Sovereign Metals sees low cost of graphite production

UK Investor Magazine
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Sovereign Metals sees low cost of graphite production

Titanium rutile and graphite miner Sovereign Metals has said they see future graphite flake production at the lower end of the cost curve.

Sovereign Metals has recently confirmed their Kasiya titanium rutile and graphite project in Malawi holds the world’s largest titanium rutile resource, and the second largest graphite flake resource.

Sovereign points to the high purity and highly crystalline characteristics of the graphite deposit, as well as potential production scale, as reason for the upbeat cost forecasts.

“Not only is Kasiya the world’s largest rutile deposit and one of the largest flake-graphite resources, but our latest graphite industry benchmarking also demonstrates the potential for Kasiya to be a globally dominant supplier and low-cost flake graphite producer at scale,” said Sovereign’s Managing Director, Dr Julian Stephens.

“Importantly, the very low graphite production costs at Kasiya should allow Sovereign to compete aggressively on price point across global graphite markets.”

The miner also highlighted the findings Independent Life Cycle Assessment Study and the strong ESG benefits of their process which could see their production which could have a “significantly lower carbon footprint than Chinese-produced natural graphite”.

Sovereign Metals notes that their Updated Scoping Study should be ready shortly following a bumper increase in the mineral resource estimate earlier this year.

Netcall shares jump after $19m contract win with S&P 500 company

Natasha Doris
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Netcall shares jump after $19m contract win with S&P 500 company

Netcall shares soared 27.6% to 82.9p in early morning trading on Friday, after the company reported a $19 million multi-year contract win for its Liberty platform with an unnamed S&P 500 international financial services firm with operations based across 120 countries.

Netcall confirmed an expected $19 million in revenue for the initial three-year cloud subscription, with the deal projected to generate similar margins to the company’s overall group margin.

The contract is set to provide a significant contribution to Netcall’s revenue and profits, with the board anticipating an adjusted EBITDA for FY 2023 to come in at significantly higher levels than its previous expectations.

The S&P 500 client reportedly selected Netcall’s low-code product, Liberty Create, along with its Liberty RPA offering, which were designed to build and deploy power business applications across its slate of international operations, in order to deliver optimal outcomes for customers and other stakeholders.

The new contract win follows a global framework agreement reported by the firm on 9 August 2021, and the launch of its initial applications going live in North America and Europe.

“This landmark contract demonstrates the quality of the Liberty platform and its ability to support the world’s largest companies in their digital transformation efforts,” said Netcall CEO Henrik Bang.

“Having successfully deployed initial applications in North America and Europe, the customer will now use Liberty low-code and RPA across its global operations.”

“As well as providing a significant increase in revenue and profits to the Group, the contract further strengthens Netcall’s presence in the financial services industry, marking another step forward in the evolution of the Company.”

GSK announces positive results in phase 3 RSV vaccine trial for older adults

Natasha Doris
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GSK announces positive results in phase 3 RSV vaccine trial for older adults

GSK shares were up 2.2% to 1,748.3p in early morning trading on Friday, after the pharmaceutical company announced positive results for its respiratory syncytial virus (RSV) vaccine candidate for older adults.

GSK’s AReSVi 006 phase three trial vaccine candidate was reportedly the first of its sort to display clinically meaningful efficacy in adults aged 60 or over, with the magnitude of effect displaying consistency across RSV A and B strains, key secondary endpoints and in participants aged 70 or above.

The RSV vaccine contains a recombinant subunit prefusion RSV F glycoprotein antigen combined with the firm’s proprietary AS01 adjuvant, which has been utilised in several of GSK’s established adjuvanted vaccines.

GSK said it aimed for the antigen and adjuvant combination to help overcome natural age-related decline in immunity that contributes to the challenge of shielding older adults from RSV disease.

The interim analysis was reviewed by an Independent Data Monitoring Committee, and the group commented that the primary endpoint was exceeded with no unforeseen safety concerns noted.

GSK confirmed it would kick off engagement with regulators immediately, with regulatory submissions anticipated in HY2 2022.

