KEFI Minerals get subscription approval from ANS Mining

Ishen Patel
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KEFI Minerals get subscription approval from ANS Mining

KEFI Minerals plc (LON:KEFI) have told the market that they have seen approval for their Tulu Kapi subscription agreement in an update on Monday morning.

Partner firm, ANS Mining have given the go ahead for the subscription to take place and this has seen shares in green.

The Tulu Kapi project is based in Ethiopia with a Probable Ore Reserve of 1.0 million ounces and Mineral Resources totaling 1.7 million ounces.

KEFI said that the Ethiopia Government would be investing $20 million into this project, with ANS adding a substantial $38 million.

The firm said the company operating the project, Tulu Kapi Gold Mines Share Co, will now receive the first tranche of ANS Mining funding of $9.5 million.

“Kefi greatly appreciates the confidence and commitment demonstrated by ANS Mining, its board of Ethiopian business leaders and its underlying shareholders, which comprise a broad syndicate of strong organisations in the local banking, insurance and investment sectors,” the company said.

Executive Chair Harry Anagnostaras-Adams added: “I am delighted to confirm the signed subscriptions of ANS Mining into the project company. Whilst we have been working closely with ANS Mining for some time and developed an excellent relationship, I am now pleased to be able to welcome them formally as partners.

“Following first funds flow this month we will commence phase one of the community resettlement, trigger debt implementation and detail the final procurement and contractual arrangements with the principal project contractors. These are exciting times and I look forward to updating shareholders over the coming weeks and months as we move forward with the development of Tulu Kapi.”

The development of Tulu Kapi

At the end of November, KEFI were reportedly considering their finance options to fund their Tulu Kapi Project.

The firm said the company operating the project, Tulu Kapi Gold Mines Share Co, has recently been offered a bank-based project finance proposal, which would be an alternative to bond-based financing.

However, it seems that the combination of ANS and governmental funding has given KEFI exactly what they needed to get the operations up and running.

Harry Anagnostaras-Adams, executive chair of both KEFI and TKGM, said: “I am delighted the project has reached this stage, after so many delays and setbacks as the country and the sector were going through quite an amazing change. We have shared the frustrations of our shareholders and our partners, but I now believe the project has encouraging momentum.

“As first mover for modern mining in Ethiopia, we have done the heavy lifting with the authorities and the community and we can now all share the benefits as we advance. It is especially pleasing to see the strengthening of capital market interest and support from capital providers both inside and outside the Ethiopia for the project.”

Finally, the green light was officially given in the first week of December, which saw shares surge.

The firm said that the The first six months of work will be funded by project partners, including the Ethiopian government. KEFI would then plan to draw the bank loan mid-2020.

“We have been very well supported by the bond-lease proposal and now we also have an attractive bank-loan based alternative because capital market support for our project has recently improved markedly, both inside and outside Ethiopia,” said KEFI Finance Director John Leach.

“The expected savings from the preferred bank-based infrastructure finance proposal provide our project subsidiary, Tulu Kapi Gold Mines, with the opportunity to develop and further explore the underground Tulu Kapi deposit and significantly increase value for shareholders, without reducing net cash flows available for other purposes,” he added.

It seems that shareholders of KEFI should remain optimistic on the update provided today.

Share Price

Shares in KEFI trade at 1.57p (+13.60%). 6/12/19 10:47BST.

AstraZeneca receive green light on Lokelma and Farxiga

Ishen Patel
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1
AstraZeneca receive green light on Lokelma and Farxiga

AstraZeneca PLC (LON:AZN) have received a positive start to 2020, updating the market on two of its drug programs.

AstraZeneca said that the Lokelma drug has been approved in China for the treatment of hyperkalaemia and Farxiga granted a priority review by the US Food & Drug Administration.

Lokelma was approved by the National Medical Products Administration, based on positive results from the clinical trial program. The results showed that patients receiving the product experienced a sharp, sustained reduction of potassium in the blood.

