Power Metal Resources believes the sector could be on the verge of a dramatic change in fortune

Robert Jackman
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Power Metal Resources believes the sector could be on the verge of a dramatic change in fortune

In a year of widespread market volatility, mining stocks have proved a useful haven for many retail investors.

But while the commodities rush has revived the fortunes of established players, many juniors are still waiting for take off – with most share prices down YTD.

Yet for one CEO of an AIM-listed company, the case for investing in junior miners has rarely been stronger.

As a former non-executive director of Greatland Gold and now CEO of Power Metal (LON: POW), Paul Johnson believes the sector could be on the verge of a dramatic change in fortune.

With major miners narrowing their exploration pipelines in recent years, he says, it is juniors like Power Metal who will play a vital role in helping the world meet future metals demand.

For many industry-watchers, it’s a familiar story – with boardroom pressures and ESG concerns raising the stakes (at least for major miners) when it comes to mineral exploration.

Tougher investor expectations have played a role too: with industry experts saying that backers now expect a 15 per cent rate of return.

For Johnson, the situation has strengthened the case for collaboration between majors and juniors – with the latter being much better placed to take on the risk of new exploration.

Listed on AIM since 2012, Power Metal currently has active projects in Australia, Botswana, Canada, Tanzania and the US.

One of their flagship projects includes Pilot Mountain, located in mining friendly Nevada, where recent work established a large tungsten Mineral Resource Estimate with significant silver, copper and zinc credits.

Despite tungsten being classified as a strategic mineral, the US currently has no domestic production, leaving it dependent on Chinese supplies.

The company is also exploring for uranium in Canada’s Athabasca Basin and (via an external investment) in Australia’s mineral-rich Northern Territory.

Like others, Johnson remains bullish on uranium, pointing to the fact that three of the world’s largest electricity markets (including France and the UK) are looking to expand their nuclear power outputs.

Power Metal’s recent commodity report cites industry estimates that current production of uranium accounts for less than three-quarters of the demand from existing nuclear reactors.

With the World Nuclear Association estimating that demand could rise an additional 80 per cent by 2040, Johnson predicts the market will quickly become even tighter.

Should its exploration prove successful, the company will look to capture the value for shareholders by spinning out projects via an IPO or selling the rights to a larger player.

It is this strategic outlook, alongside a varied exploration profile, that Johnson hopes will make Power Metal a tempting prospect for investors.

Apax Global Alpha NAV return falls in HY1

Natasha Doris
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Apax Global Alpha NAV return falls in HY1

Apax Global Alpha shares fell 0.6% to 187p in early morning trading on Friday after the group announced a total adjusted NAV slide to €1.4 billion against €1.5 billion in the last year.

The firm noted weak public equity markets affected the valuation of its publicly listed holdings, which reflect residual stakes in previously IPO’d companies.

Apax Global Alpha reported £1.2 billion adjusted NAV, alongside a £2.44 adjusted NAV per share in HY1.

The company highlighted a private equity portfolio Total Return of negative 5.7% across the HY1 2022 period.

Meanwhile, Apax Global Alpha mentioned a total NAV return of negative 3.5% over the financial term.

“In an environment of volatile markets and macro conditions impacted by inflationary pressures and geopolitical risks, the established Apax Funds’ strategy of “mining the hidden gems” has continued to deliver,” said Apax Global Alpha COO Ralf Gruss.

“As a result, AGA’s portfolio remains well positioned in the currently challenging market environment and to take advantage of opportunities for further value creation for shareholders.”

Apax Global Alpha recommended a dividend of 6p per share for HY1 2022.

Greatland Gold retains 30% Haverion ownership as Newcrest rejects additional 5% stake

Natasha Doris
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Greatland Gold retains 30% Haverion ownership as Newcrest rejects additional 5% stake

Greatland Gold shares fell 5.9% to 10.2p in early morning trading on Friday, after the mining company reported it had retained 30% ownership of the Haverion project following Newcrest’s decision to not buy an additional 5% interest in the joint-venture at the agreed price of $60 million.

Greatland Gold said it believed the decision would deliver “substantial” medium to long term value to the firm.

The company previously offered Newcrest a 5% stake for $85 million, which would have apparently produced a “financially compelling” outcome for Greatland shareholders.

The outcome reportedly concludes Newcrest’s joint-venture process for the 5% stake option.

