FTSE 100 boosted by UK and French elections

UK Investor Magazine
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FTSE 100 boosted by UK and French elections

The FTSE 100 traded higher on Monday as the combination of French election results and optimism around the UK elections later this week helped propel stocks higher

“The FTSE 100 started July on the front foot, lifted by property, energy and financial stocks,” said AJ Bell investment director Russ Mould.

“Elections dominate the agenda this week. Overnight results saw the far-right Rassemblement National (RN) take a significant lead in the first round of French parliamentary elections. However, the lead was somewhat lower than expected and there was something of a relief rally in the euro and French stocks.”

London’s leading index was 0.35% higher at the time of writing.

Uk-centric stocks were among the top risers on Monday as traders geared up for the UK elections by buying stocks well placed to enjoy a Labour government’s focus on growth.

Gains in retailers Kingfisher and JD Sports reflected optimism around the health of the UK consumer should Labour win later this week.

Keir Starmer has promised to build 1.5m homes over the parliament. Of course, no one believes Labour will achieve this target, but they are likely to oversee the construction of more homes than the Tories.

Hopes of a spurt in construction activity helped send house builders higher on Monday with Persimmon gaining 2% and newly promoted Vistry jumping 1.8%.

Land Securities joined the property-themed action with a 2.5% drive to the upside.

Anglo American shares fell 2.2% after the miner said a fire at one of its Australian coal mines is likely to curtail annual production targets.

“Anglo American shares were under pressure as the company had to suspend production at its Grosvenor steelmaking coal mine in Queensland after an underground fire,” Russ Mould said.

“Mercifully, no-one was hurt in the incident but, while operational issues in a hazardous activity like mining are not unusual, the early indications are the mine will not be back online for months so this is a serious issue for the group.”

Helium One Global gears up for extended well test at Tanzanian project

UK Investor Magazine
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Helium One Global gears up for extended well test at Tanzanian project

Helium One Global is preparing to commence an extended well test (EWT) at its Itumbula West-1 well in the Rukwa project area, the company said in an operational update on Monday.

The company plans to deepen the existing well and begin the EWT in July, marking a crucial phase in evaluating the commercial potential of its fault-fracture helium play.

Helium One Global shares were 5.90% higher at the time of writing.

The company-owned drilling rig is already on-site, awaiting third-party services to begin setup. Helium One have had problem with drill contractors in the past – using their own drill rig should help operations run a little smoother than previous campaign.

Helium One has bolstered its capabilities by acquiring well control equipment to complement the rig. An experienced drill crew has been appointed, with many returning from the previous drilling campaign, ensuring operational continuity and efficiency.

Helium One has a history of delayed drill programme that led to declines in the group’s shares so investors will be happy to hear, in preparation for the July spud date, long-lead items are arriving at the site, and camp personnel and medical support are being remobilised.

“As we fast approach the next operational phase, we are on track to commence the crucial EWT operations at Itumbula West-1 in July. This is a very exciting time for the Company as the test will enable us to determine commercial flow rates, reservoir performance and helium concentrations over a longer period of time. The results of this EWT will enable us to better determine resource estimates and fully evaluate the potential of this new fault-fracture helium play we have at Itumbula,” said Lorna Blaisse, Chief Executive Officer.

“The team has remained focused over the past few months to meet the timelines, including the ordering and delivery of long lead items, integrated subsurface modelling and engineering in order to form the basis of a feasibility study which will be required to apply for a Mining Licence to enable us to move into project development once the EWT is complete.”

The company has contracted global technology firm SLB (formerly Schlumberger) to provide cementing, drilling and completion fluids services, as well as surface well test equipment. GeoLog International BV will return to the project to provide mudlogging services.

The EWT is expected to last 4-6 weeks and will target two zones where helium was successfully sampled during the initial exploration well: the fractured Basement and faulted Karoo intervals. This test aims to determine commercial flow rates, reservoir performance, and helium concentrations over an extended period. A Production Logging Tool will be employed to gather more specific production data at predefined depths.

Laboratory results from helium samples taken from Itumbula West-1 have corroborated the measurements made by the onsite field PVT laboratory, adding confidence to the project’s potential. Additionally, the second phase of fieldwork for the Environmental and Social Impact Assessment study, required for the feasibility study, is ready to commence.

Mosman Oil & Gas – This Group’s Australian & US Helium Interests Are Getting Gassed Up, Shares Could Double 

Mark Watson-Mitchell
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Mosman Oil & Gas – This Group’s Australian & US Helium Interests Are Getting Gassed Up, Shares Could Double 

Late last week the shares of Mosman Oil & Gas (LON:MSMN) put on a 15% spurt in its ‘penny share’ price. 

