Great Southern Copper to conduct follow-up exploration at San Lorenzo project

Natasha Doris
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Great Southern Copper to conduct follow-up exploration at San Lorenzo project

Great Southern Copper shares were up 3.7% to 4.2p in early afternoon trading on Monday, after the company announced the identification of several shallow and buried targets for follow-up exploration at its San Lorenzo copper-gold project in Chile.

The mining firm issued its report following the processing and interpretation of its ground magnetic data for its coastal cordillera-based project, on the back of a completed 63.6 km ground magnetics survey, which was designed to enhance Great Southern Copper’s geological understanding of the operation.

The processing and interpretation of the data was carried out by Perth-based Australian company ExploreGeo.

Great Southern Copper confirmed that the data revealed additional structural detail and areas of magnetite-destructive alteration, along with highlighted areas indicating the presence of buried intrusives.

The feedback reportedly identified seven new areas of interest in the magnetic interpretation, which have been ranked for follow-up exploration work, alongside 13 near-surface anomalies, interpreted as possibly either zones of higher vein density or small intrusions.

The company further discovered potential zones of late magnetite destructive alteration throughout areas of lower magnetic response enveloping the inner calc-potassic alteration.

Great Southern Copper also highlighted a possible buried monzonitic intrusive that could represent the parent pluton to the series of mineralised monzonitic dykes and plugs mapped at the surface, with follow-up exploration in the area listed as a high priority due to the relation between the monzonite intrusions and mineralisation noted in other sections of the project.

“The results from the recent ground magnetic survey identified multiple new targets worthy of further exploration and enhances our geological understanding of the San Lorenzo project,” said Great Southern Copper CEO Sam Garrett.

“With ground-truthing of the anomalies and interpretation underway by our team on site, plans are progressing well for the company’s first reconnaissance exploration drilling programme at San Lorenzo.”

“Negotiations with drilling contractors are underway to secure rig availability and we hope to be mobilising a rig to site before the end of June 2022.”

FTSE 100 pulled up by stronger commodity prices

Natasha Doris
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FTSE 100 pulled up by stronger commodity prices

The FTSE 100 was up 1% to 7,466.3 in midday trading on Monday, as investors moved into commodities stocks to shore up against rising inflation and recent inflation tech-heavy US market.

Optimism in Europe spilled over into US futures on Monday as indices bounced back from another week of losses last week.

“US indices clocked up their seventh week of losses in a row on Friday and the jitters around tech companies continued on Chinese markets with the Hang Seng sliding,” said Hargreaves Lansdown senior investment and markets analyst Susannah Streeter.

The cutting of a key interest rates by the People’s Bank of China failed to assuage concerns, as the initial relief last week diminished.

However, the slight easing of Shanghai restrictions gave way to some optimism, as the price of Brent Crude rose to $114 per barrel and families across the Atlantic geared up for summer holiday season.

“The benchmark Brent Crude rose 1% as supply concerns resurface particularly given the US traditional ‘driving season’ approaches, when families in thirsty pick-ups and saloons get onto the roads for holidays,” said Streeter.

Indeed, Shell and BP saw their shares gain on the market with a 1.8% uptick to 2,380p and a 2.4% rise to 427.2p, respectively.

Kingfisher rose 2.7% to 253.6p following its reported 16.2% increase in like-for-like sales compared to pre-Covid rates, alongside the launch of a £300 million share buyback programme scheduled to launch soon.

“Sales are proving more resilient than some might have feared. This suggests there is still some pent-up demand for home improvement despite the pressures on household budgets,” said AJ Bell investment director Russ Mould.

“Kingfisher has also benefited from market share gains as weaker rivals have faltered and its scale and financial strength should stand it in good stead for what promises to be a tricky consumer backdrop.”

“[The] decision to spend another £300 million buying back shares demonstrates a measure of confidence in the future.”

High commodity prices pulled mining companies up the FTSE 100, with Anglo American rising 3.8% to 3,659p, Antofagasta gaining 1.1% to 1,438p, Croda growing 2.6% to 6,908p, Endeavor shares up 2.6% to 1,893p, Fresnillo increasing 1.2% to 794p and Glencore enjoying a 3% increase to 512.3p.