“We are simply delighted that Greatland will retain its 30% interest in Havieron. This was the best possible outcome for the Company and its shareholders which delivers substantial medium to long term value,” said Greatland Gold managing director Shaun Day.

“Greatland had previously offered Newcrest significantly higher value to acquire a 5% stake from Newcrest which, in the opinion of the directors, still presented a financially compelling outcome to Greatland shareholders. Accordingly, today’s outcome is tremendous, particularly in the context of the ongoing potential of Havieron.”

“This outcome also concludes the JV process for Newcrest’s 5% option and aligns both Joint Venture parties to focus on developing Havieron and work towards first production without the distraction of the process. We respect the Newcrest decision, which as a global major with over 35-years of experience in the Paterson, is an excellent joint venture partner and provides Havieron the benefit of leveraging the existing infrastructure just down the road at Telfer.”

Newcrest updated mineral resource

Newcrest also released an updated mineral resource for Haverion, within 1% of the total gold metal content and within 3% total copper metal content of Greatland’s previously updated mineral resource.

“We welcome Newcrest’s update to the Havieron JORC resource today, which delivers around a 51% increase on their previous update. This update, with a December 2021 drill cut-off, is within around 1% for total gold metal content of Greatland’s independent update released on 3 March 2022,” said Day.

“This validation is a great credit to the quality of our technical team and their ability to deliver within compressed timeframes.”

Meanwhile, Greatland Gold added its drill programme at Haverion was “progressing at pace” with up to seven drill rigs in operation, as it continues to expand high grade extensions to the mineralisation in the Eastern Breccia, South East Crescent Zone and Northern Breccia.

Joules shares tumble as fashion company expects ‘significant loss’ in HY1

Natasha Doris
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Joules shares tumble as fashion company expects ‘significant loss’ in HY1

Joules shares tumbled 35.1% to 28.5p in early morning trading on Friday after the fashion group announced notably softened trading, with a “significant loss” expected in HY1 2022.

Warm weather impacted the retailer’s core categories, including demand for outerwear, rainwear, knitwear and wellies, alongside the loss of customer demand linked to the cost of living crisis.

Joules reported an 8% year-on-year drop in retail sales across the last 11 weeks.

The company highlighted a 10% growth in wholesale trading across FY 2022, despite US port delays.

However, Joules confirmed its gardening segment suffered lower trading due to the wider slowdown in the home and garden market.

Meanwhile, retail margins in the year-to-date slid 6% on the back of fewer full-price items on sale as the company utilised discount items to engage higher customer levels.

Joules said it expected partial recovery in the coming months as full-price autumn and winter clothing sales enter the trading landscape.

The fashion group reported an anticipated FY 2022 pre-tax loss “significantly below” current market expectations.

Next potential stake

Joules added it was still in discussions with FTSE 100 fashion giant Next concerning the adoption of its Total Platform services to support its long-term growth plans and a potential equity investment.

The firm caveated that there was “no certainty that these discussions will lead to any agreement.”

Joules said it would release further information on the possible partnership if and when available.

DP Poland fundraising

Andrew Hore
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DP Poland fundraising

Poland-based pizza stores operator DP Poland (LON: DPP) is raising £4.8m through placing and subscriptions at 8p a share. This month the share price has by around one-third to 8.85p.

Luxembourg-based family office investment company M&M Holdings is subscribing £2.6m for 31.875 million shares.

DP Poland raised £3m at 8p a share last November. DP Poland already has shareholder permission to issue the shares so no general meeting will be required.

The cash will be used to finance the growth of the chain in Poland. This could be through opening new stores of via bolt-on acquisitions. The store roll-out in Poland and the recently acquired Croatia franchise will be accelerated by at least four stores. Marketing spending will also be increased. The Dominium by Domino’s brand is being discontinued.

Newly opened stores in Poland are trading strongly. Prices have been increased to offset higher costs, which are also being held back by greater buying power. Tourist numbers are still below previous levels. A third store was opened in Croatia in June.

Lloyds shares: is now a wise time to buy?

Natasha Doris
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Lloyds shares: is now a wise time to buy?

Lloyds shares are never absent from the blue chip spotlight, however the collective market magnifying glass has intensified this week on the release of the latest UK inflation data, which revealed the economy had hit the dreaded double-digits at 10.1% nationwide inflation.

Interest rates are currently at 1.75% and set to rise further, if the speed of UK inflation is anything to go by. While higher interest rates mean higher returns on loans for Lloyds, it also means a slowing housing market, spelling a potential stumbling block for the UK’s biggest mortgage lender.