Lokelma is used to treat conditions such as hyperkalaemia which is diagnosed by high level of potassium in the blood, which can lead to many other long term health complications.

Additionally, Farxiga had received the green light from the Food & Drug Administration in the United States.

The drug also granted the medication a priority review for reducing the risk of death in patients with heart conditions.

The new drug application was based on results from the phase III DAPA-HF trail publishing in September 2019, which demonstrated that Farxiga reduced the outcome of heart failure worsening, compared to placebo.

Astra Comments

“This approval marks an important milestone for more than two million patients in China who suffer from hyperkalaemia. Lokelma will offer the opportunity for patients and physicians to achieve long-term disease control and potentially reduce the risk of acute episodes, which can have serious, even life-threatening consequences,” said Mene Pangalos, executive vice president for Biopharmaceuticals R&D.

“Farxiga is well established in the treatment of type-2 diabetes and this Priority Review shows its potential to also impact millions of patients with heart failure. If approved, Farxiga will be the first and only medicine of its kind indicated to treat patients with heart failure,” Pangalos concluded.

AstraZeneca continue the good form into 2020

In December, Astra announced two updates which would have pleased shareholders.

Deepmatter Group PLC (LON:DMTR) saw their shares rally following a pharmaceutical technology collaboration with AstraZeneca. The firm joined forces with the FTSE 100 giant in a digital technology venture, designed to speed up the drug delivery process.

Additionally, the firm have continued their expansion into China. Astra told shareholders that they had joined forces with Merck & Co (NYSE:MRK) to receive marketing authorization from China’s National Medical Products Administration for their Lynparza drug.

As well as receiving the marketing approval, Astra also told shareholders that they had planned to create a both a research centre and am artificial intelligence innovation center both in Shanghai, and a “first-of-its-kind” healthcare industrial fund with China International Capital Corp Ltd (HKG:3908).

Shares in AstraZeneca trade at 7,572p. (-1.81%). 6/1/20 10:31BST.

Impact Investing vs ESG Investing

UK Investor Magazine
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Impact Investing vs ESG Investing
The propensity for investors to seek out investments that provide some good to the world is growing. The area of ethical and socially responsible investing isn’t new but it is enjoying a greater degree of interest and this article sets out to break down the key differences between two key areas; ESG and impact investing.

Environmental, Social and Governance (ESG) Investing

Environmental, Social and Governance (ESG) investing relates largely to the internal operations of a company and the nature of their products. The concept sets out to find companies that are acting in an ethical and responsible manner at board level which is then transfer throughout the organisation and into the wider business ecosystem. ESG Investing aims to seek out companies that are acting in a way deemed to be responsible and avoiding companies that are not. In its most simplest form ESG investing involves avoiding companies seen to be unethical such as tobacco, defence and alcohol shares. More advanced ESG Investing can include the adding of filters in a screening process that seek out companies taking care to ensure their business processes are highly ethical and that they operate in responsible supply chains.

Impact Investing

Impact Investing takes the concept of ESG Investing to the next stage by seeking out investments that are making a measurable positive impact and a financial return. The Global Impact Investing Network defines impact investments as ‘investments made with the intention to generate positive, measurable social and environmental impact alongside a financial return.’ Impact Investing differs from ESG Investing in as far as the external positive impact of the business is the key element of Impact Investing, as opposed to just ensuring internal processes are conducted ethically and responsibly. Impact Investing focuses on particular sectors in which an impact can be made, whereas ESG Investing can span most sectors and industries as long as the individual companies demonstrate ESG responsibility. Sectors receiving capital investment in the way of Impact Investments include renewable energy, housing, Microfinance, healthcare, education and recycling. What makes impact investing particularly interesting is the need for a measurable impact as an outcome of the investment. For example, the number of children educated by an investment in an African education solution provider or the amount of energy produced by a hydro electricity facility.
Due to the relative infancy of the industry, methods for measuring impact differ throughout the industry, with asset managers leading the way in developing and implementing measures.