Meanwhile, consumer goods felt the high cost of living continue to bite chunks out of its market share, with Sainsbury’s, B&M and Tesco falling 1.1% to 230.1p, 0.9% to 418.6p and 0.7% to 258.4p, respectively, as food inflation set into consumer budgets.

“The consumer spending shock is still unfolding, and we could see more pain for corporates and individuals in the coming months,” said Mould.

“Markets always price in what they think could happen, but it feels like there could be more gloom ahead.”

“Corporate profit margins are being squeezed and that could lead to reduced business investment which in turn could hurt the economy.”

SDCL invests in Baseload Capital and Turntide

Natasha Doris
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1
SDCL invests in Baseload Capital and Turntide

SDCL shares gained 0.8% to 119.2p in late morning trading on Monday, after the energy trust reported a series of investments by its investment group SEEIT in Baseload Capital and Turntide in North America and Europe.

SEEIT announced a deal to finance a portfolio of geothermal projects owned by Baseload Capital Sweden through a €25 million senior debt facility, with a $10 million investment in the upcoming Series C round of financing for California-based sustainable technology company Turntide.

The firm also completed follow-on investments into its existing projects in support of the roll-out of new sites and further funding for construction.

SEEIT has reportedly invested £19 million into Onyx, Sparkfund, Tallaght, EVN and Biotown since 31 March 2022.

Baseload Capital

The company commented that its Baseload Capital investment would finance the capex of existing and pipeline projects, with an initial anticipated draw down of €6 million at closing to re-finance a slate of assets both operational and currently in development.

Baseload Capital operates small-scale geothermal projects which utilise geothermal and waste heat resources at a lower temperature and shallower depth than conventional geothermal ventures, which reduces costs.

The geothermal firm is currently developing projects in Iceland, Japan, the US and Taiwan, with its current portfolio based in Iceland, the US and Japan.

“Baseload Capital provides heat and power generated locally from geothermal sources and is a great example of high efficiency renewable district energy generation,” said SEEIT fund manager Purvi Sapre.

“Our investment generates income straight away and, as such, contributes to meeting both SEEIT’s yield and total return targets.”

Turntide

Turntide and SEEIT have reportedly signed a Term Sheet concerning the financing of a $100 million financing facility, which is set to see SEEIT finance the capex of future qualifying energy efficiency projects developed by Turntide, so the group can consequently deliver infrastructure as a service.

The firm currently manufactures energy-efficient motor systems that don’t require the use of rare earth minerals.

Turntide’s client base resides in the US, Canada, the UK and continental Europe, with the inclusion of several investment grade multinational companies.

SEEIT added that the financial agreement with Turntide aligned with its investment policy as part of its allocation of 3% of gross asset value to developers and operators of energy efficiency projects, on the basis of Turntide’s energy efficiency characteristics.

“SEEIT’s two new investments with Baseload Capital and Turntide will further diversify the portfolio by technology, industry and geography while also providing key infrastructure services in global efforts to achieve net zero,” said SDCL CEO Jonathan Maxwell.

“Turntide has the ability to achieve a significant reduction in global electricity consumption wasted by legacy electric motors in commercial buildings, agriculture and transport.”

“It is also well positioned to play an important role in the electrification of transport. SDCL considers the relationship with Turntide as an exciting long-term partnership and we look forward to working with them on many new projects in the coming years.”

Moonpig to acquire Buyagift for £124m

Natasha Doris
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Moonpig to acquire Buyagift for £124m

Moonpig shares were up 10.6% to 260p in early morning trading on Monday, following the bespoke card company’s proposal to acquire experience provider Buyagift for £124 million.

Moonpig commented that the acquisition would unlock the growing £6 billion UK gift experiences market, alongside its potential to leverage the firm’s bespoke gifting expertise to deliver highly relevant gift recommendations across a wide range of products.

The special occasion firm said it aimed to become the “ultimate gifting companion” with the proposed deal.