The findings from the trial are scheduled for presentation in a peer-reviewed publication and at a scientific meeting later this year.

The trial is set to continued evaluation of an annual revaccination schedule and longer-term protection across several seasons with a single dose of the RSV older adult vaccine candidate.

“These data suggest our RSV vaccine candidate offers exceptional protection for older adults from the serious consequences of RSV infection,” said GSK chief scientific officer and research and development president Dr Hal Barron.

“RSV remains one of the few major infectious diseases without a vaccine, and these data have the potential to meaningfully impact the treatment of RSV and may reduce the 360,000 hospitalisations and more than 24,000 deaths worldwide each year.”

“Given the importance of these data, we plan to engage with regulators immediately and anticipate regulatory submissions in the second half of 2022.”

AIM highlights: Northbridge Industrial hits highs as Altus Strategies enjoys higher royalty revenue

Andrew Hore
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AIM highlights: Northbridge Industrial hits highs as Altus Strategies enjoys higher royalty revenue

AIM-quoted Northbridge Industrial (LON: NBI), which is set to change its name to Crestchic. Trading at the core power reliability business is better than the recently upgraded expectations. Previously full year earnings of 12.1p a share were forecast. The share price rose 12.5p to 205p on Thursday. That is the highest the share price has been since 2015, helped by share buy backs. There is a strong pipeline for rental and sale of loadbank equipment. New depots are open in the US and Belgium. The enlarged manufacturing facility is being officially opened on 6 July. The disposal of the oil and gas tools business is near completion.

Minerals explorer Altus Strategies (LON: ALS) is seeing the benefits of its move into mining royalty investments. In the first quarter of 2022, it received $1.54m, up 24% on the previous quarter, for its royalty interest in the Caserones copper mine in Chile. Just as important was the increase in projected mine life from 17 to 28 years. The share price rose 3p to 48.5p.

India-based call centre operator iEnergizer Ltd (LON: IBPO) says that it is in talks with Mumbai-based BPEA Advisors Private Ltd concerning a potential bid as part of a strategic review by the AIM-quoted company. This sparked a 31p rise in the share price to 425p. iEnergizer is a highly cash generative business that has paid substantial dividends in recent years, including a special dividend of 49.4p a share at the beginning of 2021. The most recent interim dividend was increased from 5.72p a share to 8.1p a share. The forecast yield is 4.7%.

ITM Power drags clean energy shares

Andrew Hore
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ITM Power drags clean energy shares

ITM Power (LON: ITM) was the biggest faller on AIM yesterday, and it dragged down other fuel cell companies with it.

ITM says that its full year loss will be higher than expected and the cash burn was £52m -although there is still £364m in the bank. Revenues remain modest at £5.5m due to delayed deliveries of products.

The share price dived 52.6p to 236.2p. Even though the ITM share price has fallen by two-fifths since the beginning of the year, it is still one of AIM’s ten largest companies. AFC Energy (LON: AFC) fell 2.1p to 25.4p, while Ceres Power (LON: CWR) slumped 79.2p to 593.6p.

New Aquis admission: Psychedelic future for Psych Capital

Andrew Hore
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New Aquis admission: Psychedelic future for Psych Capital

Psych Capital is floating on Aquis so that it can take advantage of the opportunities in the fast-growing psychedelic medicines sector. There is increasing interest in treatments using psychedelics and thereby investment in this area. More than $2bn has been invested in psychedelic companies and there are 47 quoted companies around the world in the sector.
However, Psych Capital is focused on early-stage companies that it can help to grow by providing marketing services and data.
The investors taking shares in the placing are also being given existing shares. The board is confident that they a...

Peel Hunt shares fall on 33.5% revenue drop to £121m, 57% profit fall to £33.1m

Natasha Doris
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Peel Hunt shares fall on 33.5% revenue drop to £121m, 57% profit fall to £33.1m

Peel Hunt shares decreased 4.1% to 112.2p in late afternoon trading on Thursday following a 33.5% drop in FY 2022 revenue to £121 million against £196.9 million in FY 2021.

