Small Cap Feast

Small Cap Feast – 17 June 2019

Set Menu AIM:

Total number of AIM Companies (Incl Susp): 893

Total number of AIM Companies trading: 818*
* As at 17 June 2019

Set Menu NEX Growth:

Total number of NEX Growth Market Companies (Incl Susp): 89*

Total number of NEX Growth Market Companies trading: 87*
* As at 17 June 2019

Set Menu Standard List:

Total number of Standard List Companies (Incl Susp): 163*

Total number of Standard List Companies trading: 141*
* As at 17 June 2019

Dish of the Day:

No Joiners Today

Off the Menu:

No Leavers Today

Dish of the Day:

No Joiners Today

Off the Menu:

No leavers Today

What’s Cooking in the IPO Kitchen?

Main Market (Premium)

Trainline—Seeking £75m raise. Proceeds to target a net debt at IPO of c.2x LTM Adjusted EBITDA). In FY 2019, Trainline achieved net ticket sales of £3.2bn, and revenue of £210m.  Due June

Airtel Africa Limited — provider of telecommunications and mobile money services, with a presence in 14 countries in Africa, primarily in East Africa and Central and West Africa, looking to join the premium segment of the main market. Offer TBC, expected TBC

ReAssure Group plc  –  The Group is a leading closed book life insurance consolidator in the United Kingdom with 4.3m policies, £68.7 billion of assets under administration on a Post-L&G Illustrative Basis. It is considering a premium listing segment of the main market.

Main Market (Standard)

IMC Exploration Group (NEX: IMCP), focused on acquiring and exploring prospecting licence areas which have high potential for natural resource, is looking to admit its shares to the standard list and will withdraw for the NEX Exchange. TBC

AIM

Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

Argentex a UK-based forex service provider founded in 2011 by its current management team which operates as a Riskless Principal for non-speculative and forward foreign exchange as structured financial derivatives is looking to join AIM. Offer TBC, expected 25 June

Rumours & Speculation

Neptune Surf Technology plc*, a vertically integrated lifestyle accessory group focused on the surf market, designing its own high-performance wetsuits and surfing hardware and distributing these together with third party brands globally with key markets being Europe, Australia and USA and Brazil, is looking to join AIM and ‘is planning an £11m float’ according to The Sunday Telegraph.

Breakfast Buffet

FairFX (FFX.L) 111p £182.5m

FairFX, the e-banking and payments group, announced that at its AGM, John Pearson, Chairman, will make the following statement:

2018 was another year of significant growth for FairFX with further progress made towards our strategic goals. Turnover and revenue growth continued to be strong, both organically and via acquisition, whilst we also made further investment in our technology to increase the functionality and capacity in our platform for continued expansion.

“The Group has enjoyed a strong year to date in 2019, both in terms of turnover and improved margins, which is a consequence of further rationalisation of the supply chain. In addition, the investments we made in 2018 are now flowing through in terms of new products being released in 2019; with one such example being the granting of the Bank of England settlement accounts and direct access to the Faster Payments scheme.

“The Board expects the Group’s trading performance for the full year to be in line with market expectations.”

Fox Marble (FOX.L) 7.6p £17.6m

Fox Marble, the company focused on marble quarrying and finishing in Kosovo and the Balkans region announced the largest single order of its highly prized Illirico Selene marble from the Maleshevë quarry in Kosovo.

Fox Marble has received an order for 1,850 tons of Illirico Selene from an existing customer. Loading of the material has begun, and the order will only be recognised as revenue as the material is despatched from the quarry over the next few weeks.

The order is notable because it consists not only of the higher quality large blocks of stone but also large quantities of small and semi blocks which constitute a lesser grade of block. This has the additional effect of clearing out old stock extracted some years ago and freeing up space in the quarry to further extend the quarrying area and reach additional resources of good quality stone.

This has taken place in part because the demand for this material is expanding with the increased penetration in various markets and the competition for this material from our quarry is growing.