The company highlighted Buyagift’s impressive financial track record, including its 3.3 million customers across the group’s Buyagift and Red Letter Days brands, along with consistent double-digit revenue growth on compound annual growth rate over the last ten years, with an aim to grow to mid-teens over the medium term.

https://twitter.com/Independent/status/1528662673499557888

The card firm also drew attention to the company’s strong financial model, which reportedly boasted consistent revenue growth, high margins and robust cash generation.

Moonpig noted the cash consideration of £124 million against an unaudited FY 2022 EBITDA of £14 million for the firm, with a proposed 100% cash funded agreement through cash on balance sheet and a committed extension to Buyagift’s senior revolving credit facilities.

Moonpig further mentioned an adjusted EPS accretion over 20% in the first year of the acquisition, with an ROIC above WACC in the third year, alongside a net debt to adjusted EBITDA below 200% by April 2023.

“The proposed acquisition of Buyagift rapidly accelerates Moonpig Group’s journey to become the ultimate gifting companion,” said Moonpig CEO Nickyl Raithatha.

“There is strong strategic rationale for the transaction, and compelling financial benefits. Buyagift is profitable and highly cash generative, with a proven track record of strong growth and we are excited by the ways that we can further transform the business using the Group’s proven playbook.”

“We see significant potential for the cross-selling of gifting experiences to Moonpig Group’s loyal customers. We look forward to working with the Buyagift team to deliver an enhanced proposition for our customers and to create value for our shareholders.”

Kainos revenues grew 29% in FY 2022 to £302.6m

Natasha Doris
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0
Kainos revenues grew 29% in FY 2022 to £302.6m

Kainos shares were up 17.1% to 1,208.5p in early morning trading on Monday after the company reported a 29% increase in revenue to £302.6 million from £234.7 million over the last year, representing the group’s twelfth consecutive year of growth.

The IT firm announced an adjusted pre-tax profit growth of 3% to £58.8 million compared to £57.1 million, along with a statutory pre-tax profit fall of 9% to £46 million against £50.3 million.

Kainos highlighted a 35% growth in bookings to £349.8 million from £258.8 million year-on-year, and a period-end cash level of £76.6 million compared to £80.9 million, with cash conversion at 83% compared to 112% in 2021.

Revenue in the company’s digital services grew 24% to £199.8 million against £161.6 million, with a 45% rise in Workday Services revenue to £70.9 million compared to £49 million and a 32% uptick in Smart Test and Smart Audit product revenues to £31.9 against £24.2 million.

Meanwhile, the software group reported a customer approval rating of 98%, which remained flat year-on-year, alongside a 34% growth in customer figures to 731 compared to 546 the previous year.

“Our latest business results outline the consistency of our long-term performance, as we recorded our twelfth consecutive year of growth – in terms of people, customers, revenue and profitability,” said Kainos CEO Brendan Mooney.

“Over those twelve years, we have helped organisations drive their digital transformation programmes and realise their ambitions. That digitalisation trend gathered further pace during the pandemic as our customers responded to the changing ways of delivering essential services to citizens, patients, customers, and employees.” 

“Looking forward, we remain confident in our business as the demand for our services has never been higher, our reputation for delivery continues to flourish, while the scale and capability of our organisation continues to grow at pace.”

Kainos confirmed an adjusted diluted EPS rise of 4% to 38.1p from 36.8p and a total dividend per share drop of 21% to 22.2p compared to 28.2p.

Kingfisher LFL sales increase 16.2% compared to pre-Covid rates

Natasha Doris
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0
Kingfisher LFL sales increase 16.2% compared to pre-Covid rates

Kingfisher shares increased 2.3% to 252p in early morning trading on Monday following a reported 16.2% growth in like-for-like sales compared to pre-Covid-19 levels in its Q1 2022 trading update.

The DIY group confirmed sales in line with executive expectations of £3.2 billion for the term, however, like-for-like sales fell 5.4% and total sales in constant currency dropped 4.2%.

Kingfisher highlighted resilient demand in its DIY and DIFM/trade sectors, and noted that it continued to manage inflationary pressures moving into Q2 2022-2023.

