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Alan Green covers Corcel #CRCL and Premier African Minerals #PREM on this week’s Stockbox Research Talks
Alan Green covers Corcel ##CRCL and Premier African Minerals #PREM on this week’s Stockbox Research Talks
Alan Green presents the investment case for Premier African Minerals #PREM and Cadence Minerals #KDNC on his weekly Stockbox Media Research talk
Alan Green presents the investment case for Premier African Minerals #PREM and Cadence Minerals #KDNC on his weekly Stockbox Media Research talk
Cadence Minerals #KDNC – Update on Zulu Lithium Project
Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) announced on the 27 June 2018 that it had entered into a conditional Heads of Terms with Premier African Minerals Limited (“Premier”) to earn up to 30% directly into the Zulu Lithium and Tantalum Project in Zimbabwe.
Cadence completed its due diligence, however, and as a result, it was unable to reach final terms with Premier.
Cadence is continuing to review several upstream mineral assets, where we see the potential to deliver shareholder value by investing in projects that have a short development timeline to cashflow. Our intent is to earn in at a project level basis, and we are focused on assets where we can both hold larger stakes and also utilise our considerable mining and financial management expertise to achieve a high level of returns.
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information:
|
Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
About Cadence Minerals:
Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale – upcoming supersized passenger vehicles, lorries and buses – require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market.
Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return.
The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral’s goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.
Forward-Looking Statements:
Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.
Andrew Hore – Quoted Micro 20 August 2018
NEX EXCHANGE
Health and community care properties developer Ashley House (ASH) reported a much-improved profit for the year to April 2018. There was a strong second half performance because of the completion of four schemes. Full year revenues were flat at £18.5m, while pre-tax profit jumped from less than £100,000 to £1.8m, although that includes a £500,000 write back of a previous impairment charge. Net debt was reduced from £2.5m to £1.5m. The housing and health property pipeline is valued at £206m, covering 22 schemes. The F1 Modular business lost money last year but trading appears likely to improve.
Ananda Developments (ANA) has acquired $200,000 of convertible loan notes in iCAN Israel-Cannabis Ltd, which focuses on medicinal cannabis. This is the first investment for Ananda and the convertibles have an annual interest rate of 6%. The interests of Ananda director Charles Morgan have assigned $100,000 of the convertibles to the company. iCan has subsidiaries involved in organising cannabis symposiums and cannabis-based research services, plus a 5% stake in CannRx Technology Inc, which has developed liquid soluble cannabinoids for use in treatments, and a 20% stake in CMTREX, which is developing a trading platform for cannabis.
Nigel Wray has reduced his stake in High Growth Capital (HASH) from 5.99% to 4.72%. Healthperm Resourcing Ltd (HPR) non-executive chairman David Sumner has bought 29,230 shares at 190p each, taking his stake to 84.7%.
Early Equity (EEQP) says trading in the company shares will resume on 28 August. Trading had been suspended on 16 May. The resumption follows an agreement with NEX Exchange that will change how shares are distributed to related parties. Early Infinity Holdings (EI) is the exclusive distributor for Yicom Global, where Early Equity is a 47. 1% shareholder. EI’s agents sell the products in Malaysia and elsewhere in south east Asia. EI incentivises its agents by gifting them shares in Early Equity. These were deemed to be a gift rather than a trade, so they were not reported. A new nominee company with two trustees that are not shareholders in Early Equity has been set up. This will hold shares for the benefit of agents of EI. Agents will receive a warrant certificate. These agents own 46.7% of Early Equity and shares equivalent to 6.29% of the company will be transferred to the nominee company. Early Equity previously announced that it wants to move to a standard listing. The company’s NAV was £1.54m, including £429,000, at the end of 2017.
Coinsilium Group Ltd (COIN) is investing $125,000 in Bundle Network Ltd, which is developing an online platform that enables the trading of cryptocurrencies. Coinsilium will also receive Bundle Network crypto tokens.
MetalNRG (MNRG) has paid a $50,000 option fee, which could lead to the company gaining a 51% stake in a new company that holds the rights to the Kamyshanovskoye uranium project in the Kyrgyz Republic. The project has an inferred uranium resource that could be worth $144m at $26/lb, plus exploration upside. International Mining Company owns 100% of the project and it would be put into a new vehicle, where MetalNRG would inject cash to gain its majority stake. MetalNRG has 90 days to undertake due diligence and review data. If the option is not taken up the option fee would be converted into a 2.5% stake in the new vehicle.
VI Mining (VIM) is starting its drilling campaigns at minas Pampa and Rosario de Belen, while the vendors are in discussions about changes in the terms of the deals. The timing of the due payment has been extended while the talks continue.
Panther Metals (PALM) has appointed Ariana Resources (AAU) boss Dr Kerim Sener as a non-executive director.
Ecovista (EVTP) is asking for shareholder approval for a resolution that will enable it to issue up to 3.486 billion shares so that management can continue with its strategy.
AIM
Gatemore Investments has increased its stake in TLA Worldwide (TLA), the company famous for issuing a profit warning after the market closed prior to Christmas 2016, from 7.4% to 12.2%. Bart Campbell has stepped down as executive chairman of TLA, but he will continue to receive his monthly salary until the end of the year.
Last year, revenues fell by nearly one-third to £24m at microwave electronic products supplier Filtronic (FTC) but it had already been flagged. The ending of a low margin contract meant that pre-tax profit fell from £2.16m to £1.23m, although that includes exceptional finance charges of £486,000 due to exchange rate movements. The broadband and wireless divisions are being merged because they have similar customer bases. There is net cash of £3.6m plus available bank facilities. Investment in new products continues and there is long-term demand from investment in 5G networks and security-related areas.
Marshall Motor (MMH) reported a decent set of figures given the tough new car market, which is exacerbated by the decline in diesel car sales. There was a small dip in continuing revenues but underlying pre-tax profit edged up to £16.4m. Used vehicle profit improved. The dividend is maintained at 2.15p a share. Trading will be even tougher in the second half, partly due to testing regulation changes, and full year profit is expected to decline from £29.1m to £24.2m. There is a strong balance sheet with a NAV of £201m.
Zamano (ZMNO) has ended discussions with its potential reverse takeover target. This means that cash is likely to be returned to shareholders.
Condor Gold (CNR) has been granted an environmental permit for developing a processing plant for the La India project by the Nicaragua authorities. Gold production could be 80,000 ounces a year from a single open pit. Accounts for the six months to June 2018, show cash of £1.57m.
Abzena (ABZA) is recommending a 16p a share cash bid from Astro Bidco, which values it at £34.4m. The life sciences company joined AIM four years ago when it raised £20m at 80p a share. It needs additional finance pumped into the business.
Oil and gas producer Empyrean Energy (EME) has received a $906,000 tax refund from the IRS from the 2016-17 tax year.
SalvaRx Group (SALV) is selling its business to a Toronto-quoted company in return for shares, most of which will be distributed to shareholders. The 94.2% stake in cancer drugs developer SalvaRx Ltd is being swapped for 757.9million shares in Portage Biotech Inc, which are deemed to have a value of $67.5m. SalvaRx shareholders will receive 18 Portage shares for each SalvaRx share they own if they approve the disposal. SalvaRx will retain around 100 million Portage shares and become a shell.
ClearStar (CLSU) has been named as preferred contract labour screening provider for Gulfstream Aerospace. This should contribute to a reduction in loss this year.
Premier African Minerals (PREM) has raised £750,000 at 0.18p a share. Premier plans a drilling programme of up to 2,750 metres to expand the resource base at the RHA Tungsten mine. The cash should last until the end of 2018.