Portfolio Construction

Looking at the portfolios of Impact Investing funds and comparing them to the portfolios of funds designated ESG, the difference between the two becomes more apparent through the types of companies included. ESG funds, that tend to include ‘Sustainable’ or ‘Responsible’ in their names, commonly have shares such as Microsoft, Apple, Procter & Gamble and Prudential in their top ten holdings. These shares are included not because they are setting out to tackle a particular problem, rather their business practises are deemed to be sustainable, ethical and responsible. Now compare this with funds designated as ‘impact’, you will see companies such as Rayonier, a sustainable timber company, and healthcare company Novo Nordisk, whose core business operations are focused on making a positive impact.

Impact Investing Guide

To learn more about Impact Investing, you can download a guide to Impact Investing here

Jub Capital seeks to scupper Anglo African Oil deal

Andrew Hore
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Jub Capital seeks to scupper Anglo African Oil deal

Jub Capital wants to scupper the sale of the Congo oil and gas interests of AIM-quoted Anglo African Oil and Gas (LON: AAOG) to Zenith Energy (LON: ZEN).
Jub does not want Anglo African to sell its interest in the Tilapia oilfield in the Republic of Congo to Zenith and agree a £500,000 facility from RiverFort. Instead it offers to provide additional funding for the company.
Jub was a major shareholder in Anglo African when it floated but it no longer has a declarable interest. Align Research, which has written research on the company is also behind the proposals.
Zenith deal
Zenith agreed to a...

ECO Animal adjusts expectations

Andrew Hore
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ECO Animal adjusts expectations

ECO Animal Health (LON: EAH) has slipped out its interim figures on New Year’s Eve as it continues to be hit by the African Swine Flu outbreak in China. The livestock drugs and treatments provider made less than one-quarter of the restated interim profit in the previous year and there is no interim dividend.
ECO had previously reported its interims in the first couple of weeks of December.
The pig sector is an important market for ECO’s drugs, although it is also involved in the poultry market. There had already been a warning about the continued volume impact of African Swine Flu in China, as...

FTSE 100 rises 12% in 2019 but underperforms US and European indices

UK Investor Magazine
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FTSE 100 rises 12% in 2019 but underperforms US and European indices
The FTSE 100 has closed 2019 up 12% following a Santa’s Rally through December. Despite posting a fairly respectable gain of 12%, the FTSE 100 lagged behind major indices in Europe and the United States. The German Dax rose 25% while the French CAC 40 added 26% in 2019. In the United States, where markets are set to close later tonight, the Dow Jones is on for a 22% gain while the market capitalisation-weighted S&P 500 is heading for a 28% gain. Factors such as a strengthening pound, uncertainty over Brexit and a disappointing years for oil companies BP and Shell, who account for a large proportion of the FTSE 100, can be attributed to the FTSE 100’s underperformance in 2019.

The Winners & Losers

Shaking off wider concern over the health of the high street, sportswear group JD Sports was 2019’s highest rising FTSE 100 share with a rise of 140%. Aveva plc, an Information Technology group specialising in Cloud, IoT, AI and Virtual Reality solutions, was the FTSE 100’s second highest riser posting gains of 91%. Both of the two top FTSE 100 risers had been promoted to the FTSE 100 from the FTSE 250 during 2019. It was a close race to the bottom of the pile with Centrica and NMC Health down 34% and 35% respectively. Centrica was set to take the crown of 2019’s worst performing share we it not for a short selling attack on NMC Health. Muddy Waters highlighted potential accounting irregularities at the middle eat focused health care group in late December which saw the group’s share price destroyed after which, up until that point, had been a relatively good year for them. Of course NMC Health and Centrica are the FTSE 100’s worst performers in 2019 because they remain in the index, companies such as easyJet, Hikma Pharmaceuticals an Wood Group had been relegated to the FTSE 250 early in the year after a period of share price pressure.

