Small Cap Wrap: Month: May 2011

AIM Breakfast - Archive

31 May 2011

This week: Amur doubles up, under the Bahamas sea, broadening the Range, Solo goes joint

With the announcement of a 0.5 per cent growth in GDP for the first 3 months of the year and a report that Germany could make concessions to facilitate a new aid package for Greece, the week saw a 1.2 per cent rise in the FTSE 100, while the AIM All share dipped during mid week and recovered to close at similar levels. The British Chamber of Commerce cut its GDP growth forecasts for the UK from 1.4 per cent to 1.3 per cent, and with little in the way of economic data expected for the week (except for BoE mortgage lending data), focus will shift to the US jobs report due on Friday, which forecasts for an increase in employment.

African Minerals (AMI 499p / £1,636.78m)
African minerals announced that it has signed a Memorandum of Understanding (MoU) with China Communications Construction Company Limited (CCCC) in respect of the optimisation and finalisation of a Final Engineering Study (FES) for all aspects of infrastructure for the Phase II and Phase III expansions of the AML Tonkolili Iron Ore project in Sierra Leone. Subject to all parties agreeing a formal appointment contract, on completion of the FES, CCCC will prepare a proposal to act as Engineering, Procurement, Construction and Management (EPCM) contractor to the Company. The MoU, which is intended to be binding between the parties, will be exclusive for a period of six months, during which time the engineering studies will be completed. AMI, CCCC and the Government of Sierra Leone also intend to establish a Joint Venture to design an expansion to the Bumbuna hydro-electric power generation facilities to satisfy the power needs of Phases II and III of the Tonkolili project.

Altona Energy (ANR 10.75p / £45.31m)
Altona Energy, the AIM listed Australia-based energy company last week announced that it had entered into  a memorandum of understanding with Tongjiang to develop a strategic partnership in China to identify and evaluate coal and biomass gasification projects for the production of clean energy and transportation fuels. Tingjiang , a Hong Kong based private  investment group, has been a strategic shareholder in Altona since February 2008 and was instrumental in the introduction of China National Offshore Oil Corporation(CNOOC) to the company. CNOOC is Altona’s joint venture partner for the Arckaringa Project in Australia, the Company’s principal focus.  The chairman reported that the company looked forward to updating shareholders on the further progress being made on the bankable feasibility study at Arckaringa.

Amur Minerals (AMC 15.5p / £43.07m)*
AIM listed exploration and Development Company focused on Far East Russia last week announced that it has closed an early settlement for the equity swap agreement entered into with Lanstead Capital LLP in July 2010. This has allowed the Company to realise on an accelerated basis total proceeds of £2.07m, which is more than double the original placing proceeds of £0.89m. Fees related to the transaction have been included in the reported values. The acceleration of the settlements has resulted in a substantial increase in cash reserves whilst the Company continues its efforts to obtain its mining licence and to undertake the upcoming 2011 field season. A second equity swap agreement with Lanstead, announced on 22 March 2011, remains in place allowing Amur to continue to benefit from future share price appreciation over the subsequent 24 months.

Ascent Resources (AST 3.35p / £34.35m)
In April 2011, Ascent Resources, an AIM listed oil and gas exploration and production Company re-commenced the Company’s operations of the PG-11A in the Karpatian reservoir. This is positioned to become the first re-development well in the Petiscovci Project in Slovenia, of which the Company has a 75 per cent interest. The first open hole test on the reservoir proved to be successful as there was presence of producible, good quality hydrocarbon gas after re-drilling to a dept of c. 3000m. Additionally, Ascent’s Managing Director, Jeremy Eng observed that if confirmed by laboratory analysis, the minute concentrations of carbon dioxide in the gas (of less than 1 per cent) may mean that CO(2) processing equipment will be rendered unnecessary during the early stages of redevelopment. However, in spite of challenging drilling conditions in the form of high pressures and temperatures inside the well, further drilling to a total depth of 3500m is planned in order to map the full extent of the reservoir. Shareholders will be updated upon completion of the current phase of operations on the well.

Bahamas Petroleum (BPC 16.5p / £203.03m)
Bahamas Petroleum, the oil and gas exploration company with offshore license permits in the Bahamas is conducting a seabed survey. This is an important part of the Company’s exploration programme as the survey can be applied towards hydrocarbon seep detection and the environmental assessment of the license area. Bahamas Petroleum has further signed a contract with Fugro N.V to conduct this high resolution seabed survey which takes approximately six weeks to complete, starting early June.