MAIN MARKET
Tex Holdings (TXH) reported a slump in interim pre-tax profit from £423,000 to £96,000 even though there was a small reduction in admin expenses. There was a much better contribution from the plastics division but that was more than offset by the slump in profit by the engineering division due to delays in orders. Metal fabrication and powder coating business Argento UK has recently been bought. The interim dividend is unchanged at 2.5p a share.
Nanoco (NANO) expects the first displays using its cadmium-free quantum dots to be launched before Christmas. Volume production is expected at the new Runcorn plant before the end of 2019. The 2017-18 revenues were lower than expected because it could not recognise a payment from a large customer. Net cash is estimated at £7.9m at the end of July 2018.
Dukemount Capital (DKE) reported an increase in full year loss from £177,000 to £286,000. The NAV was £379,000 at the end of April 2018. There is £148,000 in the bank. Dukemount is on the brink of moving forward with its first two supported living developments.
PV Crystalox Solar (PVCS) has settled its claim with a customer. The customer will pay a total of €28.8m, of which the outstanding payment of €14.3m will be paid at the end of November. The customer has also waived the delivery of the solar wafers that were supposed to be supplied.
Andrew Hore
Cadence Minerals #KDNC signs HoT with Premier African Minerals #PREM to earn in up to 30% of Zulu Lithium Project
Cadence Minerals (AIM/NEX: #KDNC; OTC: KDNCY) is pleased to announce that it has entered into a conditional Heads of Terms with Premier African Minerals Limited #PREM to earn up to 30% directly into the Zulu Lithium and Tantalum Project in Zimbabwe by investing up to US$5.1M. This investment will fully fund the Definitive Feasibility Study (“DFS”) of the Zulu Project, which in November 2017 reported a scoping study with a lithium concentrate net present value (“NPV”) of US$127M and a lithium carbonate NPV of US$718M.
PROJECT HIGHLIGHTS
- Scoping Study reported target annual production of 84,000 tonnes of spodumene concentrate and 32,500 tonnes of petalite with gross revenues of US$ 1 billion
- Pre‐tax Net Present Value (“NPV”) of US$127 million (10% discount rate) and Internal Rate of Return (“IRR”) of 86%
- Mineral Resource Estimate of 20 million tonnes (“Mt”) at 1.06% Lithium Oxide (“Li2O”) containing 526,000 tonnes of Lithium Carbonate Equivalent (“LCE”)
- Initial Capital Cost of US$64 million, direct operating cost of US$486 per tonne of concentrate
- Initial 15+ year mine life at an average strip ratio of 5.5:1
- Significant potential for additional mineralisation with a 120 to 160 Mt exploration target over the Zulu Project
INVESTMENT HIGHLIGHTS
- Up to US$5.1 million investment into Zulu Project to earn 30% through a five stage investment programme against project deliverables – fully funding DFS
- On completion of the fifth stage of the investment
- § Cadence will be granted a right of first refusal to increase its stake to 49% of the project
- § Cadence will be awarded exclusive marketing rights on the sale of all mineral products
- Cadence will have the right on the completion of the first stage of investment to appoint one director to both the board of Zulu and the board of Premier. On completion of the fifth stage Cadence will have a right to appoint a further board member to the board of Zulu
- A technical committee will oversee the management of the DFS, consisting of five persons. Cadence and Premier will be entitled to each appoint two members of the technical committee and will jointly appoint a project manager
- Investment subject to due diligence by Cadence and exclusivity agreed for a period of 60 days
Kiran Morzaria, Chief Executive Officer, added: “The Zulu Lithium Project is well advanced, with significant mineral resources, robust scoping study economics and ample room for expansion given the size of the exploration targets.”
“By coupling Premier’s local relationships and country expertise and Cadence’s experience in lithium project development both parties will be able to unlock value, rapidly advance this project with the aim of developing Zulu into a significant producer to supply the expanding lithium market.”
“Securing the right to earn into this asset dovetails well into Cadence’s strategy. That is to invest in assets with shorter development timelines, meaning earlier cashflow, and invest directly into the project, taking significant stakes and be part of the management team.”
Proposed Transaction
On 26 June 2018, Cadence & Premier African Minerals (together the “Parties”) entered into a conditional Heads of Terms. The intention is to replace these Heads of Terms with a binding Investment Agreement (“Investment Agreement”). Cadence has agreed to acquire up to 30 per cent of the issued share capital of Zulu Lithium Mauritius Limited (“MauCo”), a company wholly-owned by Premier by investing up to US$5,100,000 to fund the DFS of the Zulu Lithium Project. MauCo wholly-owns Zulu Lithium (Private) Limited, a company registered in Zimbabwe owns the Zulu Project and operated at a financial break-even per its latest published accounts.
The investment will be payable in 5 instalments and each instalment will become convertible into ordinary shares of MauCo following each disbursement of proceeds in accordance with the Project Development Budget as set our below:
|
Stage |
% in MauCo |
Investment Amount |
Conditions precedent for payment of each Investment Amount |
|
1 |
10% |
US$1,500,000 |
Investment Amount payable on · completion of the Investment Agreement; and · mobilisation of the drilling and the commencement of the DFS work at the Project |
|
2 |
5% |
US$1,200,000 |
Investment Amount payable on completion of 5000 meters of diamond core drilling unless otherwise agreed in writing; |
|
3 |
5% |
US$1,100,000 |
Investment Amount payable on completion of a further 5000 meters of diamond core drilling unless otherwise agreed in writing; |
|
4 |
6% |
US$950,000 |
Investment Amount payable on confirmation of 50% of drilled core having been assayed and reported to the Parties by accredited independent laboratory unless otherwise agreed in writing; |
|
5 |
4% |
US$350,000 |
Investment Amount payable on completion of 40% of the DFS unless otherwise agreed in writing; |
|
TOTAL |
30% |
US$5,100,000 |
The Parties agree that the Investment will be applied in accordance with a project development budget. Any overruns of will be apportioned pro rata to each Party’s respective interest in MauCo providing such overruns could not have been reasonably planned for. Any variation in the project development budget will require written approval by Cadence and Premier.
The Investment is subject to standard anti-dilution and down-round protection. In particular, if any Party fails to pay its full share of any amount due under the project development budget by the due date, MauCo shall as soon as possible give notice of such default to all the Parties. The non-defaulting Parties shall within 15 business days, following the date of service of the default notice on the defaulting Party contribute to the amount in default pro rata to its percentage interest in MauCo (the “Default Contribution”). If the default continues for more than 45 days from the date of service of a default notice then the non-defaulting Parties will be entitled to convert its Default Contribution into shares in the capital of MauCo at a price per share at which the Investment Shares were valued.
In addition, if at any time for a period of 24 months after completion of the DFS any new shares in the capital of MauCo (of any class) are issued by MauCo which would result in Cadence’s shareholding in MauCo being diluted by at least 15% at a price at least 15% below the price the Investment Shares were issued (“Down Round Price”), MauCo shall immediately issue to Cadence such number of new shares necessary to price the completed Investment at the Down Round Price.
A technical committee will be established to oversee the management of the DFS, consisting of five persons. Cadence and Premier will be entitled to each appoint two members of the technical committee and the Parties will jointly appoint a project manager.
The Parties have acknowledged that at the date of the Heads of Terms an aggregate amount of US$4,064,374.88 has been advanced by Premier to MauCo (“Premier Loan”) and the Parties have agreed that the Premier Loan and any interest due under the Premier Loan will be offset on a pro rata basis against the Investment Amounts paid by Cadence to MauCo.
Following the payment of the stage Investment Amount of US$1.5 million, Cadence may appoint one director to serve on the boards of Premier, MauCo and/or Zulu and following the payment of stage 5 Investment Amount, Cadence may appoint a second director to serve on the boards of MauCo and/or Zulu.