Capitalised at just under £6m, the Australian-based company is looking very much more interesting of late. 

The Business 

It is a helium, hydrogen and hydrocarbon exploration, development and production company with projects in the US and Australia.  

Mosman has several projects in the US, in addition to exploration projects in the Amadeus Basin in Central Australia. 

Pivot Swing To Helium 

The company’s strategic objectives are to identify opportunities to provide operating cash flow and have development upside, while also progressing with exploration of existing exploration permits. 

It is now focusing on helium, hydrogen and hydrocarbon exploration development and production.  

The Amadeus Basin has some of the highest recorded % of helium and hydrogen anywhere in the world.  

It is one of the most prospective onshore areas in Australia for helium, hydrogen and hydrocarbons and has established infrastructure with production from Mereenie, Palm Valley and Dingo oil and gas fields. 

Analyst’s View 

Analyst David Mirzai at SP Angel considers that the company is currently pivoting its strategy to focus capital and management resources on its existing helium interests in Australia and recently acquired interests in the USA.  

He notes that Helium exploration activity on Mosman’s Australian assets is fully carried by its farm-in partners, while the recent US entry has modest near-term drilling costs funded by the proposed sale of the majority of the company’s US oil and gas production assets. 

Following a corporate review and refreshed executive, Mosman has acted to reposition the portfolio with a strategic focus on helium opportunities, where it has been able to leverage helium exploration expertise gained over several years in Australia to identify quality helium projects.  

The analyst states that: 

“In our view, Mosman is pursuing a differentiated strategy in building a portfolio of exploration opportunities in areas with proven high helium concentrations located in OECD countries with the necessary infrastructure.  

The company believes it is relatively undervalued compared to internationally listed helium peers, and with a more diverse prospect portfolio.” 

The Equity 

There are some 12.821m shares in issue. 

The larger holders include Hargreaves Lansdown (23.25%), Interactive Investor Services (20.83%), Barclays Direct (9.69%), Vidacos Nominees (8.80%), and HSDL Nominees (8.26%). 

My View 

At this stage, despite the shares having quadrupled in price this year, I am taking the view that its Management is right in concentrating on building up its helium projects, and that its shares are headed higher. 

The demand is growing and so too are the market prices for the gas. 

Following the disposal of its working interest in various Texas leases, the company will have released cash as working capital as well as giving its teams more ability to concentrate on the helium side. 

For risk-tolerant speculators, the shares could well prove to be a good one-year gamble from the current 0.046p, perhaps a doubling in price? 

Anglo American shares dip after fire halts operations at coal mine

UK Investor Magazine
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Anglo American shares dip after fire halts operations at coal mine

Anglo American shares dipped on Monday after the mining giant announced a fire at its Grosvenor steelmaking coal mine in Queensland, Australia.

The company was forced to suspend operations following an underground coal gas ignition incident on 29 June 2024. The mine is likely to be offline for an extended period which will raise concerns about production targets.

Anglo American shares started the session down about 4% before rallying steadily through the session to trade 1.9% down at the time of writing.

In the first half of 2024, the company anticipated producing approximately 8 million tonnes of product, with Grosvenor contributing a substantial 2.3 million tonnes to this total. The full-year production guidance for 2024 was set at 15 to 17 million tonnes, with Grosvenor expected to yield about 3.5 million tonnes.

These projections are now in jeopardy. The Grosvenor mine’s contribution was already expected to decrease in the second half of 2024 due to a planned longwall move. The current suspension, however, introduces a new level of uncertainty to the production outlook.

Porvair hit by short-term destocking

Andrew Hore
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Porvair hit by short-term destocking

Filtration technology supplier Porvair (LON: PRV) had a tough first half with destocking holding back progress. The outlook for the second half appears more positive although destocking is still ongoing.

In the six months to May 2024, revenues grew from £90.6m to £94.6m, but higher interest charges meant that underlying pre-tax profit fell from £11.8m to £11.5m. This includes an initial contribution from mist elimination filters producer European Filter Corporation (EFC) of £1m to operating profit and it accounted for the growth in revenues of the aerospace and industrial division.

There was a like-for-like decline in revenues in each of the three divisions. The largest decline was in the metal melt quality division where demand in the US was weak. There was higher demand for turbine blade filters.

The laboratory division had a contribution from last year’s acquisition, Ratiolab. The integration costs of this business held back margins and they should improve.

All three divisions should grow revenues in the second half. Peel Hunt expects an improvement in full year pre-tax profit from £21.4m to £22.5m.