Reabold Resources (RBD.L) 1p £38.2m

Reabold Resources an investing company investing in the exploration and production sector, announced a discovery at West Newton.

Successful appraisal of onshore UK discovery, with both gas and liquid hydrocarbon volumes encountered

Preliminary data suggests West Newton 2C Contingent Resources* is at least the pre-drill estimate of 189 Bcf (Billion Cubic Feet of Gas), the equivalent of 31.3mmbo (million barrels of oil)

West Newton is potentially the largest UK onshore gas field and potentially the largest hydrocarbon discovery onshore UK since 1973, subject to further testing

West Newton is near Hull where there is an abundance of production infrastructure

Permitting in place for Extended Well Test planned for Q3 2019

Existing pre-Drill NPV for West Newton of $247m

Deeper exploration target in the Cade by formation encountered hydrocarbon shows with an oil saturated   core

Union Jack Oil (UJO.L) 0.2p £22.27m

Union Jack Oil, a UK focused on-shore hydrocarbon production, development and exploration company announced positive preliminary results in respect of the recently drilled West Newton A-2 conventional appraisal well, located within PEDL 183 and operated by Rathlin Energy (UK) Limited. Union Jack holds a 16.665% interest in this licence containing the West Newton A-1 discovery well and West Newton A-2 appraisal well.

Substantial hydrocarbon accumulation within a net 65 metre interval encountered in the primary target, the Kirkham Abbey formation

Significant liquids component identified from core and logging data

Extended well test planned for Q3 2019

Planning permission in place for an extended well test

Potentially transformational well result for Union Jack

Trans-Siberian Gold (TSG.L) 64.9p £71.4m

Trans-Siberian Gold, a low cost, high grade gold producer in Russia, announced the appointment of Evgeny Volkov as Mine Manager of the Asacha mine in South Kamchatka, with immediate effect.

Mr Volkov has over 20 years of experience working in the mining industry, most recently as Mine Director at Nordgold’s Zun-Khloba mine in Republic of Buryatiya, where Evgeny was responsible for developing and implementing the underground mining strategy, geotechnical control and mine production, people management and budget planning, amongst others. Prior to that, Mr Volkov spent eighteen years working at the iron ore subsidiary of Evraz, lately as Chief Engineer and Technical Director.

Mr Volkov, aged 42, holds a degree in Mining Engineering (Underground) and a degree in Mineral Processing Technology Engineering from the Siberian State Industrial University.

Intercede (IGP.L) 39p £19.68m

Intercede, the leading specialist in digital identity, credential management and secure mobility, announced that Rob Chandhok has joined the Board of Intercede as an independent NED.

Rob has more than 20 years’ experience in senior commercial technology and internet services roles. He is currently Group CTO at the Daily Mail and General Trust plc, responsible for shaping the Group’s technology strategy.

He has served in senior leadership roles in consumer electronics companies and in start-ups related to the internet of things. Prior to this, Rob performed a series of senior leadership roles at Qualcomm where he led new technology initiatives and managed relationships with the world’s largest software companies.

Avesoro Resources (ASO.L) 51.15p £38.03m

Avesoro Resources, the West African gold producer announced that, subsequent to its announcement of June 12, 2019, negotiations have now successfully concluded between the Company’s proposed open pit mining contractor, Orkun Group Sarl and former employees of the Company’s open pit mining department. Both the open pit mining and gold processing plant operations have now restarted at the Youga Gold Mine in Burkina Faso.

Mining operations recommenced at Youga on June 15, with processing operations recommencing on June 16, following a period of building stockpiles. During the time that processing operations were suspended at Youga, the Company’s engineering team took the opportunity to bring forward and complete various scheduled electrical and mechanical maintenance tasks in and around the process plant.