Bloomsbury Publishing (BMY 129.5p / £95.87m)
In their preliminary results, Bloomsbury Publishing has highlighted that the demand for digital delivery has increasingly called for a shift in the Company’s business model. They have taken steps to adapt their brands accordingly, with more notable projects, like the Winston Churchill Archives and the Public Online Library, seeing rapid digitization and expansion into new territories, respectively.
The Company has changed its year end to 28th February 2011, with total revenues to this date being £103.m (12 months ended 31 December 2010 was up 4 per cent to £90.7m, from £87.2m in 2009). A pre-tax profit of £4.2m was recorded (2009: £7.1m), a basic earnings per share of 3.02 pence (2009: 6.77 pence), and with net cash of £36.9m (2009: £35.0m), drivers of UK revenues were the success of the Adult list and full period’s trading of Bloomsbury Professional, with the increase of e-book sales influencing US revenues. However, with Kindle quickly establishing itself in the UK (and soon to be in Germany), demand for e-books is projected to surge in the latter two areas. E-book sales increased to £1.5m in 2010 (2009: £0.08m), with sales in January to March being £1.1m.
In order to realize increased synergies across the firm, the Company has not only centralized its UK operations in London, but is also unifying under the One Global Bloomsbury strategy. Along with the acquisition of Bristol Classical Press and Duckworth Academic expanding the group into classical philosophy in November 2010, the launch of Bloomsbury Australia in January 2011, and several notable appointments to the strong, entrepreneurial management team, this is a significant effort by Bloomsbury to adapt to the changing environment and to “better exploit [the] worldwide market as a global publisher in print and digital”.

First Derivatives (FDP 525p / £85.97m)
Provider of software and consulting services to industry global investment banks and hedge funds announced results for the 12 months to 28 February 2011. Company revenues increased by 44.2 per cent to £36.7m (2010: £25.5m), whilst pre-tax profits increased by 15.1 per cent to £6.5m compared to (2010: £5.6m). Impressively, First Derivatives increased its headcount from 385 to 524 at the year end demonstrating its commitment to building its number of employees, with a significant proportion coming from the ever-growing pool of university graduates. Whilst consultancy services represent the bulk of the revenue generated, relative growth of software sales was much greater, having increased by 104 per cent to £12.5m (2 per cent growth for consultancy sales). The Company also acquired LakeFront Data Ventures Inc. in the summer of 2010, which has been fully integrated into the business and contributed to performance for the period, and having secured £4.3m from Invest NI for the creation of 359 new jobs over the next three years, First Derivatives could have an interesting period to look forward to.

GGG Resources (GGG 26.25p / £43.51m)
The mineral resources exploration company announced that development of its Bullabulling Gold Project continues on track. The joint venture with Auzex Resources Ltd has commenced with the Phase Two drill programme. Approval of the programme of works for a planned 194,000 metres drilling programme has been received from the Western Australia government and three drill rigs are currently working on site. 27 new drill holes totalling 5,793 metres have been completed during April and May 2011, bringing the overall drilling total to 36,540 metres in 254 drill holes since commencement and 1,508 metres in eight holes for the Phase Two drilling programme. Results from the programme continue to confirm and expand the current resource model and include new high grade intersections. Approximately 22 per cent of reported mineralised sections are outside the current resource model. The QAQC (quality assurance/quality control report) has been approved by their resource consultant which means that the historic reverse circulation drill data can be used for resource and reserve estimation.

Green Compliance (GCO  0.92p / £16.83m)
Green Compliance, a leading provider of compliance-related business support services, last week announced that it expected to report a successful trading outcome for the year ended 31 March 2011 marginally ahead of management expectations. The Company has acquired 11 businesses in the year and with a major focus on integration of those acquired businesses now has a significant presence in its chosen markets in water hygiene, pest control and fire protection. It will be interesting to see how the Company integrates this number of acquisitions in such a short space of time.
In terms of the market more generally, the Company reported that demand in the three markets of water hygiene, pest control and fire protection is strong and this provided significant opportunity for organic and acquired growth.

GW Pharmaceuticals (GWP 125p / £164.44m)
GW Pharmaceuticals last week announced that the health authorities in Germany have granted regulatory approval for its Sativex spray for the treatment of patients suffering from Multiple Sclerosis (MS). The medicine is already available to MS patients in UK and Spain and is expected to be launched in Germany in July 2011.  Sativex is delivered by a spray and is shown to have a positive effect on spasticity (otherwise known as muscle stiffness) in MS.