Meanwhile, sky high inflation means Lloyds has had to set aside some finance to absorb the impact of bad debts as the cost of living bites and credit card borrowing hits surging heights.

However, Lloyds currently has a net interest margin of 2.66% and a projected net interest margin of over 2.8% in FY 2022, reflecting positive news for Lloyds share price as higher interest income bolsters the bank’s income statement.

Lloyds shares

Lloyds shares have fallen 4.5% year-to-date, highlighting a potentially attractive opportunity to snap up a household favourite share.

The banking giant offers an attractive yield of 4.4% and a strong dividend cover of 3.9, giving investors adequate confidence in Lloyds’ ability to pay out its dividend even factoring in potential market shocks.

On that point, the bank has an enviable CET1 ratio of 14.7%, signalling adequate security in case of a huge market crash.

However, Lloyds has a current PE ratio of 5.9 and a forward PE ratio of 6.4, suggesting analysts expect a drop in earnings in the coming months as the cost of living squeeze hits consumer pockets, and consequently Lloyds’ profit margins. Fewer houses bought, more loans defaulted on, and potential trouble for the company ahead.

Regardless, Lloyds shares have benefited from the bank’s strong results, alongside its generous share buyback schedule, including its £2 billion buyback launched on February 2022. Lloyds had completed £1.3 billion in share buybacks by 30 June this year.

The coming times ahead are unlikely to be comfortable for most companies going forward, and with a recession looming on the horizon, stocks big and small are set to take a hit.

Lloyds shares appear to be in a decent position to manage the market turbulence, however, and still look like a solid income choice for the close of summer.

US initial jobless claims fall to 250,000 as labour market remains tight

Natasha Doris
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US initial jobless claims fall to 250,000 as labour market remains tight

US initial jobless claims fell by 2,000 to reach 250,000 in the last week as the American labour market remained tight, marking the first dip in three weeks.

The figures from the previous week were revised down by 10,000 to 252,000 from a prior estimate of 262,000.

The US Labour Department confirmed a four-week moving average of 246,750, representing a decline of 2,750 from the last week’s revised average, while the previous week’s average was revised down by 2,500 to 249,500 against 252,000.

AI prospects for Intelligent Ultrasound

Andrew Hore
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AI prospects for Intelligent Ultrasound

The ultrasound trading operations of Intelligent Ultrasound (LON: IUG) had a strong first half and artificial intelligence (AI) revenues are starting to build. Longer-term, the AI operations will become increasingly important and provide a route to profitable growth.
Intelligent Ultrasound has developed and sells ultrasound simulation training equipment. This has been a steadily growing revenue generator for the company and it should continue to grow, but the rpid growth will come from AI.
There are two core ScanNav AI platforms: Assist for automated image analysis and Anatomy for automated an...

FTSE 100 flat as ‘big names’ trade ex-dividend

Natasha Doris
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FTSE 100 flat as ‘big names’ trade ex-dividend

A quiet Thursday saw the FTSE 100 trade sideways as investors appeared subdued following shocking inflation figures yesterday, which saw UK inflation hit the dreaded double-digit level at 10.1% in July.

Meanwhile, a slate of blue chip companies traded ex-dividend, sending Anglo American shares falling 2.4% to 2,893.7p, GSK dipping 0.3% to 1,410.2p and Aviva down 4.1% to 439.6p.

Additionally, M&G shares decreased 2.6% to 208.1p, Hikma Pharmaceuticals fell 3% to 1,444.5p and Legal & General slid 3.8% to 271.3p.

“After yesterday’s UK inflation figure shock, it’s no wonder investors weren’t feeling too hungry for equities on Thursday. European markets didn’t want to get out of bed, with minimal movements across the main indices,” said AJ Bell financial analyst Danni Hewson.

“The FTSE 100 was dragged down by some big names trading without the rights to their next dividend.”

Inflation sparks potential interest rates hike

Yesterday’s inflation data also sparked speculation that the Bank of England would move with more aggression in its next interest rates decision.

The UK economy reached double-digits far ahead of spring estimates, which reported estimates of the bone-chilling mark by October this year. However, recent revisions hiked inflation predictions to 13% by October, with a potential recession looming on the horizon.

Unlike the US, which reported lowered inflation of 8.5% from 9.1% the month before on lower energy expenses, the UK has shown no sign of prices slowing down, with energy prices yanking the cost of living higher for consumers going forward into a cold, harsh winter.