The Parties have further agreed that Cadence will, following the payment of the stage 5 Investment Amount:
(i) be awarded exclusive rights on commercial terms to the marketing and sale of all mineral products for the benefit of MauCo (“Marketing Rights”); and
(ii) be granted an irrevocable right of first refusal (“ROFR Investment”) to subscribe for such number of shares in the share capital of MauCo equating to an additional 19% of the issued and fully diluted share capital of MauCo on terms no worse than those offered to MauCo by another potential investor.
Completion of the Proposed Transaction is conditional on the following matters:
(i) All relevant shareholder approvals being obtained;
(ii) Cadence’s satisfaction with the final form of the Investment Agreement, completion of due diligence and the Project Development Budget;
(iii) the Parties agreeing, signing and exchanging the Investment Agreement that incorporates all the terms of the Proposed Transaction; and
(iv) there being no material adverse change in the business, operations, assets, position (financial, trading or otherwise), profits or prospects of MauCo or Zulu between the date of this letter and completion of the Investment Agreement.
Cadence can therefore not guarantee that the transaction will proceed. Cadence may at any time following completion of the Investment Agreement: (i) on the occurrence of a force majeure event; or (ii) if test work and drilling at the Zulu Project result in unsatisfactory results, elect to terminate the Investment Agreement. Should Cadence elect to terminate the Investment Agreement then Cadence will forfeit the Marketing Rights.
Premier has granted Cadence an initial period of exclusivity from the date of signature of the Heads of Terms for a period of 60 days during which period Cadence shall complete sufficient due diligence so as to be able to convert the outline terms in this term sheet into a definitive agreement.
H&P Advisory Ltd is acting as financial advisors to Cadence Minerals.
Project Details and Scoping Study
The Zulu Project is located 80km from Bulawayo in Zimbabwe. The project is generally regarded as potentially the largest undeveloped lithium bearing pegmatite in Zimbabwe. Zulu comprises 14 mineral claims covering a surface area of 3.5 km2 which are prospective for lithium and tantalum mineralisation.
The Zulu Project has substantial resources. Following a successful 2,500 metres diamond drilling programme between September 2016 and February 2017, Premier published a Maiden SAMREC compliant Inferred Mineral Resource Estimate of 20.1 million tonnes grading 1.06% Li2O and 51 ppm Ta2O5 using a cut-off grade of 0.5% Li2O on the Main Zone. The Mineral Resource Estimate contains 526,000 tonnes LCE and 1,025 tonnes of Tantalum Pentoxide. The Mineral Resource Estimate covers only 35% of Zulu’s known 3.5km surface strike length. This Mineral Resource Estimate as the deposit remains open at depth and along strike. The exploration target for the Zulu Lithium Project is between 120-160 million tonnes.
The scoping study identifies a target production of 84,000 tonnes of spodumene concentrate and 32,500 tonners of petalite concentrate per year for an initial 15 year life of mine to be the most appropriate option. The significant exploration potential already identified close to the existing resource base, together with the fact that mineralisation is open at depth and on strike, and the new zones identified, indicate significant potential for a substantial increase in life of mine and production targets.
The Scoping Study assessment of a pre-tax NPV10 value of US$127M is based on prices of US$800/t spodumene and US$400/t petalite concentrate prices respectively. The results of the Scoping Study are set out in Table 1 below.
Table 1 – Zulu Project Scoping Study Results (concentrate sale option)
|
Zulu – Economic Summary |
Unit |
Value |
|
Life of Mine (LOM) |
Years |
15 |
|
Spodumene Concentrate Sold |
tonnes |
1,146 |
|
Spodumene Concentrate Prices (LOM Average) |
US$/t |
800 |
|
Petalite Concentrate Sold |
Tonnes |
445 |
|
Petalite Concentrate Price (LOM Average) |
US$/t |
400 |
|
Gross Revenue |
US$ |
1,095 M |
|
LOM C1 Operating Cost Total |
US$ |
773 M |
|
LOM C1 Operating Cost Per tonne of concentrate |
US$/t |
486 |
|
Royalties |
US$ |
17 M |
|
NPV and IRR (Concentrate Sales Option) (Notes 1,2 and 3) |
||
|
Discount Rate |
% |
10 |
|
Pre‐Tax NPV |
US$ |
127 M |
|
Pre‐Tax IRR |
% |
85.9 |
|
Pre‐Tax Payback Period |
Years |
2 |
|
After‐Tax NPV |
US$ |
92 M |
|
After‐Tax IRR |
% |
65 |
|
Peak Funding Requirement |
US$ |
38.4 |
|
Operating Margin |
% |
27.7 |
Note 1: The NPVs are shown for the gross value of the Zulu Project.
Note 2: All NPV values extracted from the Scoping Study have been rounded to the nearest whole million.
Note 3: Source-Scoping Study
In addition to considering the sale of spodumene and petalite concentrates, a secondary option of selling lithium carbonate was evaluated. This option entails the transportation of spodumene and petalite concentrates from the mine to a lithium carbonate plant in Bulawayo. The operating costs were estimated at US$2,100 per tonne of lithium carbonate and capital costs were estimated at US$130 million for the plant. The results of this option are set out in the table 2 below.
Table 2 – Economic summary Lithium Carbonate Option
|
Zulu – Economic Summary (Notes 1,2,3 and 4) |
Unit |
Value |
|
Initial Capital Costs (including 30% contingency) |
US$ |
238 M |
|
Lithium Carbonate (including 30% contingency) |
US$/t |
15,000 |
|
Discount Rate |
% |
10 |
|
Pre‐Tax NPV |
US$ |
719 M |
|
Pre‐Tax IRR |
% |
80 |
|
After‐Tax NPV |
US$ |
524 M |
|
After‐Tax IRR |
% |
63 |
|
Peak Funding Requirement |
US$ |
178 M |
|
Operating Margin |
% |
61 |
Note 1: The NPVs are shown for the grass value of the Zulu Project.
Note 2: The initial capital cast for the Lithium Carbonate Option includes the capital cost for the Concentrate Sales Option.
Note 3: All NPV values from Scoping Study have been rounded to the nearest whole million.
Note 4: Source-Scoping Study
The full Scoping Study is available at: https://www.premierafricanminerals.com/component/rsfiles/download?path=Technical%2BReports%252F2017%2BZulu%2BLithium%2BProject%2BScoping%2BStudy%2B-%2BBara%2BConsulting.pdf
This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014.
For further information, please contact.
Cadence Minerals plc +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker) +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Hannam & Partners LLP +44 (0) 207 907 8500
(Financial Advisors & Joint Broker)
Neil Passmore
Ingo Hofmaier
Square1 Consulting +44 (0) 207 929 5599
David Bick
Qualified Person
Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.
About Cadence Minerals:
Cadence is dedicated to smart investments for a greener world. The planet needs rechargeable batteries on a global scale – upcoming supersized passenger vehicles, lorries and buses – require lithium and other technology minerals to power their cells. Cadence is helping find these minerals in new places and extracting them in new ways, which will meet the demand of this burgeoning market. With over £30 million vested in key assets globally, Cadence is helping us reach tomorrow, today.
Cadence invests across the globe, principally in lithium mining projects. Its primary strategy is taking significant economic stakes in upstream exploration and development assets within strategic metals. We identify assets that have strategic cost advantages that are not replicable, with the aim of achieving lower quartile production costs. The combination of this approach and seeking value opportunities allows us to identify projects capable of achieving high rates of return.