Cannabis investment vehicle Greencare joins NEX

Andrew Hore
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Cannabis investment vehicle Greencare joins NEX
Greencare Capital (LON: GRE) has joined the NEX Growth Market as part of its strategy to become a consolidator in the European market for cannabis-based products. Greencare has already identified its first investment and it could be secured in the near future. Greencare is capitalised at £3m at the subscription price of 25p a share. It could not have joined AIM as an investment vehicle because it did not raise enough cash, but NEX is a good market for Greencare because it already has cannabis-related investment companies and businesses. NEX can be a stepping-stone onto another European market. The board includes Guy Winterflood, who is chairman of Hempflax, which is one of the largest growers of hemp for industrial use.

Cannabis in Europe

European countries are at differing stages when it comes to legalisation of the use of cannabis. Italy legalised medicinal cannabis in 2013 and Germany did the same in 2017. Portugal legalised a range of medicines in 2018 and the Netherlands allows medicinal cannabis to obtained via prescription. The UK is starting to loosen the laws on medicinal cannabis and France is evaluating its position. Greencare intends to make acquisitions in countries where there is already well-developed legislation and regulation. It will assess opportunities in production, research and distribution in both cannabis and hemp sectors. It is not interested in recreational cannabis. That suggests that Italy and Germany are likely to be prime targets to provide a base for the business. UK-registered cannabis-related companies such as Greencare have to be careful that they are acting within the UK laws when acquiring and operating businesses even if they are not based in the UK. The initial focus is likely to be the wellbeing sector of the cannabis market. It is easier and more straightforward to launch products than it is for medicinal and pharmaceutical products. Longer-term, Greencare wants to have interests in a range of cannabis businesses,

Investments

The first investment is likely to be in a distribution business that has a leading position in one of the larger European market. The company has exclusive distribution activities covering 30,000 points of sale and that could increase to 45,000. This is a consumer-focused business. The plan is to acquire an initial 10% stake via share investment and convertible loans. Due diligence is being carried out and the investment could be made early in 2020. There are other smaller opportunities that are being assessed.

Cash

Greencare raised £514,000 at 25p a share. This equates to 17.1% of the company. The rest of the shares were issued at 1p each, raising £100,000. The pro forma NAV is just over 4p a share. The largest shareholder is E Value One with 66.3%. This company is owned by Dominic White. He is chief executive of AIM-quoted KCR Residential REIT (LON: KCR) and was chief executive of Energiser Investments (LON: ENGI). Dominic White is also chairman of fellow NEX company Eight Capital Partners (LON: ECP), which has a 21.2% stake. It acquired 1.5 million of its shares at 1p each and 1.06 million at the subscription price – just over 50% of the subscription shares. The original 1.5 million shares are part of a lock-in along with the E Value One stake and these shares will not be sold in the 12 months following the flotation. Anyone buying the other 1.06 million shares will have to hold them for the rest of the first 12 months. The total investment by Eight Capital Partners is £280,000 with an average cost of just over 11p a share. Eight Capital Partners also owns Epsion Capital, which is Greencare’s broker Greencare will have just over £500,000 in the bank after expenses. That will finance due diligence on the initial investment and other costs. All the shareholders and corporate adviser Cairn have warrants exercisable at the subscription price. That could raise an additional £450,000. Greencare’s main reason for joining NEX is to raise capital to expand and given the significant opportunities it has it will undoubtedly be issuing more shares for cash or to the sellers of the businesses it acquires. The market price is currently 25.5p (a bid/offer spread of 23p/28p). There have been no deals yet.