Herencia Resources (HER 3.11p / £39.22m)
Herencia Resources, the mineral exploration and development company, reported high grade copper and silver results from surface sampling to the south-west of La Rosa, further enhancing the porphyry prospectivity of the project. Results from the sampling have confirmed high grades of up to 2.6 per cent copper and 202 g/t silver. The La Rosa prospect is within close proximity to both the Doris prospect, where copper and silver have been confirmed on surface and in diamond drill holes and the Patricia zinc-silver-lead-gold mineral resource.

Hydro International (HYD 125.5P / £18.02m)
AIM listed supplier of environmentally sustainable solutions and products for the control and treatment of storm water, wastewater and combined sewer overflows, provided a trading update in which it stated that the Company is trading in line with market expectations for the year to 31 December 2011 and is encouraged by general trading as the level of project proposals remains high. The US Wastewater business was awarded a $2.4m grit removal contract at the Point Loma Wastewater Treatment Plant in San Diego, California during the period, though the UK business continues to see delays with projects coming through under the new Asset Management Program AMP5. The Group’s Storm water businesses are seeing recovery in their core markets, and in the UK demand (demonstrated by the strong level of enquiries) appears to be recovering, though conditions in the US remain challenging with subdued private sector construction activity. Whilst the Company seeks to grow its main UK and US businesses organically, it continues to consider acquisition opportunities to further its growth in other international markets.

Landkom International (LKI 5.38p / £23.38m)
AIM listed cultivator and distributor of crops provided an operational update covering the spring period, in which it announced that it had completed its spring 2011 planting campaign with 23,000 hectares of land being planted. This has pushed the total planted area to 52,000 hectares for the summer harvest, up 30 per cent year on year and some 80 per cent up on the 2009 period. Of this planting, approximately 10,400 ha was of maize, 5,100 ha of spring wheat, 2,500 ha of spring rapeseed, 2,000 ha of sunflower, 1,800 ha of soybean, 600 ha of spring barley, 300 ha of other cash crops and 400 ha of non-cash crops. This follows the winter period in which despite severe weather conditions Landkom lost only 2.14 per cent of the crops planted in autumn. The Group has now planted 70 per cent of its available land bank, and harvesting operations are likely to start in the southern region by the end of June.

Leni Gas and Oil (LGO 2.98p / £27.35m)
The Company, an oil and gas production, development and exploration company said that, as planned, Societe de Maintenance Petroliere (SMP) and Services Petroliers Schlumberger were mobilised to the Ayoluengo and Hontomin oilfields in Northern Spain in the week of April 26th. From that, they report the following: SMP-2 rig and the Schlumberger wireline unit have been used in tandem with the Company owned Cardwell work-over rig to advance work on two wells simultaneously. To date, wells Ayo-4, Ayo-5 and Ayo-32 have been logged. Wells Ayo-4 and 5 have been perforated and both have been recompleted for production and have now returned to production. Ayo-32 is expected to be concluded within a week. Based on the electric logs run in the well, it is believed that additional production capacity will be achieved over the next few weeks in Ayo-5. The SMP-2 rig has now been moved to well Ayo-37 and operations are underway with 5 metres of new perforations and at least 28 metres of re-perforating planned. In addition, an electric down-hole submersible pump will be installed in Ayo-37 once logging and perforation operations have been completed. The Cardwell rig will shortly be moved to Hontomin-2 to prepare the well for perforating.

Mediwatch (MDW 2.5p / £3.52m)
Mediwatch, the innovative urological diagnostic manufacturing company, last week announced a trading update for the six months to 30 April 2011. The Company reported that in a more challenging marketplace, turnover for the first six months was marginally ahead of the same period last year. However gross margins have come under pressure due to increases in components and manufacturing costs and increased industry competition. This has lead to a small reduction in gross profits.  Management is implementing a number of programmes aimed at reducing manufacturing costs, while the company has already been actively pursuing a strategy of reducing overhead expenses. The reduction in costs has enabled the Company to continue to be profitable in difficult markets and with the introduction of new products the board is optimistic for the second half of the 2011 financial year.