The company announced a 57% pre-tax profit fall to £33.1 million from £77 million, alongside a basic EPS of 21.1p compared to 47.8p the last year.

Peel Hunt confirmed a cash hit of 25.8% to £76.7 million compared to £103.4 million.

However, the firm noted a 106.8% growth in net assets to £100.1 million against £48.4 million.

Peel Hunt reported that all three of its business divisions continued to make progress, with investment banking achieving record results for its second consecutive year at a 32% revenue increase to £57.9 million. The sector executed 46 equity fundraises, with advisory revenue up 166% to £8.4 million as the department acted on 19% of announced UK mid-and-small-cap takeovers.

The group commented that its execution services business delivered revenue of £42.9 million in FY 2022 compared to £166.7 million in FY 2021, and its research and distribution results were resilient, however revenues slid to £30.2 million from £36.3 million year-on-year. The sector apparently gained substantial market share in institutional commissions across the term.

Peel Hunt added 19 new corporate clients to its portfolio, with an additional four added in the period since the close of FY 2021, which brought its complete number to 164 clients.

“Against this backdrop, our performance was resilient, with all three divisions continuing to make progress, demonstrating the benefit of our diversified business model,” said Peel Hunt CEO Steven Fine.

“We generated record Investment Banking revenue for the second consecutive year, continuing to grow our corporate client base while being more active than any other investment bank in UK ECM transactions.”

“Alongside this, both Execution Services and Research & Distribution delivered solid performances, as we continued to develop our trading technologies and to win market share in institutional commissions.”

Peel Hunt reported a final dividend of 3.1p, in line with the company’s dividend policy.

Water Intelligence revenue grows 44% to $54.5m

Natasha Doris
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Water Intelligence revenue grows 44% to $54.5m

Water Intelligence shares increased 4% to 739p in late afternoon trading on Thursday, after the group announced an annual revenue growth of 44% to $54.5 million in FY 2021 compared to $37.9 million in FY 2020.

The firm reported an adjusted EBITDA rise of 48% to $10.3 million from $7 million year-on-year, along with a statutory EBITDA increase of 72% to $11.4 million against $6.7 million.

Water Intelligence mentioned an adjusted pre-tax profit climb of 36% to $6.9 million compared to $5.1 million, and a statutory pre-tax profit surge of 80% to $7.6 million from $4.2 million.

The company also noted a strong balance sheet with adequate resources to carry out its growth plan, with $23.8 million in cash against $6.8 million the last year, net of bank debt of $15.5 million, with net of bank debt and deferred payments to franchisees of $1.8 million in cash.

It highlighted an adjusted EPS climb of 29% to 30.2c compared to 23.5c the year before, alongside a statutory EPS growth of 85% to 36.1c from 19.5c.

Water Intelligence successfully executed eight acquisitions, with five franchise, two bolt-on and one for technology.

The group also completed three financings, with two equity and £23.8 million added, and one bank debt with $3.2 million added.

The firm added 132 new workers to its headcount, including 73 technicians over the FY 2021.

“Despite Covid-19 disruptions, we delivered across the board in both 2020 and 2021 to deliver on our mission of building a world-class multinational growth company in an important space – water infrastructure,” said Water Intelligence executive chairman Dr. Patrick DeSouza.

“The marketplace now faces new challenges with inflation and labour retention layered on top of Covid-related issues.  We will step forward to meet these latest challenges as well.”

“Our management team has only gotten stronger during 2021 as we added senior leaders and have continued to add technicians to meet strong market demand for our services and products. With the support of our investors, we have a strong balance sheet enabling us to navigate confidently in the short, medium and long run.”

Water Intelligence commented that it was confident in further company development in FY 2022, and said it was well-placed to navigate inflationary challenges to meet market expectations for the term, with a strong Q1 reported already.

The company did not recommend a dividend for FY 2021, following its lack of dividend payout in FY 2020.

