Suspended Eurasia Mining is facing increasing financial difficulties, with its current working capital only sufficient to meet ongoing obligations until November 2024.

This limited financial runway has spurred Eurasia Mining to explore urgent funding options. The company said it is in advanced discussions with a lender regarding a trade finance loan facility. This potential facility aims to bridge any gap until the company can either sell its inventory of PGM concentrate or its assets.

Eurasia cautions that there is no guarantee this loan facility will be secured.

While Eurasia Mining expects to have additional sources of working capital, primarily from its stored inventory of PGM concentrates, the board of directors is prioritising the potential sale of the company’s assets as a solution to its financial challenges.

Fortunately for investors, Eurasia shares remain suspended pending the posting of the annual report, so any downside in shares resulting from the news will be avoided.

However, the company faces the risk of being delisted from AIM if the suspension continues for six months, as per AIM Rules.

The FTSE 100 started the bank holiday-shortened week on the front foot, with strength observed in the mining and commodity sectors, helping London’s leading index outperform Europe. 

After being closed on Monday, Tuesday is the first full session London has had to react to last week’s Jackson Hole Symposium and the confirmation that the Federal Reserve will begin cutting rates.

“The FTSE 100 got off to a strong post-Bank Holiday start, lifted by its healthy contingent of resources companies,” said AJ Bell investment director Russ Mould.

“Index heavyweights BP and Shell were higher as heightened tensions between Israel and Lebanese militant group Hezbollah, along with outages in Libya, saw oil prices surge back above $80 per barrel. Commodities traders will be watching closely to see if the apparent step back from the brink by both parties holds for now.

“This week is likely to be dominated by Nvidia results and a second estimate of US second-quarter GDP. Federal Reserve chair Jerome Powell’s virtual confirmation there will be a rate cut at the next meeting in September means the debate now is whether it will be a 25-basis point or 50-basis point cut.”

Notwithstanding anticipation around Nvidia’s results tomorrow, knowing the Fed will begin to ease borrowing costs has helped lift investor sentiment, and if we were to strip out tension around what Nvidia’s number may be, it’s likely the FTSE 100 would be higher on Tuesday.

Bunzl

Bunzl was the FTSE 100’s best performer, with a gain of 7% after the logistics group hiked its dividend by 10 amid steady profit growth.

“Distribution services may not be the most exciting sector that investors are initially drawn to but Bunzl seems to be making a habit of turning a profit and growing its dividend, which investors definitely do like to see,” said Adam Vettese, Market Analyst at investment platform eToro.

“The firm’s strategy of focusing on acquisitions continues to pay off with a profit upgrade after strong H1 performance this year. Bunzl manages to keep cash flow strong enough so that leverage is still under control when self-funding their acquisitions in order to add value to the business.”

Although Easyjet has been earmarked for a demotion to the FTSE 250, shares in the airliner rose 6% on Tuesday and were the second top riser.

JD Sports was the top faller as investors banked profits after a strong rally in recent weeks.

Tekcapital portfolio company Belluscura is now producing significant revenues with an attractive growth rate. Investors are evidently thrilled at the news, and shares in oxygen-concentrator producer Belluscura rose over 30% on Tuesday.

In addition to record revenues of $708k in July, Belluscura is on track to become EBITDA positive for Q1 FY2.

“Belluscura achieved record sales for the month of July with revenues of $708,000. This follows the previous monthly high set in June of $521,000. The Company expects strong sales to continue with the broader market acceptance of the X-PLOR® and the upcoming full release of its new patented DISCOV-R™ device,” the Belluscura Chairman said in its AGM statement.

The group said the early stages of its soft launch in the United States have been a big success, with every unit manufactured being sold. Belluscura said in a statement that they plan to push forward with the full US launch in mid-Q4.

Belluscura’s management team is evidently confident of the company’s growth prospects as they set revenue targets of $8 to $10 million for 2024 – major milestone for the company. In 2023, just $825,409 in revenue was generated.

In addition to remarkably strong revenue guidance for 2024, the company believes it will be at an annualised revenue run rate of $14 million to $16 million by the end of the year.

Belluscura announced game-changing approvals, contracts and orders last year. The revenue from these contracts is starting to be recognised in revenues and profits, and judging by the market reaction, some investors are convinced this will lead to shareholder value creation.

Belluscura was founded and listed on AIM by technology incubator and venture capitalist Tekcapital, which retains a stake in Belluscura. Should Belluscura meet its revenue forecasts, it will be a major validation of Tekapital’s ability to select technologies with a substantial market and commercial opportunity, and the potential to improve the lives of many people.