Plant Health Care (PHC 53p / £28.11m)
Provider of naturally-derived products to the agriculture industry, released a trading update in which it noted that current trading is in line with the Board’s and the market’s expectations for the current financial year. Having sold the U.S retail and landscape business in January, the Group is showing, on a comparable basis, for the first 4 months of the year to April 30, an uplift in sales of over 20 per cent compared with the same period last year. There was a particularly strong contribution from Europe and Mexico and, partly as a result of the decision to cease the early order program to generate higher margin sales, an overall 4 per cent improvement in gross margin compared with 2010. The sale of the U.S retail and landscape business helped push the Company’s cash balance to $18.0m, compared to $13.0m at the year end. Plant Health is in talks with a number of companies in the US, Europe, Africa and Asia on a non-exclusive basis for agreements concerning both Harpin and Myconate as standalone products and in combination with herbicides, pesticides and fungicides on a wide variety of crops, including sugarcane, corn, cotton, soybeans and vegetables and fruits, and with several agreements already at an advanced stage it intends to provide the market with a status update in its half year report in mid August.

Range Resources (RRL 15.75p / £252.77m)
Range Resources, an international oil and gas exploration, development and production Company, provided an operational update in which it commented on progress made in Texas and Trindad. A simulation program in Texas showed dramatic increases in oil and gas flow rates from the Russell-Bevly #1 well, with stabilized flow rates of approximately 3.5 millions of cubic feet per day (mmcfd) and 350 barrels of oil per day (bopd) from this one zone alone. Other completed zones are projected to exceed the budgeted 4 mmcfd and 350 bopd for all production areas in the well. The Company awaits the arrival of frac equipment and crews to progress the Ross 3H horizontal well in East Clarksville field. With frac work is expected to begin in the next two weeks.

Following the acquisition of SOCA Petroleum in Trinidad, the Company is gearing up for an aggressive development program which should help grow oil production from the existing fields. The current production rate of 650-700 bopd is projected to rise to 4,000 and the program will also focus on the deeper and potentially bigger Herrara formation as well as untested areas not part of the current reserve base. Work should commence in the next 30-45 days, with the first phase including nine shallow wells at depths of 250-2000 ft, each well will potentially take one-two weeks to drill and complete, with initial flow rates projected to be in the range of 40-150 bopd per well. The Company’s technical team will further reprocess existing 3D seismic to upgrade the current 10 plus Herrara targets.

Solo Oil (SOLO 1.74p / £40.45m)
Solo Oil has gained a 38.1 per cent direct working interest in the Ausable Field and surrounding properties in South Western Ontario. The Properties include the Ausable, Airport North and Airport South reefs with a total acreage of approximately 1800 acres. Currently, the Ausable Field is generating revenue largely from the Austable #1 and #4 wells. However, the latest April 2011 petrophysical analysis at the Ausable #5 well, drilled earlier in the year, was found to have contained 72 metres of net hydrocarbon bearing pay. Thus, the well could be promoted as an oil and natural gas liquids producer upon successful production testing of this well, expected any day. Due to the presence of oil and natural gas supply in the Ausable #5 well, Reef has started scheduling drilling of additional wells and is expanding Ausable production facilities, all of which is hoped to be completed by the end of 2011. Additionally, as the agreement also consists of rights to the 23,000 acre 3D seismic survey around the Ausable Field, current data highlights the existence of production sites that are untested yet have potential for development. Other development plans include expanding gas cycling and gas storage capacities.
The Company has entered into a binding Heads of Agreement with Reef Resources, and will commit to co-invest with Reef in further development of the field and the surrounding properties. In order to earn this 38.1 per cent working interest, the terms will have Solo convert the existing loan of CDN$1.65m into a direct working interest, as well as an additional investment up to CDN$2.35m in the properties.

Transense Technologies (TRT 3.88p / £5.12m)*
Last week, Transense announced its results for the year ended 31 December 2010. The results stated that it has been a year of considerable, if slower than expected, development.  By December 2010, Transense was working on more active and customer-led projects than ever before in its history. The loss for the year was £1,454,000 (2009 – £1,472,000 loss). The road to full commercialisation of the Transense SAW (surface acoustic wave) IP patent portfolio continues. A growing pipeline of active new projects and encouraging acceleration of progress in drive-line torque provides grounds for optimism. However, it remains difficult to predict the timing of agreements and subsequent revenue recognition with any certainty. The Company remains confident in the quality of its technology, the strength of these relationships and value of its products to its customers.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

17 May 2011

This week: A better view from 3D, i-Designs on banking, Lighthouse – a shining light, Scientific Digital – not insignificANT

3D Diagnostic Imaging (3DD 2.88p / £4.9m)
3D Diagnostics, which owns the protected rights to a technology platform with a number of significant potential commercial products, announced that it has entered into a UK distribution agreement with DenPro for its CarieScan Pro product. This gives the Company significant territorial coverage having already signed agreements covering China, India, Germany, Austria, Switzerland and North America. Covering dental practices throughout the UK, DenPro supports a group of well-established regional dental distributors who collectively have 18 representatives, and they intend to showcase the CarieScan PRO at the British Dental Association Conference (one of the UK’s largest dental conferences) in Manchester on 19 – 21 May 2011.