Angling Direct (ANG.L) 72p £46.5m

Angling Direct, the largest specialist fishing tackle and equipment retailer in the UK, announced that it has opened its 28th store in the UK. The new store, located in Sutton in Ashfield, Nottinghamshire, opened on Sat 15 June.

The new store, which was previously occupied by Brantano, has a 4,500 sq ft. display area and is located just outside the main town, with easy access via the A38 and other arterial roads.

Located in a popular fishing area, with a strong angling community and a series of lake and river venues, the store is the first fishing tackle “destination store” of its kind in Sutton in Ashfield. As with all Angling Direct stores, it caters for a wide range of angling disciplines, whilst also providing excellent service from local and knowledgeable employees. The new store is creating five full and three part-time positions.

European Metals Holdings (EMH.L) 22.5p £31.8m

European Metals Holdings announced the results from the successful update of the process flowsheet previously developed to enable the production of lithium hydroxide (LiOH.H2O).  This work has been completed in conjunction with test-work confirming the production of battery grade lithium hydroxide from Cinovec ore.

These results significantly enhance the forecast economics of the Cinovec Project.

HIGHLIGHTS (all $ figures in this release are US Dollars and increases refer to the 2017 PFS Lithium Carbonate study):

Net estimated overall cost of production post credits:  $3,435 / tonne LiOH.H2O

Project Net Present Value increases 105% to:  $1.108B (post tax, 8%)

Internal Rate of Return (“IRR”) increased 37% to 28.8% (post tax)

Total Capital Cost:  $482.6M

Annual production of Battery Grade Lithium Hydroxide: 25,267 tonnes

Studies are based on only 9.3% of reported Indicated Mineral Resource and a mine life of 21 years processing an average of 1.68 Mtpa ore

The process used to produce lithium hydroxide allows for the staging of lithium carbonate and then lithium hydroxide production to minimize capital and startup risk and enables the production of either battery grade lithium hydroxide or carbonate as markets demand

Amerisur Resources (AMER.L) 12.08p £146m

Amerisur Resources, the oil and gas producer and explorer focused on South America, announced that it has entered into a conditional agreement with Occidental Andina LLC to dispose of a 50% interest in the Put-8 exploration licence in the Putumayo region of Colombia, for a cash consideration of $19.1m.

On 20 March 2019, Amerisur announced that it had exercised a right of first refusal (the “ROFR”) to acquire the 50% of Put-8 that it is not already interested in, and the operatorship of Put-8, from Vetra Exploración y Producción Colombia SAS. On 18 March 2019, Amerisur entered into the Agreement with Occidental which is conditional, inter alia, on the approval by the Colombian National Hydrocarbons Agency (the “ANH”) of the transfer of a 50% interest from Vetra to Amerisur, pursuant to the ROFR and the subsequent application for and approval of the transfer of a 50% interest in Put-8 from Amerisur to Occidental by the ANH. The consideration for the Disposal is US$19.1 million in cash, including local taxes, which has been pre-paid by Occidental on the basis that it is refundable if the Disposal does not complete. On completion of the Disposal, taking into account the pre-payment by Occidental and the recovery of local taxes, the net effect of the completion of the ROFR and the Agreement is expected to be broadly neutral to the Company’s unrestricted cash position. Amerisur will retain the operatorship of Put-8 following completion of the Disposal.

Head Chef:

Derren Nathan
0203 764 2344
derren.nathan@hybridan.com

*A corporate client of Hybridan LLP

Disclaimer

This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to any such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific person or entity and is not a personal recommendation to any such person or entity. Recipients should reach an individual investment decision, based upon their respective financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor.

The information contained in this document is based on materials and sources that are believed to be reliable; however, such information has not been independently verified and therefore it is not possible to confirm such information as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information contained in this document, nor should it be relied upon as such.

The content of this document includes market commentary and other information which we have prepared in relation to the company referred to in this document, which is our broking client. The provision of this document to you constitutes a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of Regulation 600/2014/EU (MIFID II Regulation).