Oracle Power reports 90.4% gold recoveries within 72 hours from Northern Zone Gold Project

Natasha Doris
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Oracle Power reports 90.4% gold recoveries within 72 hours from Northern Zone Gold Project

Oracle Power shares were down 9.3% to 0.2p following the company’s reported positive metallurgical results from the first of three samples delivered from its 100% owned Northern Zone Gold Project in Western Australia, which indicated gold recoveries of 83.3% within six hours and up to 90.4% within 72 hours.

The Northern Zone is Oracle Power’s intrusion related gold system, and hosts wide gold mineralised felsic porphyry intrusions.

The mining firm announced that the metallurgical results would form the basis for moving forward with diamond and RC drilling to define a maiden inferred JORC resource, based on its previously reported Exploration Target of 200 to 250 mega-tonnes at 0.4 to 0.6 grams per tonnes in gold for 2.5 to 4.8 million ounces in gold.

Oracle Power confirmed its results included a composite sample based on strongly weathered felsic units with 30% quartz vein material, with a drill head grade at 0.9 grams per tonne in gold and very low copper content into solution.

“The positive metallurgy at Northern Zone is the next step for the Company to move the project forwards,” said Oracle CEO Naheed Memon.

“We have defined a large exploration target of 2.5 to 4.8Moz gold, and with the widths of mineralisation intersected in this and historical drill programmes, and now with an understanding of potential recovery, around 90%, this ensures we are in a strong position to move to the next step of increasing confidence in the tonnes and grade of the gold deposit.” 

“Northern Zone is now a priority for the Company and the main focus of our activities in Australia. In line with this, our exploration teams will increase efforts on Northern Zone, moving from Jundee East, which has not returned the results required to warrant further work at the moment.”

ECB points to interest rate hike in July, announces end to net asset purchases

Natasha Doris
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0
ECB points to interest rate hike in July, announces end to net asset purchases

The European Central Bank (ECB) sent a wave of relief across the markets, after the institution announced it would be raising interest rates for the first time in 11 years, with a 25 basis points hike scheduled for its July meeting after maintaining current rates throughout June.

The interest rates increase is set to kick off after the ECB formally ends its purchases of net assets on 1 July this year.

The ECB confirmed that the governing council intended to continue reinvesting in the principal payments from maturing securities purchased under the APP for an extended term beyond the date when it begins to raise the key ECB interest rates, and for as long as required to maintain decent liquidity conditions and the requisite monetary policy stance.

The Bank is set to keep interest rates for June on deposit facility, main refinancing operations and marginal lending facility at minus 0.5%, 0% and 0.25%, respectively.

The ECB also downgraded its growth forecast, with the Eurozone currently facing record levels of inflation at 8.1% at the close of May, four-times its target level, linked to soaring food and energy crisis as a result of the Ukraine conflict.

Inflation is currently projected at 6.8% for 2022, with a decrease to 3.5% in 2023 and a drop to 2.1% in 2024.

Meanwhile, the Eurosystem is expected to see an annual real GDP growth at 2.8% in 2022, followed by a 2.1% rise in 2023 and a 2.1% increase in 2024.

The organisation indicated an additional interest rates hike at its meeting in September, however it mentioned that the level of its increase depended on the trajectory of the medium-term inflation projections.

“Beyond September, based on its current assessment, the Governing Council anticipates that a gradual but sustained path of further increases in interest rates will be appropriate,” the ECB said in a statement.

“In line with the Governing Council’s commitment to its 2% medium-term target, the pace at which the Governing Council adjusts its monetary policy will depend on the incoming data and how it assesses inflation to develop in the medium term.”

Analysts pointed out the positive reaction the ECB confirmation sparked in the markets, with its decision to keep rates at their current level met with an uptick in optimism going forward in 2022.

“With inflation in the eurozone more than 4 times higher than the 2% target it was no surprise to see the ECB maintain their key rates at current levels at their meeting today,” said ZEDRA global head of Fiduciary Investment Services Toby Sturgeon.

“Markets reacted positively with the Euro appreciating in the immediate aftermath of the decision.”

“The focus was more on the on the potential for future rate hikes rather than today’s news as it looks increasingly likely that July will see a 25bp increase in base rates with the potential for 2 two further 25 bp increases at future meetings.”

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