AFC Energy (AFC 49.5p / £85.8m)
AFC Energy, a developer of alkaline fuel cells, has signed a binding Heads of Terms with N(2)telligence GmbH relating to the use of alkaline fuel cells for fire protection. AFC and N2 will work together on an exclusive basis, whereby AFC will only supply the exhaust air from its alkaline fuel cell systems to N2 for fire protection and low oxygen environments and N2 will only source the air from AFC. N2 has licensed patents from Airbus to develop fire protection systems that use the exhaust air from fuel cell systems to create low oxygen environments.

Alecto Energy (ALO 3.38p / £6.29m)
AIM listed resource investment Company announced the details of Phase Two of its exploration programme located in Mauritania.  The consultants SRK Exploration Services have been appointed to conduct Phase Two of exploration to commence by the end of May 2011, taking six weeks. Samples will be sent to an independent laboratory for analysis, and results published to the market on receipt. The Phase One exploratory work identified two well defined copper in soils anomalies, with strike lengths of over 800m and 900m, located at the Wad Amour license area. Early indications demonstrate solid grades.  Phase Two will focus on these as a high priority and also upon areas indicating gold pathfinder minerals. Trenches will be excavated where appropriate on targets delineated from geochemistry, mapping and geophysics.

Altona Energy (ANR 11p / £46.36m)
Altona, the AIM –listed Australia-based energy company, announced last week that its major shareholder, Tongjiang International Energy, had subscribed £1m for new shares in the company to provide additional working capital for the company.  This was followed by news this week that the company has signed an evaluation agreement for production of renewable ethanol from CO2 with Icelandic based clean energy company, CRI. Under the agreement Altona and CRI will work together to evaluate the application of CRI’s technology at the Arckaringa coal-to-liquid project in South Australia. The Arckaringa project is a joint venture between the company and CNOOC- NEIA, a subsidiary of Chinese oil major CNOOC under which CNOOC – NEI will fund the bankable feasibility study. The chairman commented: “The CRI technology has the exciting potential to further advance the Arckaringa project through applying the captured CO2 as a feedstock for the commercial production of renewable methanol, significantly improving the carbon footprint of the project, whilst adding to the gasoline pool and energy security of South Australia.”

Andes Energia (AEN 24.5p / £32.68m)
Andes, the oil and gas, electricity distribution and hydro-electric power Company, announced the successful conclusion of a farm-in agreement with YPF S.A, Argentina’s largest oil and gas Company. The agreement is subject to the formalisation of new UTEs (joint ventures). Following completion, Andes will hold a 28 per cent carried interest in the blocks and is also entitled to a 2 per cent share of YPF’s interest in net production. Under the agreement, YPF will fund exploration work program commitments up to the stage of commercial discovery. Furthermore, YPF will further fund the first US$12m of Andes’s share of production costs following a declaration of commerciality. Juan Carlos Esteban, CEO of Andes Oil and Gas comments: “We are delighted to have secured a second agreement with YPF, following the previous one in respect of our Neuquen licences. We have conducted a significant amount of work on these blocks and we are particularly pleased, based on the results of this work, that YPF has recognised the development potential in these blocks by entering into this second agreement with us. This relationship with YPF will help us to develop these six areas and catch up with our original development plans. This agreement further consolidates our relationship with YPF, the largest oil and gas development Company in Argentina.”

Designcapital (DESC 14.5p / £10.09m)
AIM listed investment company dedicated to contemporary furniture design yesterday  announced that its Paris based subsidiary, Forum Diffusion, has secured a significant contract to supply furniture to the Paris head office of a major French international group. The contract is initially for the supply of 1,700 workstations, to the value of €1.9m, although the directors expect that additional requirements are likely to increase the size of the order in due course.  The furniture will be sourced by Forum predominantly from Italian and German manufacturers and it is anticipated that delivery will begin on June 15th 2011 and shall last until November 2011.

