Following Part 1 of Top 5 high-risk small-cap FTSE shares to consider in Q2 2023 published last week, Part 2 outlines the cases for Greatland Gold, Premier African Minerals and Avacta.
Of course, this is only a personal view, and not investing advice. The high-risk notice is made for a reason. They’re speculative and volatile but come with the chance of exceptional returns for patient investors.
3. Greatland Gold (LON: GGP)
GGP shares have fallen significantly over the past year, but the gold explorer could be one of the best small-cap opportunities by dint of its 30% ownership of the world-class Havieron Project in Western Australia.
The other 70% is owned by mining titan Newcrest, who also owns the nearby Telfer gold mine and associated processing plant. The plan for some time has been to develop Havieron using Telfer’s infrastructure.
However, a spanner has recently been thrown into the works. Newmont has approached Newcrest with an improved offer $19.5 billion merger offer, which would create the world’s largest gold miner by some margin. Given the cost synergies, the companies’ shared history, and rudderless Newcrest leadership, I think this will now go through.
The implications for GGP are stark — they might be about to be in partnership with the world’s gold titan, though they may also look for a way to buy out the remaining 30% of the $1.2 billion project and also negotiate access to Telfer.
Regardless, a Newmont-Newcrest tie-up could act as a near-term price catalyst.
4. Premier African Minerals (LON: PREM)
PREM has been one of the best FTSE AIM performers in recent years, with its share price rising from lows of 0.02p less than four years ago to over 1p today — yielding a market cap over £220 million.
The Zimbabwe-based miner is the 100% owner of the Zulu Lithium Project, which is widely regarded as one of the largest undeveloped lithium reserves in the world. And it’s just cleared up the last couple of hiccups before production — including a missing reagent and government approval.
CEO George Roach has already noted that ‘with plant commissioning already complete, we are now going through the final stages of process control implementation with the plant designers with first concentrate expected shortly and first shipments now targeted for the end of the month.’
With investor Canmax holding circa 13% of shares and rights to 50% of offtake — and Chinese titans investing heavily in the country — investors are feverishly considering the prospect of a full buyout at a high premium.
If not, first sales could be enough by itself to catalyse the share price higher — though I’d caution that there are nearly always small problems when a plant first switches on.
5. Avacta (LON: AVCT)
Avacta is currently proceeding with clinical trials of its flagship AVA6000 — which it hopes will deliver ‘chemotherapy without the side effects.’
The company recently announced that the first patient of the fifth cohort of the flagship AVA6000 Phase 1a Dose Escalation Study has been dosed with the treatment in the UK — this first in-human phase I trial includes MHRA approval for higher dosages — at a level of 250mg/m2. The idea is to find out the maximum tolerable dose for further clinical trials.
CEO Alastair Smith notes that ‘the recent confirmation of release of active chemotherapy in the tumour tissue and the safety data being generated in the ALS-6000-101 study are providing detailed insights.’
The company has also opened two US Clinical Investigator Sites for AVA6000 Phase 1, one at the Memorial Sloan Kettering Cancer Center and the second at the Fred Hutch Cancer Center. Enrolment for soft tissue sarcoma patients has begun, with trials led by globally renowned oncologists Dr William Tap and Dr Lee Cramer.
Avacta has hinted that phase 1B may be conducted initially across the pond, claiming that stateside is ‘uniquely positioned’ for further research. CDO Neil Bell has highlighted the recent ‘major milestone,’ and plans to ‘build the clinical evidence base for the safety and tolerability of AVA6000.’
Further clinical success could see the share price rocket — and a buyout or US listing — could come at any time.
This article has been prepared for information purposes only by Charles Archer. It does not constitute advice, and no party accepts any liability for either accuracy or for investing decisions made using the information provided.
Further, it is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.