The Cadence board has a blend of mining, commodity investing, fund management and deal structuring knowledge and experience, that is supported by access to key marketing, political and industry contacts. These resources are leveraged not only in our investment decisions but also in continuing support of our investments, whether it be increasing market awareness of an asset, or advising on product mix or path to production. Cadence Mineral’s goal is to assist management to rapidly develop the project up the value curve and deliver excellent returns on its investments.
About Premier African Minerals Limited:
Premier African Minerals Limited (AIM: PREM) is a multi-commodity mining and natural resource development company focused on Southern Africa with its RHA project in Zimbabwe.
Premier has a diverse portfolio of projects, which include tungsten, rare earth elements, lithium and tantalum in Zimbabwe, encompassing brownfield projects with near-term production potential to grass-roots exploration. In addition, the Company holds 5,010,333 shares in Circum Minerals Limited , the owners of the Danakil Potash Project in Ethiopia, which has the potential to be a world class asset. Premier also has an interest in Arc Minerals that has a number of mineral assets in Europe and Africa.
Forward Looking Statements:
Certain statements in this announcement are or may be deemed to be forward looking statements. Forward looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors. Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward looking statements.
Andrew Hore – Quoted Micro 8 January 2018
NEX EXCHANGE
Kryptonite 1 (KR1) has invested $249,000 in a presale of 4,775,686 Simple tokens in a project administered by OpenST Ltd. The plan is for the tokens to be used to enable digital currencies to be launched by businesses. There has also been a $100,000 investment in the presale of tokens in the Props project. That bought 859,569 Props tokens. These tokens are used as a cryptocurrency as part of a decentralised ecosystem of video applications.
DagangHalal (DGHL) has launched its mobile app MEEMBAR (meaning raised platform in Arabic), which is targeted at Muslim travellers, on the Android platform. The app provides details of mosques, hotels and restaurants in an area. The app will become available on the IoS platform later this year. Longer-term, the company wants to introduce the ability to undertake transactions.
AIM…….
Housing developer Inland Homes (INL) ended the year strongly, selling two sites for a total of £12.7m. Inland Partnerships, which develops social housing, has entered into a £29.5m contract to develop 136 homes.
Kestrel Partners has taken a 4.32% stake in telematics equipment and services provider Trakm8 (TRAK).
Gear4Music (G4M) says that Christmas sales grew by 42%. The online musical instruments retailer is still on course for a full year profit of £2.4m.
Peter Scott is taking on the role of chief executive at digital marketing services provider Be Heard Group (BHRD) and David Morrison will replace him as chairman.
Smart metering technology supplier CyanConnode (CYAN) says that its order book is in excess of $100m even though a large order has been delayed. There was £5.5m in the bank at the end of 2017.
Cambria Automobiles (CAMB) has announced a new Lamborghini dealership in Chelmsford on the same site as the Bentley dealership. The showroom should be open by the end of the first quarter. A new site in Hatfield to house the new McLaren dealership and the company’s other dealerships in the area should be completed by the end of the year. Cambria is still cautious about the UK car market. Trading in the first quarter is in line with expectations. Chairman Philip Swatman and his wife sold 100,000 shares at 57p a share, leaving them with 200,000 shares.
Marble quarry operator Fox Marble Holdings (FOX) is raising £2.76m through a placing at 10.5p a share and Indian firm Kesari Tours PVT is investing £2m of the cash. Kesari boss Shailesh Patil has committed to buying a minimum of 3,000 tonnes a year of marble in return for exclusivity in the Arabian Gulf. Fox is also raising £235,000 via a convertible loan note issue and capitalising £783,000 of debt. Directors are also taking part of their pay in the form of shares. Fox will use £1.5m of the cash to repay debt and the rest will go towards expanding production. Total marble production was 8,800 tonnes in 2017. The new processing facility has capacity of up to 440,000 square metres a year so it will be able to cope with much higher quarry production.
Network data processing technology supplier Ethernet Networks Ltd (ENET) has disappointed the market six months after flotation. A customer has chosen to sign up to a different proposal than expected and two other projects have been delayed until 2018. This means that 2017 revenues and profit will be lower than anticipated, although profit will be higher than 2016. In 2016, revenues were $2.16m and operating profit was $339,000, which was exceeded in the first half of 2017 even though revenues were much lower.
Victoria Oil and Gas (VOG) says that its gas supply contract with ENEO in Cameroon has not been extended. This had covered 53% of Logbaba gas sales revenues in 2017. ENEO owes $8.7m.
Churchill China (CHH) says that its 2017 results will be slightly better than expected thanks to strong export sales. Full year figures will be published on 27 March.
Strand Hanson has resigned as nominated adviser to BNN Technology (BNN) following news that the company failed to account for a bonus claimed by Darren Mercer. The £270,000 bonus has been offset against the £450,000 he owes the company. Mercer also claims that the remaining amount of the loan should be reduced.
Corero Network Services (CNS) has gained $400,000 of contracts for its SmartWall cyber security system.
Ultrasound simulation technology provider Medaphor Group (MED) says that 2017 revenues were 27% ahead at £4.2m. The loss will be £2.9m. There was £4.2m in the bank at the end of 2017.
Cantor Fitzgerald has downgraded its 2017 profit forecast for waste treatment and energy generation plants developer Green and Smart Holdings (GSH) from RM7m to RM6.7m and the 2018 figure from RM16.9m to RM10.8m because of delays to electricity generation projects. Local project finance is taking longer than expected to secure.
Attractions designer Paragon Entertainment Ltd (PEL) chief executive John Dobson has acquired 1.43 million shares at 2.5p each. That increases his stake to 6.55%. This has helped the share price to recover after almost a year of decline following disappointing trading statement.
Babestation producer Cellcast (CLTV) says that it intends to provide for the £495,000 it had invested in the Lexinta fund, which is being investigated by the Swiss authorities. The investment vale had been raised to £754,000 in the last accounts. This appears to be in the trade receivables in the balance sheet last June. There was £862,000 in cash in the bank.
European PR firm SEC (SECG) has acquired 51% of Colombia-based Newlink for up to €2.2m and this could rise to €4.3m if the option to acquire the rest of the shares is taken up in the next five years.
TyraTech Inc (TYR) will buy back $8.4m worth of shares at the tender price of 3p a share.
Oil and gas firm San Leon Energy (SLE) has ended bid discussions with two potential bidders. A potential reverse takeover is still on the cards.
Even though Crawshaw Group (CRAW) says that the performance of its factory shops has been good, like-for-like sales for the delicatessen products retailer have declined. This has led Peel Hunt to increase its loss forecasts for this year and next year as like-for-like revenues are expected to continue to decline.
Egdon Resources (EDR) has had its appeal for planning permission for the Wressle oil development in Lincolnshire. Egdon owns 25% and Union Jack Oil (UJO) has a 15% stake. Egdon has been allow to retain the original planning permission until the end of April.
ReNeuron (RENE) is consolidating 100 shares into one new share. Management hopes that this will help to attract institutional investors. The cell-based therapeutics developer had £45.3m in the bank at the end of September 2017.
Christopher Brown is stepping down as chief executive of TomCo Energy (TOM) but he will remain for the short-term. He has agreed to loan £100,000 to the company.
Packaging machinery manufacturer Molins (MLIN) is changing its name to Mpac following the sale of the Molins tobacco machinery business.
The People’s Operator (TPOP) has returned from suspension having completed its £2.82m fundraising at 0.1p a share. The London Stock Exchange says that the settlement of outstanding trades is occurring and it allowed the restoration in dealings, but it says that it will continue to closely monitor the situation.
BOS Global Holdings (BOS) has appointed Marcus Yeoman, Will Giles and Michael Wilczynski to the board andMark Uren has resigned, which means that it does have the minimum required number of three directors. The finances of the software developer remain uncertain and trading in the shares is still suspended. A general meeting requisition has been withdrawn.