Five predictions for 2020

UK Investor Magazine
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Five predictions for 2020
GBP/USD hits 1.200 Having violently unwound the pre-election melt up in just a couple of trading sessions, we see GBP/USD continuing it’s decline through 2020. A combination of weaker UK data and flight to safety of the US dollar will be the biggest drivers, notwithstanding any unforeseen shocks from a disorderly Brexit. Gold rallies to $1800 2019 was a stellar year for gold and this is likely to continue into 2020 as geopolitical risk remains elevated. In addition, the Federal Reserve is considering letting inflation run past its 2% target rate and while Donald Trump is in power we’re unlikely to see any meaningful tightening cycle leading to a more subdued dollar. UK Small Caps outperform the FTSE 100 The FTSE 100 is very fairly priced going into 2020 and it’s hard to see a scenario where London’s leading index provides significant upside in 2020. By contrast, London’s small cap indices, including the AIM market, have been unloved for many years and there are numerous hidden gems presenting excellent value. Brent Oil price crashes to $45 Now the Saudi Aramco is out of the way, Saudi Arabia has less reason to keep oil prices high and OPEC are unlikely to implement much more in the way of supply cuts. The global economy is also set for slower growth in 2020, reducing demand for oil. Adding to downside pressure in the oil price is the march higher in US shale production which will likely see the US become a net exporter in 2020. Impact investing goes mainstream ESG is now fully embedded into the investor mind set at an institutional level but in 2020 we see this filtering down to the investment decisions of private investors in a big way. Impact investing is far more than allocating a portion of your portfolio to renewable energy projects. 2020 will see a major turning point in value creation by businesses actively making a positive impact towards the UN’s 17 Sustainable Development Goals.

OnTheMarket adds teclet lettings portal to services

Andrew Hore
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OnTheMarket adds teclet lettings portal to services

Estate agency portal operator OnTheMarket (LON:OTMP) is taking a 20% stake in property tech firm Glanty Ltd for £797,000.
Glanty has developed teclet, an automated portal for the lettings sector. This should help lettings agents to be more efficient and comply with regulatory requirements, as well as providing access to relevant documentation for all parties. The plan is to offer the teclet portal to OnTheMarket clients. This will provide OnTheMarket with an additional attraction compared with its rivals Rightmove and Zoopla.
Teclet has been on the market since 2016. It generates revenues from...

Director of RIFT Research and Development comments on Queen’s Speech

Dina Caruso
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Director of RIFT Research and Development comments on Queen’s Speech
The Queen gave her speech yesterday in which the government revealed its plans for the year. It was announced in the speech that there will be an increase in tax credits available to companies through the Research and Development scheme. Sarah Collins, Director of RIFT Research and Development Ltd, has provided a comment on the announcement. “We are delighted to hear Her Majesty specifically mention R&D Tax Credits in her speech this morning and that our new Government has committed to increasing R&D tax credits to help innovative businesses thrive,” the Director said. “Although the R&D tax credit regime is still lesser known than SEIS and EIS and Entrepreneur’s Tax Relief, it is a relief that benefits UK business to the tune of over four billion pounds each year and can be worth hundreds of thousands of pounds to those companies investing in tech, research and new ways of working. ” Sarah Collins continued. “At RIFT, we believe it’s important to help those operating within agriculture, fintech, construction, property, retail, insurance and start-ups generally, to receive some much needed financial help from the taxpayer in return for their forward thinking.” Sarah Collins added: “It’s fair to say that the starting pistol has been fired by Boris Johnson and if there was ever a doubt with regard to his previous ‘F*** business’ comments, he is clearly determined to reverse such an attitude. In fact, it would seem he’s now more ‘for business’ than ‘f*** business’.” With last week’s general election out of the way, UK politics can turn its attention back to resolving the Brexit induced political and economic uncertainty to hit the nation. Elsewhere this week, the Bank of England decided to keep interest rates on hold at 0.75%. The President of Stenn Group provided a comment on the announcement, insisting that Boris Johnson’s win provides the nation with the “much-needed solidity” it has been craving.
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