“The inflation reading will only add to conviction that the Bank of England will hike rates a further 50 basis points at the next opportunity – providing consumers with a double whammy of rising food and energy bills as well as higher mortgage costs,” said Hewson following the inflation figures on Wednesday.

AIM movers: Angling Direct second quarter decline and ex-dividends

Andrew Hore
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AIM movers: Angling Direct second quarter decline and ex-dividends

Fishing equipment retailer Angling Direct (LON: ANG) increased interim revenues by 1% to £38.9m, but they weakened in the second quarter and management says that full year revenues will be lower than previous guidance of £82m. That will lead to a sharp reduction in expected EBITDA to between £3m and £3.4m. In the six months to July 2022, retail store sales grew by 10%, but online revenues declined by 8%. That is not a surprise because there were restrictions in the comparative period. European sales are growing following the opening of a new distribution centre, though. The share price slumped 17.8% to 30p.

Touch sensors manufacturer Zytronic (LON: ZYT) says that orders have been hit by availability and cost of materials and electronic components. Full year revenues are expected to be around £12.3m, compared with previous expectations of £13.8m. Pre-tax profit was expected to more than double from £453,000 to £1m and it is still expected to increase, but it will be much lower than previously expected. There should still be £6m in cash at the end of September 2022. The share price fell 8.77% to 130p.

Eyewear and lens manufacturer Inspecs (LON: SPEC) moved back into profit in the first half of 2022, but it is cautious about its UK and European markets even though order books are ahead of last year. Revenues improved from $125.7m to $138.4m and the reported pre-tax profit is £800,000. European sales were ahead of budget in the first half, but Inspecs reports in US dollars and the decline in the Euro lowered reported sales. There was a 8.75% fall in the shares to 219p.

Shares in Bens Creek (LON: BEN) have fallen 5.22% to 31.75p, after the coal miner raised £6m at 30p a share. There are plans for the company to undertake its own mining instead of using a contractor and increase production. The cash will pay deposits on new equipment.

Agricultural products supplier and retailer Wynnstay Group (LON: WYN) raised £10.5m in a placing at 560p a share, which was above the minimum price indicated of 550p a share. The share price has fallen 4.52% to 592p. The plan is to redevelop the Calne feeds site that came with an acquisition earlier this year. This can be developed into a feed mill with a 185,000 metric tonne capacity that produces poultry and ruminant feed. There are also opportunities for further acquisitions.

Invinity Energy Systems (LON: IES) has delivered and installed a 1.8MWh VS3 flow battery system at the European Marine Energy Centre hydrogen R&D facility in the Orkney Islands. This has 48 VS3 battery modules, which should be enough to power more than 210 UK households. The system will be combined with tidal generation. The share price continued its upward trajectory, rising 17.6% to 53.5p.

Events agency Aeorema Communications (LON: AEO) says its profit will be higher than expected on more than doubled revenues in the year to June 2022. A loss of £160,000 last year will be turned into a pre-tax profit of at least £830,000 – £700,000 was previously expected. A new office has been opened in Amsterdam. The shares jumped 17.2% to 78.5p.

Shares in Empire Metals Ltd (LON: EEE) have risen 9.76% to 1.125p on the back of the airborne magnetic survey at the Pitfield copper gold project in Western Australia. A significant structure has been interpreted that aligns with the surface anomaly previously identified in the 1990s. This will help to target areas with the highest exploration potential. The detailed analysis will be received in the next few weeks.

Pantheon Resources (LON: PANR) has successfully drilled the horizontal section of the Alkaid #2 well in Alaska, with the lateral section extending 5,300 feet. The well is now ready for fracking. There could be an increase in the pre-drill oil in place and recoverable oil estimate. The shares are 5.86% higher at 134.65p.

Ex-dividends

Atalaya Mining (LON: ATYM) is paying a dividend of 3p a share and the share price is 1p lower at 239p.

Eneraqua Technologies (LON: ETP) is paying a maiden dividend of 1p a share and the share price rose 3p to 300p.

Jarvis Securities (LON: JIM) is paying a quarterly dividend of 3p a share and the share price fell 1p to 164p.

Mincon Group (LON: MCON) is paying an interim dividend of 1.05 eurocents and the share price is unchanged at 95p.

Rotala (LON: ROL) is paying an interim dividend of 0.5p a share and the share price and the share price is unchanged at 34.5p.

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