Average oil production from the Trinidad operations of Range Resources Ltd (RRL) in the fourth quarter of 2017 was 629 barrels a day and the current daily production is 703 barrels a day.
Premier African Minerals (PREM) did not meet its guidance on production at the RHA tungsten mine in the last quarter of 2017 and this means that it did not achieve profitable production in December. Premier has said that it would not provide any more cash unless profitability were achieved. Premier is spinning off the Zulu lithium project, which could have a value greater than Premier, and drilling programmes could be funded by offering a stake in the new company.
MAIN MARKET
Cayman Islands-based cash shell AIQ Ltd (AIQ) (ww.aiqhub.com) is joining the standard list on 9 January. AIQ has raised £3.6m after expenses, mainly at 8p a share. The plan is to seek an e-commerce acquisition, which has a strong management and is near to cash generation.
North American oil and gas explorer and producer PennPetro Energy (PPP) acquired Nobel Petroleum UK last May, which gives it a 75% working interest in City of Gonzales petroleum leases in Texas. Nobel has secured £2m in additional funding for the leases. PennPetro joined the standard list and was valued at £17.7m at 25p a share. Former Arsenal managing director Keith Edelman is chairman.
Andrew Hore
Andrew Hore – Quoted Micro 27 November 2017
NEX EXCHANGE
Kryptonite 1 (KR1) has invested $986,000 in DOT tokens, which are related to the Polkadot Project. A total of $150m was raised to finance the development of a decentralised protocol that allows trust-free movement of tokens and data between blockchains., that will also be able to create new parachains instead of starting a new community. The project is expected to go live by the end of 2019. Kryptonite 1 has sold Melon, Omisego and FunFair tokens in order to raise just over £290,000. That is a gain of around £270,000.
Via Developments (VIA1) has agreed to sell Plymouth Grove, Manchester for £2.5m. A non-refundable deposit of £250,000 has been paid and the deal should go through by the end of November. The property was originally acquired in June 2016 for £1.625m, although there will have been additional investment in development since then. In March, Via Developments announced a previous exclusivity agreement to sell which was dependent on planning permission. There was a refundable deposit of £100,000 for that potential deal. It is unclear whether the deals are related.
Health and care properties developer Ashley House (ASH) has welcomed the increased funding for health and housing schemes announced in the Budget. News that the government will not cap rents in the supported living sector has improved sentiment. Financial closure is anticipated on two projects in the next few weeks. Management continues to seek additional finance.
Block Energy (BLOK) has published its Schedule 1 notice for its proposed move to AIM. This is expected by 7 December.
Sandal (SAND) says that trading is in line with expectations with Energie MiHome sales trebling. By the end of 2018 the energy efficiency products should be generate as much in revenues as the power connections division.
There were 300,000 shares taken up in the Hellenic Capital (HECP) open offer but £250,000 was raised because the rest of the shares were placed.
Primorus Investments (PRIM) has raised £1m at 0.2p a share, which was a small premium to the previous closing price. The cash will finance further pre-IPO investments. Turner Pope has been appointed broker.
Trading in the shares of Churchill Mining (CHL) should recommence when the figures for the year to June 2017 are published. That should be before the end of November. Pala Investments has subscribed for £500,000 of 10% convertible loan notes, which have a conversion price of 2.976p a share. Pala holds 21.3% of Churchill and full conversion of the loan notes would take the stake to 29.3%. Pala is also entitled to receive 25% of any proceeds from the claim for unlawful expropriation of the East Kutai coal project. Churchill is hopeful of overturning an unfavourable ruling on the case.
Etaireia Investments (ETIP) has issued shares valued at £21,750 at 0.09p a share in settlement of an outstanding loan from Blue Oak Assets. The deferred payment of £20,000 for the purchase of Pacha Cleator from Oliver Fattal has been satisfied by a share issue at the same price. That takes his stake to 9.96%.
Ken Riley is no longer finance director and company secretary of WMC Retail Partners (WELL) and Nigel Higgs has taken over as interim finance director.
AIM
Accrol Group Holdings (ACRL) is raising £18m at 50p a share, which should be enough to keep the toilet roll business going. A restructuring of the business is underway and health and safety procedures are being reviewed. The bank facility has been extended until 2021. The share price fell by more than two-thirds when the suspension was lifted and ended the week at 37.5p.
Immunodiagnostic Systems Holdings (IDH) published its interims at 4.30pm on Friday. That means that the share price reaction will be on Monday. There were no shares traded in the diagnostic services provider on Friday. Revenues were 4% lower at £18.7m. Growth in automated business revenues partly offset lower licensing revenues. Pre-tax profit excluding restructuring costs fell from £1.77m to £1.11m. Net cash is £28.3m. The average number of assays per instrument has increased from 3.8 to 4.3. Reg Duval stepped down as chief executive at the end of October after seven months in the job. Jaap Stuut took over the role. He talks about improving the sales team.
Sutton Harbour (SUH) has agreed a 29.5p a share bid for 70% of the shares of the harbour operator and property developer from FB Investors. That will cost £19.9m. A shareholder can accept for more than 70% of their shareholding but they could be scaled back. FB Investors is subscribing £2.75m for new shares at the same price.
Boku Inc (BOKU) had a successful first week on AIM with the share price rising from the 59p placing price to 81p. That values the developer of technology enabling payments via mobile at around £170m.
Contact centre services software provider Netcall (NET) says the integration of the MatsSoft acquisition is progressing well and trading is strong in the first four months of the financial year. The dividend will return to a normal level this year having been enhanced in the past few years. This year’s dividend is expected to be 1.2p a share.
Angle (AGL) is included in a €6.3m study to develop liquid biopsy services that is being headed by Philips. This is a four year research project.
Jon Fenton has stepped down as chief executive of Van Elle Holdings (VANL) ahead of a requisitioned general meeting on 15 December.
Amiad Water Systems (AFS) has been granted a licence by Dow Technologies to use its TEQUATIC PLUS filter. Amiad will take over the manufacturing of the product and pay Dow 3.75% of revenues generated.
First Property Group (FPO) has already invested £51m for the new Fprop Office LLP but there is more than £200m more to invest. Annualised management fees are £2.64m and full investment of the new vehicle will significantly increase that figure.
Audio equipment supplier Focusrite (TUNE) increased its full year pre-tax profit by one-third to £9.5m. There was particularly strong growth in the US.
Cambria Automobiles (CAMB) managed to edge up its pre-tax profit last year even though trading becoming tougher in the second half. The motor dealer is expected to report a lower profit of £9.5m this year but it has a strong balance sheet and it is investing heavily in new sites for upmarket brands that will not fully contribute until next year.
Premier African Minerals (PREM) raised £1m via PrimaryBid at 0.4p a share, which was double the amount it was originally asking for. The cash will be used to develop mining projects in Zimbabwe and Benin.
Professional services provider Progility (PGY) put out its full year figures late on Friday. There was still time for the share price to fall by 0.2p to 1.25p. Progility did move back into profit in the period but it was a modest one. There was a warning that progress may be held back this year by operational efficiency improvements.
TechFinancials Inc (TECH) is selling non-core businesses for $400,000 and reinvesting the cash in the development of technology to integrate blockchain-based currencies into its systems.
African Alliance is planning to invest £2.4m at 11p a share coal bed methane projects developer Tlou Energy Ltd (TLOU) conditional on a listing on the Botswana Stock Exchange before the end of the year.