The interim dividend was raised by 5% to 2.1p/share and the full year forecast is 6.3p/share. Net cash was £4.1m after the payment for EFC and it should recover to £10.4m by November 2024, down from £14m one year earlier.

Ben Stocks will be stepping down as chief executive next year and the process of appointing a replacement has commenced.

The underlying demand for the many of the company’s products remains strong, even though there are short-term weaknesses, with clean water and other clean technology areas propelling growth.

At 658p, the prospective multiple is just over 17. There is scope for further recovery in demand this year and next year.

AIM movers: Helium potential for Bluejay Mining and Karelian Diamond Resources cash

Andrew Hore
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AIM movers: Helium potential for Bluejay Mining and Karelian Diamond Resources cash

Bluejay Mining (LON: JAY) says there are indications of potential helium and hydrogen accumulations at the Outokumpu licences in Finland. There is up to 5.6% helium and 46% hydrogen, plus other gases. Seismic data has been acquired to identify high potential areas. Helium and hydrogen is the new focus of the company. The share price jumped 53.3% to 0.46p.

Linear generator technology developer Libertine Holdings (LON: LIB) has entered into a conditional subscription agreement with equity investors based in India and Dubai. This could raise £2m at 1.5p/share. This would involve the issue of shares equivalent to 49% of the enlarged share capital. This would provide funds for working capital until June 2025, but Libertine is not likely to breakeven in that time frame. The share price recovered 16.7% to 1.75p.

Echo Energy (LON: ECHO) has formed a joint venture in Peru covering gold and silver mining and the cleaning of tailings deposits. Mining revenues could commence before the end of the year. The initial production could be 147 ounces/month. The share price rose 9.68% to 0.0034p.

Feedback (LON: FDBK) has been awarded a contract by Queen Victoria Hospital NHS Foundation Trust for its Bleepa Community Diagnostics Centre service. This is worth £495,000 over an initial 12-month period. A trial showed cost and time savings. The share price increased 10.2% to 81p.

FALLERS

Karelian Diamond Resources (LON: KDR) has raised £329,000 at 1.5p/share. This cash will be invested in the nickel-copper-platinum prospecting licences in Northern Ireland. There will also be investment in diamond exploration in the Kuhmo region of Finland. This knocked 33.7% off the share price to 1.625p.

Armadale Capital (LON: ACP) published 2023 accounts on Friday evening, which meant that trading in the shares did not have to be suspended today. However, the share price slumped 31.8% to 0.375p. The developer of the graphite project in Tanzania made a loss of £5.89m, up from £206,000, after an impairment charge of £5.38m.

Sancus Lending (LON: LEND) published 2023 results showing a £4.8m provision against loans made by previous management. The pro forma loan book was £202m at the end of 2023. UK property loans more than halved during the period. Withdrawal from Guernsey and Gibraltar has been completed. Revenues in the first five months of 2024 were £6.3m. The share price is 22.2% lower at 0.175p.

Zanaga Iron Ore Company (LON: ZIOC) says the updated feasibility study of the Zanaga project will enable discussions with entities interested in participating in the project. Shard has asked for a waiver of share trading limitations so that it sell 14.4 million shares at 5.25p each. Glencore has subscribed £236,000 at the same share price and this is being used to pay down the loan from Glencore. The share price slipped 22% to 5.71p.

Anglesey Mining shares sink to multiyear lows after discounted placing

UK Investor Magazine
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Anglesey Mining shares sink to multiyear lows after discounted placing

Anglesey Mining shares hit multi-year lows on Friday after announcing a placing to develop their mining projects and covering general expenses.

Last week, the company raised £415,000 at an issue price of 1p, a 16% discount to the most the recent closing price at the time of the placing.

Anglesey Mining shares quickly traded below the 1p placing price on Friday and were again weaker on Monday.

The company said the funds would be allocated to the development of the Parys Mountain mine project, the advancement of the Grangesberg iron ore mine, and general working capital purposes. Some of the funds will also be used to pay down the company’s debt.

Last week’s placing follows two separate placings in 2023, which raised a total of £1.5m. The placing price was 1.5p for both of 2023’s subscriptions.

The market may fear such a small sum this time round amounts to nothing more than a sticking plaster, and the company will be back for more before long.

Chairman Andrew King subscribed for £20,000 new shares and CEO Rob Marsden‘s participation was limited to just £10,000. Rob Marsden now has a 0.27% stake in the firm.

Anglesey Mining’s share price has declined steadily since reaching highs in 2011 and is down 31% so far in 2024 and has halved since reaching YTD highs of 2p in January.

The decline in Anglesey Mining’s share has been recorded despite announcing strong drilling results from the Parys Mountain project in April. 