Any and all opinions expressed are current as of the date appearing on this face of this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document.

This document should not be relied upon as being an independent or impartial view of the subject matter and, for the avoidance of doubt, constitutes non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook to reflect the requirements of the MIFID II Regulation and Directive 2014/65/EU (known as MIFID II)). The individuals who prepared this document may be interested in shares in the company concerned and/or other companies within its sector, may be involved in providing other financial services to the company or companies referenced in this document or to other companies who might be said to be competitors of the company or companies referenced in this document. As a result both Hybridan LLP and the individual members, officers and/or employees who prepared this document may have responsibilities that conflict with the interests of the persons who receive this document. Hybridan LLP and/or connected persons may, from time to time, have positions in, make a market in and/or effect transactions in any investment or related investment mentioned herein and may provide financial services to the issuers of such investments.

In the United Kingdom, this document is directed at and is for distribution only to persons who (i) fall within article 19(5) (persons who have professional experience in matters relating to investments) or article 49(2) (a) to (d) (high net worth companies, unincorporated associations, etc.) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (SI 2005/1529) (as amended) or (ii) persons who are each a professional client or eligible counterparty (as those terms are defined in the Financial Conduct Authority’s Conduct of Business Sourcebook) of Hybridan LLP (all such persons referred to in (i) and (ii) together being referred to as relevant persons). This document must not be acted on or relied up on by persons who are not relevant persons. For the purposes of clarity, this document is not intended for and should not be relied upon by any person who would be classified as a retail client under the Financial Conduct Authority’s Conduct of Business Sourcebook.

Neither this document, nor any copy of part thereof may be distributed in any other jurisdictions where its distribution may be restricted by law and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. Distribution of this report in any such other jurisdictions may constitute a violation of territorial and/or extra-territorial securities laws, whether in the United Kingdom, the United States or any other jurisdiction in any part of the world.

Where possible this document is made available to all relevant recipients at the same time. Dissemination of research by Hybridan LLP is monitored to ensure that it is only provided to relevant persons. Research prepared by Hybridan LLP is not intended to be received and/or used by any person who is a retail client.

Hybridan LLP and/or its associated undertakings may from time-to-time provide investment advice or other services to, or solicit such business from, any of the companies referred to in this document. Accordingly, information may be available to Hybridan LLP that is not reflected in this material and Hybridan LLP may have acted upon or used the information prior to or immediately following its publication. In addition, Hybridan LLP, the members, officers and/or employees thereof and/or any connected persons may have an interest in the securities, warrants, futures, options, derivatives or other financial instrument of any of the companies referred to in this document and may from time-to-time add or dispose of such interests.

This document may not be copied, redistributed, resent, forwarded, disclosed or duplicated in any form or by any means, whether in whole or in part other than with the prior written consent of Hybridan LLP.

MIFID II status of Hybridan LLP research
The cost of production of our corporate research is met by retainers from our corporate broking clients. In addition, from time to time we issue further communications as market commentary (such as our daily newsletter, Small Cap Breakfast), which we consider to constitute a minor non-monetary benefit which is capable of enhancing the quality of service provided by Hybridan LLP and which is of a scale and nature which could not be judged to impair the duty of Hybridan LLP to act in the best interest of its client falling within article 24(7)(b) of the MIFID II Regulation.

Hybridan LLP is a limited liability partnership registered in England and Wales, registered number OC325178, and is authorised and regulated by the Financial Conduct Authority and is a member of the London Stock Exchange. Any reference to a partner in relation to Hybridan LLP is to a member of Hybridan LLP or an employee with equivalent standing and qualifications. A list of the members of Hybridan LLP is available for inspection at the registered office, 2 Jardine House, The Harrovian Business Village, Bessborough Road, Harrow, Middlesex HA1 3EX.

If you would like to unsubscribe, please email enquiries@hybridan.com with “unsubscribe me”.