Thor Mining (THR) is making a $125,000 (£95,000) payment to Pacific Gold and Royalty Corporation in settlement for the $1.5m (£1.13m) payment that would have had to have been made when the Pilot Mountain tungsten project in Nevada comes into production. Thor is still fully funded well into 2019. Metal Tiger has taken its stake in Thor to 9.77% after exercising 16 million warrants.
MAIN MARKET
Cash shell Landscape Acquisition Holdings (LAHL) raised $500m at $10 a share but the share price fell below the placing price when dealings commenced. The focus is hospitality, land-based gaming and real estate businesses in North America and Europe.
Rockpool Acquisitions (ROC) has secured a potential reverse takeover target. It is lending an initial £543,000 to Northern Ireland-based renewable energy firm Greenview Gas and this will be used to buy two companies. The deal includes an option for Rockpool to acquire Greenview paid for by a share issue.
Creightons (CRL) increased its pre-tax profit by one-fifth to £956,000, helped by an improvement in gross margin. An interim dividend of 0.15p a share is proposed.
IT services provider Triad Group (TRD) made further progress in the first half. In the six months to September 2017, revenues dipped from £14.8m to £14.2m, while pre-tax profit moved from £668,000 to £737,000. There is £2m in the bank. An interim dividend of 0.5p a share has been declared.
Andrew Hore
Quoted Micro 2 October 2017
NEX EXCHANGE
Newbury Racecourse (NYR) reported a slightly lower interim operating loss of £268,000 on revenues 10% higher at £7.04m. More racedays helped the racing operations but there were fewer other events which offset that. The nursery business made a much better contribution. Investment in the racecourse continues and income from residential property development of £1.95m helped to fund this. NAV is £44.1m.
Interim revenues were 22% ahead at £4.98m at Chapel Down (CDGP) helped by a 29% increase in wine sales. Management has reassured investors that there was a good harvest in 2017, which will help to improve wine revenues. The Curious Beer brewery is about to commence construction at Ashford.
St Mark Homes (SMAP) has launched a crowdfunding offer via Crowdstacker to raise up to £2m from a bond offering interest at 6% a year. The bonds can be held in ISAs. The cash will finance residential developments, which will predominantly focus on the government’s Help-to-Buy scheme. The company’s NAV per share was 136p at the end of the interim stage.
Block Energy (BLOK) is acquiring the 31% interest in the Norio field in the Republic of Georgia that it does not own and becoming operator of the field. The deal also includes 90% of the Satskhenisi field. The cost is $310,000 in cash. This is classed as a reverse takeover and trading in Block shares is suspended. An assessment of the reserve potential of the oil and gas assets in Georgia ahead of a return to NEX and a dual quotation on AIM.
V22 (V22O) increased its NAV from 1.55p a share to 3.94p a share in the 12 months to June 2017. That includes £235,000 of cash. If the art portfolio is included at its revalued level then the NAV goes up to 7.47p a share. An uplift in the value of the property portfolio offset an operating loss.
Investment company Western Selection (WESP) made a 2016-17 profit of £850,000 and nearly all of this came from the gain on the sale of shares in Swallowfield. Dividend income fell because Northbridge Industrial did not pay a dividend last year. NAV was one-fifth higher at 95p a share. The stake in Bilby was increased during the period. The total dividend has been raised from 2.1p a share to 2.2p a share.
Coinsilium Group Ltd (COIN) lost money in the first half of 2017 but it expects token investments to generate near-term revenues. There was £344,000 left in the bank at the end of June 2017 and this has subsequently been boosted by the sale of the shareholding in SatoshiPay. Coinsilium’s NAV is £2.34m.
Chris Bateman has resigned as chief executive of Forbes Ventures (FOR) after the sale of £500,000 of loan notes in Primus Care to his company Gravity Investment Group. Gravity has handed back 1166.7 million shares in Forbes, which have been cancelled. Gravity still owns 49.7% of Forbes, which still owns stakes in K&C REIT and challenger bank Civilised Investments. Trading in Forbes shares remains suspended ahead of the raising of further cash.
Ace Liberty & Stone (ALSP) has purchased Princes House, Barnstaple, which generates annual rent of £190,000, for £2.325m and College Square Margate, generating annual rent of £630,000, for £8.3m. Disposals of residential properties have raised £3.25m. Ace has raised £500,000 at 71.25p a share.
BWA Group (BWAP) had two investments and £17,000 in the bank at the end of April 2017. Pre-paid cards provider Prego Investments has taken longer to build up its business than expected. Mineralfields Group is in the process of obtaining mining licences in Cameroon.
Trading has commenced in Doriemus (DOR) shares on the ASX. A$3.5m was raised at A$0.26 per share equivalent. The cash will be used to complete drilling on the Lidsey and Brockham oil fields in the UK
Healthcare IT provider DXS International (DXSP) says that growth has been held back by changes in the NHS and the benefits of recent development spending are not likely to show through until 2018-19. In the year to April 2017, revenues were 5% higher at £3.43m but pre-tax profit fell from £46,000 to £39,000. There was £166,000 in the bank at the end of April 2017.
IMC Exploration Group (IMCP) has commenced its drilling programme on the zinc licence in south west Ireland. The licence in County Clare is near to other licences where mining companies have achieved encouraging results.
Angelfish Investments (ANGP) is providing a £150,000 loan facility to healthcare company Rapid Nutrition. The interest rate is 10% a year until the end of February 2018 when it rises to 15% a year. If Rapid Nutrition floats before the end of February 2018 the loan is convertible at 13.32p a share. The loan remains convertible after that but it also becomes repayable in instalments over 18 months. Angelfish is still seeking to recover transaction costs related the repaid investment in 4Navitas.
Crossword Cybersecurity (CCS) has licenced blockchain intellectual property to defence-focused ByzGen, which has just raised £500,000 from Regulatory Financial Services Ltd.
NQ Minerals (NQMI) has raised £782,000 at 8.5p a share and paid £400,000 of expenses via a share issue at 10p a share.
Via Developments (VIA1) has raised a further £215,000 from a debenture issue that takes the total value of debentures in issue to £5.11m.
Gunsynd (GUN) has invested £160,000 in a 3.01% stake in standard listed United Oil & Gas. The average cost was 2.7p a share. United has an onshore UK licence and an Italian onshore licence.
AIM
Premier African Minerals (PREM) is raising up to £3.5m at 0.3p a share with the help of PrimaryBid.com. The cash will go towards funding the underground development of the RHA tungsten mine and repaying and cancellation of the YA II loan agreement and D-Beta equity swap.
AP Systems Holdings says that it is considering a bid for RedstoneConnect (REDS). The underlying business of AP has been going since 1985 but AP Systems Holdings is a couple of years old and has only published accounts as a dormant company. The share capital was recently increased followed by a sub division of the shares. It appears that David Anderson still owns 100% of the group.
ITM Power (ITM) is raising £25m via a placing at 40p a share plus up to £4.4m from an open offer at the same price. ITM has £20m of projects under contract and £17m under negotiation. The cash will help to service these projects and finance the winning of additional contracts. The open offer closes on 17 October.
Recruitment software provider Dillistone (DSG) is launching its new software product and this has held back performance in the first half of 2017. The full benefits of the GatedTalent, which enables executives to share their personal information with recruitment consultants on a confidential basis, will not be seen for more than a year. House broker WH Ireland believes that full year profit could fall to £200,000 and it expects the 2018 profit to be flat. Profit is then expected to more than double I 2019 but the exact pace of take u of GatedTalent will be a significant factor in how quickly profit recovers.
Photonstar LED (PSL) significantly reduced its first half costs so even though revenues fell from £2.53m to £2.26m the interim loss decreased from £914,000 to £604,000. Research and development of the new LED systems range is almost complete and the second half sales should be better.