Innovative Eyewear tops US volume leaderboard again, surpasses Nvidia

UK Investor Magazine
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Innovative Eyewear tops US volume leaderboard again, surpasses Nvidia

Tekcapital’s Innovative Eyewear (NASDAQ:LUCY) jumped to the top of the US volume leaderboard again at the end of last week as a flurry of buying activity in the smart eyewear stole traders’ attention.

The company did not release any new news last week, suggesting that the move was a snowball effect sparked by a tick-up in buying activity, drawing more investors into the stock. 

Innovative Eyewear shares are no stranger to sharp inclines in volume. After news of the launch of its ChatGPT-enabled Eddie Bauer range, the stock rallied over 400% in just one day.

On Friday last week, LUCY shares surged to the top of the US volume leaderboard, trading 364m shares, considerably more than Nvidia, which traded 315m shares in second place.

Despite Innovative Eyewear not releasing any fresh news last week, the company has announced a flurry of developments so far in 2024. The combination of revenue growth, new products, and technological advancements represents a step change in the smart eyewear company’s trajectory and put the stocks at the top of many trader’s watchlists.

The company recorded higher revenue in Q4 2023 than in the preceding three quarter combined and the momentum continued into 2024 with Q1 revenue rising compared to the same period a year ago.

Investors will be looking forward to learning about the impact of the launches of Eddie Bauer and Nautica smart eyewear powered by Lucyd in upcoming earnings releases.

Innovative Eyewear will launch Reebok smart eyewear later this year. If the activity in LUCY shares around the launch of Eddie Bauer and Nautica can be used as a playbook for the market reaction around new product releases, the Reebok launch promises fireworks.

While the stock is becoming a day trader’s dream, the long-term fundamentals have improved substantially, and those in for the long haul will look forward to future earnings releases.

Aquis weekly movers: Voyager Life plans helium purchase

Andrew Hore
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Aquis weekly movers: Voyager Life plans helium purchase

Voyager Life (LON: VOY) has entered into an option to acquire M3 Helium Corp, which is a Kansas-based helium producer, for 57.6 million shares. Production is from one well and four other wells are being tested. There is also a processing plant. Voyager Life has raised £864,000 at 3p/share to finance the development of operations and fund the readmission document. M3 Helium is loss-making. The share price jumped 36.8% to 3.25p.

Ananda Developments (LON: ANA) announced promising results from cardiac fibrosis studies with CBD-based therapy MRX1. It has potential as a treatment for heart failure with preserved ejection fraction. It mitigates cardiac fibrosis and improves heart health. Next steps are being assessed. The share price improved 22.2% to 0.55p.

Tennyson Securities has published initial research on Good Life Plus (LON: GDLF) the prize-based draw lottery. Investment in the business means that it will continue to lose money for the next two years before moving into profit in 2026-27 when earnings of 0.7p/share are forecast. The 12-month target price is 4.24p/share.  The share price increased 20.7% to 1.75p.

Time to ACT (LON: TTA) subsidiary GreenSpur has received an award of £613,000 from the EU BEETHOVEN project for the development of advanced magnetic materials. This will be used for development of the rare earth-free magnet.  The share price rose 13.6% to 62.5p.

Valereum (LON: VLRM) reported a reduction in loss from £4.25m to £353,000. There was a swing from net liabilities of £758,000 to net assets of £351,000 following an increase in the value of the investment in Vinanz (LON: BTC). That was partly offset by an impairment charge on the GSX investment. The Valereum share price is 4.41% to 3.55p.

Brewer Adnams (LON: ADB) expects to conclude its evaluation of future funding later in the summer. The share price rose 2.38% to 2150p.

FALLERS

Startup Giants (LON: SUG) shares fell 95.9% to 3p prior to the ending of trading on 27 June.  

Housebuilder St Mark Homes (LON: SMAP) reported an increase in loss from £1.47m to £2.93m. Directors are halving their remuneration from the beginning of July. Because of the weakened financial position the board will ask shareholders at the AGM to agree to the departure from the Aquis Stock Exchange. The share price slumped 55% to 22.5p.

Food company Essentially Group (LON: ESSN) lost £960,000 on revenues of £1.59m in the 16 months to the end of 2023. There was £301,000 in the bank at the end of the year. The share price is one-fifth lower at 34p.

Ormonde Mining (LON: ORM) had net assets of €10.5m at the end of 2023, including €2.3m in cash. Management is evaluating investment opportunities. The share price declined 11.1% to 0.2p.

Wishbone Gold (LON: WSBN) reported an increase in cash outflow from operations from £787,000 to £1.62m. Cash fell below £6,000 at the end of 2023. A share issue at 1.2p/share and exercise of warrants raised £550,000 this year. The share price slipped 9.09% to 1p.