Tekcapital is the team was also behind one of AIM’s most successful IPOs of 2024, low-sodium food technology company MicroSalt. MicroSalt shares tripled in value after listing in London, before easing back.

It’s difficult to think of another company report that had the potential to have a more profound impact on the global equity market than Nvidia’s results due tomorrow.

Nvidia’s earnings are a direct barometer of the ongoing artificial intelligence boom, and its prominent position in the S&P 500 in terms of market cap means any volatility in NVDA shares tomorrow could send waves through global stocks.

After a 162% rally in 2024, Nvidia single-handedly has the potential to send global equities into the stratosphere tomorrow or bring them crashing back down to earth. Over five years, NVDA shares are over 2,900% higher.

Expectations are high going into tomorrow’s earnings results. And they have been for the last couple of quarters.

Nvidia is expected to report EPS of $0.65 and revenue of $28.7 billion, which would represent a 113% increase in revenue compared to the same period a year ago.

Market participants will be mindful that the rally after the flash crash early in August has taken Nvidia and other technology shares back to frothy valuations on an earnings basis.

Markets seem happy with Nvidia trading at 40x, 50x, and even 60x historical earnings, with the promise of higher earnings on the horizon. Investors’ focus tomorrow will almost exclusively be on the outlook and whether forward multiples are justified.

Should tomorrow’s report so much as hint at a slowdown in growth or show momentum is flattening out, it could be a blood bath for Nvidia, US tech, and the broader global equity complex. 

“The focus of this report will be less on the past quarter and more on the outlook, including how Nvidia will address the issues it’s facing,” said Sam North, Market Analyst at investment platform eToro.

The ramifications for other technology shares are huge. Nvidia’s supply chain includes many other global chip makers, and their results will directly affect the health of their peers.

In addition, the demand for chips and the ability to supply them will highlight the world’s appetite for AI and make the billions and billions being invested by the likes of Meta, Tesla, Google, and Microsoft look like a good idea or not. 

The volatility in NVDA shares immediately after earnings releases highlights Nvidia’s role in the world’s adoption of AI.

“Over the past eight quarters, Nvidia shares have closed higher six times. As we approach the upcoming release on Wednesday, options are pricing in a potential move of +/-10%, which aligns closely with the average move of 9% over the last eight quarters,” Sam North explained.

“Historically, Nvidia has averaged a 7.9% move in the week following its earnings report. While this doesn’t guarantee a positive outcome this time around, with shares trading just below their all-time highs, it’s not out of the question to anticipate a new record price if the company surpasses expectations again.”

Helium One shares tanked on Tuesday after the Tanzanian-focused helium explorer announced a placing and fresh update on its Itumbula West projects.

Shortly after Helium One shares touched their highest levels since March last week, the company conducted another placing raising at a 37% discount to the closing price of 1.74p per share on August 23, 2024.

A total of £6.43 million has been raised from a single institutional investor, Cynosure Capital PTY Ltd. Retail investors were not given the opportunity to participate in the round, which sent shares down by over 14%% in early trade on Tuesday.

The funds will be used to finance the acquisition of a 50% stake in the Galactica-Pegasus project located in Colorado.

The net proceeds from this subscription will be allocated to various aspects of the acquisition of Galactica-Pegasus. The largest portion, US$2.7 million, will be dedicated to funding six wells, with a cap of US$450,000 per well.

Additionally, $2.55 million will cover the company’s 50% participating interest share in tie-back, installation, and processing expenditures required for the Galactica Project’s development. The company will also allocate US$1.5 million to reimburse past costs incurred by Blue Star on the Galactica Project. The remaining $1.18 million will be used for associated fees, legal costs, working capital, and development contingencies.

Alongside the announcement of the dilutive share placing, Helium One provided an update on a well test at Itumbula West-1, which yielded interval flows of up to 7.6% helium.

“We are very pleased with these results from the EWT in the faulted Karoo interval. This is a globally unique helium play and it has taken a lot of hard work and collective effort across multiple disciplines to establish how this system works in the southern Rukwa Basin,” said CEO Lorna Blaisse, Chief Executive Officer.

We have gained a huge amount of information from this Karoo EWT and look forward to seeing what the fractured Basement EWT is going to yield. Once we have completed testing on this second interval, we plan to finalise our integrated subsurface modelling and resource estimates to complete our feasibility study.”