Full year figures from Real Good Food (RGD) show a slump into loss while net debt increased to £16.2m at the end of March 2017. There has been a subsequent refinancing and corporate governance is being improved.
MAIN MARKET
Curzon Energy (CZN) is joining the standard list following the acquisition of coalbed methane licences in Oregon. Curzon believes that gas could be produced before the end of the year. Curzon is raising £2.3m and this will be used to connect five existing wells to a pipeline and drill two more wells. The average cost is $350,000 per well.
Papillon Holdings (PPHP) had £9,000 left in the bank at the end of June 2017 following the costs of the abortive acquisition of Myclubbetting. Papillon has agreed heads of terms to acquire Phestor and Greenway Activated Carbon, which are involved in ultra-supercapacitor development for energy storage and supply of active carbon produced from biomass.
Associated British Engineering (ASBE) says that the level of enquiries for its products are increasing.
Andrew Hore
Quoted Micro 3 April 2017
NEX EXCHANGE
Hearing equipment supplier DHAIS (DHAP) has reduced the number of stores it operates and that is why its interim revenues fell by 18% to £4.16m but it did move back into profit before notional interest charges. The company continues to reduce its exposure to the mobility sector and concentrate on the supply of hearing aids.
Capital for Colleagues (CFCP) says that its NAV fell to £4.19m (43.5p a share) at the end of February 2016. The company plans to raise £2m at 42p a share.
Black Sea Property (BSP) has pulled out of the deal to acquire development land in Varna because it would not offer a suitable return even though the seller offered amended terms.
Etaireia Investments (ETIP) has completed the acquisition of the company that owns 89 Dalrymple Street, Girvan. The property was valued at £60,000 and the purchase price has been satisfied by £35,000 in cash and 25 million shares at 0.1p each. The cash payment is deferred for 12 months. A new tenant has signed a ten year lease at an initial rent of £12,000 a year.
Trading in the consolidated shares of Ace Liberty & Stone (ALSP) commences on 3 April. Twenty five shares have been consolidated into one new share.
Barney Battles has withdrawn his request for a general meeting at Milamber Ventures (MLVP).
AIM
Staunton Holdings says that it has no intention of increasing its 300p a share offer for FIH (FIH). Rival suitor Dolphin Fund says that it may be willing to offer 333.3p a share in cash but it still wants to discuss its plans with the independent directors.
Fairpoint (FRP) managed to make a small profit in the second half and full year profit was £4.9m, down from £10.5m in 2015. That is before £11.8m of restructuring charges and write-downs. Net debt was £19.9m at the end of 2016 and since then a medico-legal business has been sold for £1.2m. Bank facilities last until May 2019. There will be no dividend. Legal services revenues are expected to fall by 15% in 2017 and then start to recover in 2018. There will be £5m of annual cost savings showing through in the second half of 2017.
Premier African Minerals (PREM) successfully raised £2m at 0.5p a share via PrimaryBid.com. Premier directors Michael Foster and John Stalker have converted £30,000 of fees into six million shares at 0.5p each.
Connemara Mining Company (CON) has acquired five new prospecting licences in Ireland and two of the licences are in areas known for zinc-lead mineralisation – Tonduff and Derrykean. The licences are all north east of the Galmoy and Lisheen mines.
CloudCall (CALL) had 16,200 users by the end of 2016 and they are generating £31/month each. Revenues grew 48% to £3.3m but the operating loss increased from £3.7m to £4.5m. Recurring revenues continue to grow and February was the best ever month. There was £3.2m in the bank at the end of 2016.
Patient monitoring equipment supplier LiDCo (LID) reported full year figures in line with expectations but the next two financial years will provide indications of how well the company’s new strategy is working. The plan is to add high usage accounts in North America following the launch of a new monitor. There will be a significant increase in sales and marketing costs this year and the benefits will not show through until later in the year. This is why LiDCo is expected to slip back into loss before moving into profit in 2018-19.
Evgen Pharma (EVG) has been granted another patent relating to SFX-01. The patent “covers a method of isolation and stabilisation of sulforaphane from a natural source” and lasts until May 2033.
Savannah Resources (SAV) expects to start mining at its Oman copper projects before the end of this year. Ministerial approvals are still required to get a mining licence. Savannah has also established a resource of 4.4bt at a grade of 3.9% total heavy minerals at the Mutamba project in Mozambique.
MAIN MARKET
Path Investments (PATH) is the new name for former AIM company Niche Group. Path joined the standard list on 30 March and it raised £1.4m at 1p a share. The strategy is to acquire production and near-production assets in the oil and gas sector.
Bluebird Merchant Ventures (BMV) has turned its attention to South Korea. Southern Gold Australia has a number of tenements which have abandoned mines on them and there is scope to reopen them. Bluebird intends to earn 50% stakes in individual mines in return for the investment of $500,000. Two former mines have already been chosen – Taechang and Gubong. The plan is to prove resources and then move the mines towards production. Bluebird’s existing assets in the Philippines have been put on hold until the market is more favourable.
Dukemount Capital (DKE) joined the standard list on 29 March. The share price ended the week at 0.45p (0.4p/0.5p), which values the company at £1.5m. A dividend should be paid within two years and the target yield is 10%. Dukemount plans to do this by acquiring, developing and managing property assets. Dukemount will then create long-dated inflation-linked assets which will be attractive to institutional investors.
Stewart & Wight (STE) has bought a retail property in Middlesbrough for £620,000. A ten year lease was signed by HK Foods last September providing annual rent of £45,000. An upward only rent review is due after five years.
Andrew Hore
Quoted Micro 27 February 2017
NEX EXCHANGE
Capital for Colleagues (CFCP) says that one of its employee-owned investee business FJ Holdings has sold its businesses and been placed in administration. Capital for Colleagues had not been kept up to date with these moves. The loans to FJ and its subsidiary Ham Baker Adams plus the FJ share stake were valued at £1.3m at the end of November 2016, which included a £790,000 valuation for the share stake. That investment is equivalent to one-quarter of Capital for Colleagues’ NAV, suggesting a pro forma NAV of about 40.5p a share if the investment is completely written off. That is well below the current share price.
Ace Liberty & Stone (ALSP) says that the £3.55m sale of Hume House in Leeds announced in January 2016 has not been completed. Hume House was acquired for £1.67m in March 2014 and annual rental income is £188,000. Ace has raised £4.55m from the sale of Bridge House in Luton, which was acquired for £2.75m in November 2014, and been occupied by HM Revenue & Customs for more than three decades.
Middle East-focused investment vehicle Indigo Holdings (INGO) has made its first investment ten days after it joined NEX on 10 February. There was net cash of £818,000 at the time of flotation and €176,800 (£150,000) was spent on a 5% stake in Iranian car ride sharing app Carvanro. Indigo believes that the growing younger population in Iran will be receptive to the service. The app was launched in mid-2016 and registered users and completed rides are growing month-on-month.
Queros Capital Partners (QCP) has issued an additional £960,000 (£950,400 net) of 8% bonds 2025. That takes the bonds in issue to £2.625m. The cash will initially be used to provide bridging loans as Queros seeks to acquire social housing projects in the longer term. NQ Minerals (NQMI) has raised a further £82,000, having raised £128,750 at 0.8p a share last week. IMC Exploration (IMCP) has issued 2.5 million shares at 1p each to pay for professional fees and converted a Wilhan loan note into 3.2 million shares at 2p each. .
Peterhouse has replaced Grant Thornton as corporate adviser to Chinese medical products and services provider MiLOC Group (ML.P). Director Dennis Ow has satisfied a HK$500,000 loan by transferring 177,353 shares previously pledged as collateral, taking his stake to 0.44%.
