intentions, incorporating responsible mining practice with its schedule of works on its corporate website as follows:
- Leverage extensive existing infrastructure in the redevelopment of the past producing Nalunaq mine
- Responsible mining, by bringing benefits to local communities where we operate and to Greenland as a whole
- Managing safety risks by committing to abide by the highest Health and Safety standards
- Exploring innovative technologies to operate in the most sustainable way
Projects
Nalunaq Project
AEX is leveraging first mover advantage to deliver shareholder value by redeveloping the past-producing Nalunaq mine and is generating significant upside from the Company’s portfolio of high-impact exploration assets in Southern Greenland. Having produced approximately 350 thousand ounces of gold between 2004 and 2013, 
Nalunaq has demonstrated a low-cost production potential from past operations. The mine operated until 2013, when it closed as a result of falling gold prices, financial difficulties and a lack of exploration. This led to the site being partially decommissioned in 2014 and the widespread view that the deposit was exhausted. AEX has challenged this view and intends to capitalise on the latest mining and processing methods in its plans to bring the historical mine back into production. The asset has significant pre-existing infrastructure and development left in place by the previous operators, and has access to services like waste incinerator, critical fleet, ambulances, roads and bridges, and a 50 person all weather camp. In February 2021, Halyard Inc. were commissioned to undertake a 3rd party engineering study, focussed on the costs of the main components of the Nalunaq Development. Halyard looked at the cost overrun announced in February 2021, and importantly confirmed that the process design philosophy met the necessary criteria for processing the Nalunaq ore body.
Vagar Project
In a 2019 interview with High North News, AEX CEO Eldur Olafsson stated that he believed there were more gold deposits in the Vagar area in Greenland than previously expected, and that the gold is not only found in connection with quartz, but also in the bedrock itself. Historical data and discoveries confirm that gold deposits in southern Greenland hold high levels of purity. Also in 2019, AEX confirmed that gold had been recorded within the host granodiorite, with grades up to 12.1 g/t Au at Femøren and 14.4 g/t Au at Øresund.
Tartoq Project
AEX’s 100% owned Tartoq project covers the entire Tartoq Gold Belt and all known gold occurrences, for a total of 248 km2. Locally high-grade orogenic gold mineralisation is hosted in a classic Archean greenstone belt setting. Apart from gold, up to 14% Pb, 1,210 g/t Ag and 0.7% Cu have also been identified in semi-massive sulphide lenses.
Nanoq Project
Nuna Nutaaq, licence 2019/113, which host the Nanoq Project comprises of 5 sub areas within the Nanortalik Gold Belt and covers all major gold showings and prospective areas identified by AEX’s regional machine learning study. These targets were previously investigated by Crew Gold, NunaMinerals and Goldcorp. Nanoq itself is believed to be a folded and duplicated gold bearing quartz vein and shear sampled at surface (with channel and grab samples returning up to 175g/t Au and 3.83% Cu) over at least 800m and being open in both strike and depth.
Sava Project
Sava is a large licence targeting IOCG (Iron Ore, Copper Gold) style mineralisation similar in style to the massive deposit of Olympic Dam in southern Australia. This project which is only 30km from the international airport at Narsarsaq, has returned histrocal grades of 3.4% copper, 3.7% zinc, 0.28% molybdenum as well as gold, silver and niobium.
Saqqaa Project
Saqqaa is a Platinum Group Metals (PGMs), Gold and Nickel-Copper bearing dyke systems overlooking the Nalunaq mine. Pervious samples have given up to 10g/t palladium, 6% copper and 1g/t gold.
Nørrearm Project
Nørrearm is one of multiple graphite occurrences within AEX’s licences and exists as a 5m thick graphite and sulphide rich later over 2000m in strike with samples returning 10-14% total graphitic carbon content. This , and other graphite occurrences AEX controls hold many similarities to the Amitsoq deposit run by GreenRoc Mining in southern Greenland.
Exploration Licences
On top of these describes project sites, AEX hold a large land portfolio hosting numerous targets that are being developed into the next projects, these licence areas include:
Anoritooq licence
Anoritooq is divided into two sub-areas: the main zone lies between AEX’s Saarloq and Vagar exploration licenses and covers parts of the Niaqornaarsuk, Akuliaruseq and Nanortalik peninsulas to the northeast of Nanortalik, and a second sub-area on the southeast coast of Greenland that follows the inner parts of Kangerluluk and Igutsaat Fjord. The most advanced gold exploration target in this licence is known as Lake 410, located on the southern end of the Nanortalik Peninsula.
Sarlooq licence
The Saarloq Licence 2020/31 covers an area of 818 km2 and is predominantly underlain by granitoid rocks of the Julianehåb Batholith, with several enclaves of metavolcanic and appinitic rocks. The principal feature of interest is the large, crustal-scale Saarloq Shear Zone that runs through the licence in a north-easterly direction. The shear zone and its subsidiary features represent prospective settings for structurally controlled gold mineralisation, especially in areas where brittle deformation has occurred. Qaqortoq is the closest major town to the Saarloq licence area and forms a good staging post for exploration work.
Kobbermineburgt licence
A new licence area acquired in 2021 that hosts the former producing Josva copper mine and numerous disseminated and strata bound copper sulphide targets
Investment Potential
Despite the impact of a travel ban and Nalunaq project cost increases at the start of 2021, the AEX share price has steadily recovered over the past 4 months, rising from 25p to 35.21p. The exploration team arrived back on site at Nalunaq in June 2021, and with 51 drill holes completed by the end of the year, CEO Eldur Olafsson cited “encouraging early signs from the drilling and the clarity from Halyard” as factors all pushing Nalunaq towards pre-feasibility level study stage, “providing an optimal plan for the project”.
So with extensive local government backing and favourable environmental conditions, Nalunaq looks poised to deliver considerable additional potential, and with six other major minerals projects under development, AEX Gold appears to have timed its Greenland market entry to perfection.
A board and management team with diverse backgrounds all delivering on commitments to stakeholders makes for a solid investment case, and with clear progress at the flagship Nalunaq project, together with sustainable mining practices and an empowered local community, AEX Gold looks to have timed its entry perfectly. Time perhaps for investors to do the same and take full advantage of this steady growth in asset value reflected in a steady, rising share price.