Phoenix Digital Assets (LON: PNIX) made a pre-tax profit of £20.1m in 2023 following a fair value gain of £25.3m. This is prior to the recent tender offer. The share price fell 7.59% to 3.65p.

Marula Mining (LON: MARU) believes that the Blesburg lithium and tantalum mine will generate positive cash flow in the second half of 2024. The company has confirmed delivery of manganese ore from the Larisoro manganese mine and they will increase in the second half. The share price dipped 6.35% to 7.375p.

SuperSeed Capital (LON: WWW) has issued 100,000 investor warrants exercisable at 120p/share to VSA Capital. The convertible loan notes will be redeemable on 21 June 2026 instead of September 2024. The share price slid 3.13% to 77.5p.

Invinity Energy Systems (LON: IES) increased revenues from £2.94m to £22m in 2023. The loss rose from £18.5m to £23.2m. The share price slipped 2.5% to 19.5p.

KR1 (LON: KR1) had net assets of 106.3p/share at the end of May 2024. The share price fell 1.47% to 67p.

AIM movers: SIMEC Atlantis Energy cash boost

Andrew Hore
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AIM movers: SIMEC Atlantis Energy cash boost

Renewable energy company SIMEC Atlantis Energy (LON: SAE) generated cash in 2023 due the sale of the Uskmouth energy storage project and ongoing revenues from MeyGen tidal project. Net debt was reduced from £54.1m to £50.6m, with the majority of debt in the MeyGen project, which is set to be expanded. Core company debt was £13.7m, before the subsequent receipt of £7m from a land sale. This puts the company in a strong position make further energy storage project investments. The share price soared 131% to 2.15p.

M Warner has increased his stake in Clontarf Energy (LON: CLON) from 3.13% to 5.98%. The share price rose 62.8% to 0.07p. This means the price has risen by one-third this year.

PI Industries has launched a 9p/share bid for Plant Health Care (LON: PHC) and this is recommended by the board. The bid values the natural crop enhancement products company at £32.8m. The share price jumped by 48.1% to 8.625p. PI is involved in all areas of the agricultural inputs sector in India, and it would be able to provide the finance and distribution to grow the Plant Health Care operations. PI wants to expand into areas such as the US and Brazil where Plant Health Care is already active.  

Mercantile Ports and Logistics (LON: MPL) has released 2023 figures slightly ahead of expectations. There was an impairment charge of £9.9m. The pre-tax loss fell from £12.1m to £11.4m. Debt restructuring discussions continue and this will firm up the financial position of the Indian port facility developer. An operating profit is forecast for 2024, but it would not be enough to generate a post-interest profit. Cavendish has a price target of 4.8p. The share price recovered 37.5% to 2.2p.

FALLERS

Mineral sands project developer Capital Metals (LON: CMET) says Sheffield Resources has placed on hold the transaction to acquire a 50% interest in the Eastern Minerals project in Sri Lanka. Sheffield Resources is prioritising the use of cash on another project. Capital Metals is assessing other sources of finance for the project if it retains a 100% stake. A low-cost drilling programme will be undertaken. The share price slumped 57.1% to 1.63p.

Pubs and bars operator Nightcap (LON: NGHT) has decided to cancel the AIM quotation because of the weak share price and the difficulty to raise additional funds. Trading is challenging and this is expected to continue for the rest of the year. EBITDA for the year to June 2024 is below expectations. Integrating The Piano Works has been more costly than anticipated. A general meeting will be held on 17 July but there is already sufficient support to pass the resolution to leave AIM. The quotation is likely to be cancelled on 29 July. A matched bargain facility will be provided by Asset Match. The share price is 52% lower at 1.8p.

Beacon Energy (LON: BCE) says that the stabilised rate for the Schwarzbach-2 sidetrack is in the range of 50-100 barrels/day, which is much lower than the 900 barrels/day expected. This could be due to reservoir damage in the higher reservoir or poor permeability in the lower reservoir. The expected level of production plus existing production could generate £2m-£3m in gross revenues. Costs are being reduced by more than £1m/year and two directors are leaving the board. The accounts will not be ready by 1 July so trading in the shares will be suspended. The share price declined 51.9% to 0.0065p.

Live Company Group (LON: LVCG) is continuing discussions with a cornerstone investor to provide cash required because of the shortfall at the Brick Live division. A KPOP event in Germany is being promoted alongside the cornerstone investor. The 2023 accounts will not be published by the end of June, so trading in the shares will be suspended 1 July. The share price dipped by two-fifths to 0.3p.

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