The home-improvement company added that omni-channel engagement remained at a high rate, with a three-year e-commerce sales increase of 164%, reflecting 16% of group sales compared to a 7% coverage year-on-year.

“Kingfisher has delivered a good first quarter of trading, with LFL sales 16.2% ahead of our pre-pandemic performance,” said Kingfisher CEO Thierry Garnier.

“While facing very strong comparatives in the prior year, our continued strategic progress has enabled us to retain a significant proportion of the increased sales during the pandemic.”

B&Q and Screwfix

However, Kingfisher said its B&Q sales slid 17.8% in total, and dropped 18.3% in like-for-like sales due to the impact of storms in February, with like-for-like sales in weather-related categories falling 28% against the same period last year.

The firm commented that its Screwfix brand sales fell 7% overall, and slid 10.9% on a like-for-like basis. However, Kingfisher drew attention to its 13 Screwfix store openings in Q1 over the UK and Ireland, with an extra 80 stores set to open across the countries for the remainder of the financial year, alongside the launch of its first Screwfix stores in France in HY2 2022-2023.

Meanwhile, the store franchise saw a 59% increase in its Poland sales, with a 54.5% rise on a like-for-like basis, with strong performance across all categories and the launch of one big-box store over the term.

“Looking forward, we are reiterating our profit guidance for FY 22/23. We are focused on delivering on our strategic objectives and growth initiatives, including the growth of our scalable e-commerce marketplace, the expansion of Screwfix in the UK and France, new store openings in Poland, further increasing our trade customer base,” said Garnier.

FY 2022-2023

The firm reiterated its FY2022-2023 guidance with an estimated pre-tax profit of £770 million.

Kingfisher said it estimated broadly flat central costs year-on-year, alongside a capital expenditure gross capex target of 3.5% its total sales, which amounted to £397 million for FY 2021-2022.

The group confirmed that its priority remained top line growth and to target additional share gains in its market as it centred its focus on strategic objectives and investments for growth.

Kingfisher also noted a further £300 million of surplus capital through its share buyback programme after its closed £145 million shares repurchase in April, and confirmed the first tranche was scheduled to commence soon.

The company noted that its dividend policy target cover range was 2.25 to 2.75 times, based on adjusted basic earnings per share.

Chariot raises cash for Morocco gas project

Andrew Hore
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1
Chariot raises cash for Morocco gas project

Chariot Ltd (LON: CHAR) has raised £20.4m ($25.5m) at 18p a share and that should provide enough money to push forward with the Anchois gas development in Morocco and the renewables projects that are in process. There will be additional cash to come from an open offer.
An upgrade in net gas pay estimates for the Anchois-2 well pushed up the Chariot share price, enabling management to take advantage and raise this cash. The share price is at its highest level since 2018.
Management wants to move the Anchois forward as fast as possible so that cash can be generated from the initial well. A long-...

Restore acquisition prospects

Andrew Hore
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0
Restore acquisition prospects

Records management, technology and office relocation services provider Restore (LON: RST) is trading in line with expectations and it has flagged a strong pipeline of potential acquisitions.
In the four months to April 2022, revenues were 37% ahead, which included organic growth of 14%. That organic growth has particularly come from the digital and information management business. Increased office activity has led to a recovery in shredding business Datashred.
Restore is having to managing higher than expected cost increases but it has managed to offset these by raising prices and improving ef...

Next Fifteen’s surprise Saatchi bid

Andrew Hore
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0
Next Fifteen’s surprise Saatchi bid

Marketing services firm Next Fifteen Communications (LON:NFC) is making a recommended bid for fellow AIM-quoted advertising agency M&C Saatchi (LON: SAA) and rival bidder AdvancedAdvT (LON: ADVT) says that it will not increase its offer.
Saatchi has rejected the AdvancedAdvT bid. Next Fifteen is offering 0.1637 of one of its shares and 40p in cash for each Saatchi share. At a Next Fifteen share price of 1266p, the bid was valued at 247.2p a share. The share price has increased to 1294p, which makes the bid worth around 252p a share.
At an AdvancedAdvT share price of 87p, the all share bid ...