Impact investing company Menhaden Capital (MHN) has decided to delist from the NEX Exchange Main Board in order to reduce costs but retain its premium listing on the London Stock Exchange.
AIM
Fishing tackle and products retailer Fishing Republic (FISH) is on course to increase pre-tax profit from £305,000 to £404,000 in 2016. Year-on-year revenues were 40% ahead, suggesting a figure of around £5.8m. A new store was opened in Mildenhall at the end of 2016 and another in Milton Keynes in January 2017. Two more, in Reading and Ipswich, are planned before the end of the fourth quarter. These stores will all be ready for the 2017 fishing season. Online sales have fallen but a greater proportion of them are direct through the company’s website which has improved gross margin. Last year’s share issue has diluted earnings per share but investing the cash in new stores will help to compensate for that. The 2016 figures will be published before the end of April.
Software robotics company Blue Prism (PRSM) says that its revenues were strong in the first quarter and it already expects full year revenues to be well ahead of expectations.
North Italy-based gas producer Saffron Energy (SRON) joined AIM on 24 January and ended the day at 7.38p. Saffron raised £2.5m at 5p a share. The cash will finance the development of three gas fields.
Gold recovery services and mining company Goldplat (GDP) increased its revenues in the first half even though gold sales were lower due to delays in selling gold from the Ghana plant, which did not get the required licence to sell the gold until the end of the period. The gold has been sold in the second half. First half revenues were still higher because of a 15% rise in the gold price achieved and currency movements. There was still £885,000 in the bank at the end of 2016. A full year pre-tax profit of £1.94m is forecast as the benefits from the investment in the Kilimapesa gold mine start to show through. Further capital investment will be required for the Kenyan mine and the gold recovery activities.
Conygar Investment Company (CIC) is selling its investment property portfolio to Regional Commercial Midco, which is owned by Regional REIT, for £129.8m – a few hundred thousand pounds ahead of its book valuation. Regional REIT will issue 26.3 million shares at 106.347p a share and assume bank debt and repayment of zero dividend preference shares. Shareholders will have to approve the transaction. Conygar will be able to focus on its development assets.
Vernalis (VER) made further progress in building sales of the Tuzistra cough treatment in the first few months of the cough season. In the six months to December 2016, revenues were one-third higher at £800,000 and the second half could be stronger. Growth in Tuzistra sales was not enough to offset declines elsewhere and total revenues fell from £6.1m to £5.6m. There could be two additional cough treatments on sale next year if the FDA approvals are achieved. Net cash was £74.2m at the end of 2016.
Security technology and services supplier Synectics (SNX) reported a 4% rise in revenues to £70.9m last year but higher margin gaming contracts meant that there was a sharp bounce back in profit. Net cash was £2.17m at the end of November 2016. This year’s underlying pre-tax profit is expected to grow from £2.6m to £3m, although this represents slower growth than originally expected.
Cairn is resigning as nominated adviser to CloudTag Inc (CTAG) on 10 April but the company has managed to raise £975,000 at 3.75p a share via Novum Securities at a cost of £58,500. Trading in the shares was subsequently suspended pending an announcement. CloudTag will need to find another nominated adviser to continue on AIM.
International benefits insurance provider GBGI Ltd (GBGI) joined AIM on 22 February when it was valued at £130.4m at 150p a share. The share price was unchanged at the end of the week. GBGI intends to pay a dividend equivalent to 60% of distributable profit.
Stellar Diamonds (STEL) is raising £324,500 from a placing at 5.5p a share and up to £250,000 from an open offer at the same price. Once the placing is completed the shares will return from suspension. The cash will help to pay creditors and be used to progress the Tonguma project in Sierra Leone. Further cash will be required.
Timber processing and renewable energy business Active Energy (AEG) is in discussions to acquire further timber assets in North America and Europe. AEG WoodFibre generated lower revenues in 2016 because of weak demand from MDF manufacturers in Turkey after the coup. A new softwood processing plant should be up and running in April. The CoalSwitch division will be the main focus of growth this year.
SigmaRoc (SRC) says that its maiden acquisition Ronez has been integrated more quickly than it expected. The new systems should be up and running by the end of April and the back office systems budget should be halved. January sales volumes were ahead of budget and the first quarter order book is strong for the Channel Islands-based construction materials supplier. SigmaRoc has secured a £2m revolving credit facility from Santander and a £18m term facility is being negotiated. These two facilities will last until 2021.
Northland has increased its profit forecasts for online gaming marketing business Veltyco Group (VLTY). The 2016 pre-tax profit estimate has been raised from €1.35m to €1.99m, which is in line with the recent trading statement. The 2017 profit forecast has been raised from €3.18m to €4.27m and for 2018 from €4.21m to €5.44m.
Savannah Resources (SAV) has raised £2.24m at 5.25p a share and it has letters of intent for a further £1.01m from the chairman and a major investor, Al Marjan, which will maintain its stake at 29.9%. Savannah has reduced its full year loss from £3.1m to £1.8m and there was £700,000 left in the bank at the end of 2016. This year Savannah expects to complete the scoping study for the Mutamba heavy mineral sands project in Mozambique, where it has signed a consortium agreement with Rio Tinto, and start mining copper in Oman. Savannah is also defining drill targets for Lithium in Finland.
Premier African Minerals (PREM) is on course to get production restarted at the RHA tungsten mine. Underground mining contract terms have been agreed with delivery of up to 16,000 tonnes of ore each month.
Edenville Energy (EDL) has raised £2m at 0.8p a share, with every two new shares eligible for a warrant exercisable at 1.08p a share over the next 18 months. The cash will be used to acquire capital equipment and finance other costs of developing the Rukwa coal project in Tanzania. Commercial mining should begin by the end of the first quarter of 2017. Edenville has relinquished its uranium prospecting licence to concentrate on Rukwa.
MAIN MARKET
Small company-focused investment company Athelney Trust (ATY) has increased its dividend by 8.8% to 8.6p a share, although NAV growth was more modest at 2.5%. Last year, Athelney did not do as well as AIM or the FTSE Fledgling index which each grew by around 15%. Athelney is more exposed to the commercial property market than AIM or the Fledgling index. Property shares were hit by the EU referendum and did not clawback their falls by the end of the year. Athelney takes a long-term view and it has still outperformed AIM since 2005. The focus remains companies that are steadily growing profitability and dividends. Realised capital gains were £294,000 in 2016, helped by takeovers of Premier Farnell, UK Mail and Wireless. A stake was acquired in Lavendon last year and that is being taken over. The NAV was 251.1p a share at the end of 2016. Having raised £407,000 at 233.2p a share last April, Athelney still had invested most of the cash and had £59,000 left in the bank – slightly higher than a year earlier. The NAV had slipped to 250.4p a share by the end of January.
Standard listed and TSX Venture Capital Market-quoted Zenith Energy (ZEN) is selling its operations in Argentina so that it can concentrate on its operations in Italy and Azerbaijan. Production was suspended in 2015 because a storage tank owned by the state oil company collapsed so oil could not be transported. The operations are being sold for a nominal sum because investment is required and the buyers are taking on environmental responsibilities.
Standard list shell Sealand Capital Galaxy Ltd (SCGL) is acquiring SecureCom Group for 10 million shares and £1m in cash. Sealand had £600,000 in cash at the end of June 2016 and it is raising a further £1.4m (1.27m net of expenses) at 20p a share. The November 2015 flotation price was 10p. SecureCom also brings cash with it and pro forma cash is £3.26m and there is subscription money owed to the company of £8.58m. The pro forma NAV is 3.87m because of the heavy losses incurred by SecureCom, which has spent large amounts on sales and marketing of its instant messaging and communications products n the Asia Pacific region.
Andrew Hore