Alien Metals boasts multiple opportunities for value creation

UK Investor Magazine
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Alien Metals boasts multiple opportunities for value creation

Alien Metals is diversified metals explorer with projects across Australia, Mexico, and Greenland. Their broad portfolio of assets hold deposits of iron ore, platinum group metals (PGE), palladium, gold, copper and Zinc.

The nature of their portfolio means the company not only has exposure to battery metals and the growth in demand for EVs and renewable energy, but also the safe haven characteristics of gold, and silver’s manufacturing applications.

The Alien has recently acquiring the remaining stake in what is thought to be one of Australia’s largest platinum group metals (PGE) deposits and has enjoyed bumper results from scoping studies at the Hamersley Iron Ore project.

Having such a broad range of asset means there are plentiful opportunities to de-risk the portfolio and Alien may start to see revenue from production in the not too distant future.

Alien Metals is undertaking a series of concurrent studies across their portfolio of assets and promises a steady flow of market updates throughout 2022.

Alien Metals currently has a market cap of £28m which one may argue doesn’t fairly reflect the strength of their portfolio of assets, when compared to other junior miners of a similar valuation. Indeed, analysts at WH Ireland gave Alien Metals a 2.7p price target in April.

Alien Metals in Australia

In March 2022 Alien Metals deepened their exposure in Australia with the acquisition of 100% interest in Munni Munni Platinum Group Metals and Gold Project in the West Pilbara, Western Australia. The Munni Munni project is held in high esteem and thought to be one of the most significant PGE resources in Australia.

The Munni Munni non-JORC resource points to 24Mt @ 2.9g/t Platinum Group Element (PGE) and gold for 2.2Moz PGM3. In term’s of PGEs, Munni Munni includes 1.14Moz of palladium, 0.83Moz of platinum, 152koz gold and 76koz of rhodium. 

This resource was revealed using the now non-compliant 2004 JORC standards, so one of the first jobs at Munni Munni will be to conduct a JORC 2012 compliant study.

Iron ore

Australia is also home to the Hamersley Iron Ore asset that borders licences held by Fortescue Metals Group, Hancock Prospecting, BHP Billiton, Hope Downs and Brockman Mining.

A recent study found the project to hold 10m/t of “high-quality product with very little adverse deleterious minerals’. The costs associated with bringing the asset into production are also highly attractive. Hamersley benefits from low capital requirements aided by adequate infrastructure and access to the Port Hedland Public Ore Terminal.

The ability to employ surface mining techniques helped to achieve low estimates of $60 per tonne Free on Board costs for Alien’s iron ore offtake. Spot prices for Dalian 62%-grade iron ore have been having around $130 per tonne.

Bill Brodie Good, Alien Metals CEO, said they were working to ‘get this project into production within a very short timeframe.’

Elizabeth Hill

The high-grade Elizabeth Hill Silver Project has ben undergoing evaluation and recently received the final results from the 15 RC drill holes that included 8m @ 4,233 g/t Ag (149oz/t Ag) in one drill hole and 2m @ 1,550 g/t Ag (55oz/t Ag) in another.

The campaign also revealed encouraging assay results for copper, cobalt, lead and zinc.

Mexico

Alien Metal’s Mexican assets focus on silver with the Los Campos and San Celso projects. In addition, Alien is set to begin a drill campaign at Donovan Copper/Gold project.

Los Campos and San Celso projects are located in areas that have seen significant levels of past silver mining activity and San Celso is home to two historic silver mines.

Los Campos Project

The Los Campos project is located in Mexico’s largest silver-producing region and holds two high grade epithermal silver veins that were previously found to have grades of 14g/t Au Equivalent.

Greenland

Alien Metals obtained a license to begin exploration in Greenland in a 208 km2 exploration area in the close vicinity of what is thought to be one of the largest lead/zinc deposits in Greenland.

The Citronen zinc-lead project owned by Ironbark Zinc Limited has a JORC Resources of 131.1 m/t @ 4.5% Zn + Pb.

The Alien Metals share price was 0.61p at the time of writing.

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