ECR Minerals (ECR 1.6p / £8.59m)
Mining company ECR Minerals announced that a total of 900 metres of outcropping gold-bearing quartz veins have been identified at its El Abra gold prospect in La Rioja Province, Argentina. The surface geochemical sampling returned high gold grades including, 80.78 g/t Au, 44.98 g/t Au and 39.74 g/t Au. The high grades are broadly distributed across identified veins. More drilling and geophysics are proposed to evaluate continuity of mineralisation at depth. As well as further mapping and geochemical sampling at El Abra and within the wider Sierra de las Minas project area, ECR proposes to undertake a 1-2,000m drilling programme at El Abra with the objective of enabling the completion of an initial gold resource estimate. Prior to the detailed planning of this programme, ECR may seek to complete a ground based geophysical survey over the prospect. In addition, the Company intends to rehabilitate certain historic mine workings at El Abra to achieve a degree of safe access sufficient to allow sampling to take place up to 20m below surface level. The Company is also evaluating the prospectivity of the Sierra de las Minas project area for the discovery of copper porphyry mineralization and an additional objective of the proposed drill programme at El Abra would be to test for porphyry potential.

Elektron (EKT 42p / £44.69m)
Elektron, the global technology based provider of engineered solutions, last week announced its preliminary results for the year ended 31 January 2011.   The results represent substantial growth in revenues and profits. Revenues increased by 67  per cent to £50m with profit before tax of £3.6m (2010: £0.20m).  In addition, this profit figure reflects £1.5m of non-recurring and special costs relating to the re-organisation of the Elektron businesses and the costs related to the Hartest acquisition.  These significant increases were a result of both organic growth and the acquisition in September of Hartest. The acquisition of Hartest provided the Company with a greater critical mass as well as further quality, technology driven brands which complement the company’s existing portfolio. The challenge for the current financial year is to lay the foundations for a step change in the scale of the group; reflecting the changes in the business, the Company is to be renamed Elektron Technology. The chairman also reported that Elektron has begun trading strongly this year and the integration of Hartest Holdings is nearing completion.

Frontier Mining (FML 4.25p / £79.09m)
AIM listed gold and copper exploration and development Company, has announced that it has received official approval and registration of the resource estimate for its Maminskoye gold ore deposit. The Maminskoye gold deposit forms part of the Maminskoye Exploration License Area situated in the Southern Ural region of Russia. The license area consists of three deposits: Maminskoye, Gabievskoye and Bezimyanny-Vostochny. Of these, the Maminskoye deposit is the most explored but has the smallest surface footprint at 300m wide, 650m long and to a known depth of over 250m, representing approximately 8 per cent of the targeted exploration ground within the license area. Whilst the other two exploration targets are considerably larger and display similar geological characteristics to Maminskoye, they have not had extensive exploration as yet. The Exploration and Resource Report on the Maminskoye Gold Deposit, as a substantial exploration finding, had been submitted by the Company to the State Resource Committee of the Ministry of Natural Resources of the Russian Federation at the end of last year. The Company has now received formal approval of the registration of the Maminskoye reserves to the State Balance of the Russian Federation. The Company plans to produce an initial JORC report on the Maminskoye resource in 2011, followed by a Bankable Feasibility Study (BFS) in 2012. Frontier also released a Pit Optimisation Study for its Benkala deposit. This study is a key component of the BFS being undertaken by KazCopper LLP on the oxide section of the Benkala deposit. A mineable oxide reserve has been estimated by Wardell Armstrong from the compliant oxide resource previously disclosed. Erlan Sagadiev, CEO of Frontier Mining, commented: “The Pit Optimisation Study is a key part of the BFS. The report confirms and further reinforces the quality of the Benkala deposit and shows more than acceptable mining parameters. This allows us to continue the ongoing development of the deposit while we wait for the completion of the remaining components of the BFS.”

Gulfsands Petroleum (GPX 271.75p / £331.51m)
Gulfsands Petroleum, the oil and gas production, exploration and development Company, announced that it has suspended the Khurbet East 101 (KHE-101) appraisal well as a potential future oil production well following a drill-stem test that achieved a potentially commercial stabilized flow rate of 447 barrels of oil per day from the Triassic aged Butmah Formation reservoir. The KHE-101 well was planned to be drilled to a total depth of 3200 metres and found at 2456 meters (True Vertical Depth Subsea) a gross vertical oil column of 69 metres with a net to gross ratio of 35 per cent and average porosity of 21 per cent based on preliminary interpreted wire line logs. Crosco E-501 rig will now be moved to the Yousefieh 7 well location on the northern flank of the Yousefieh field. Drilling operations in Syria Block 26, using the Crosco E-401 and E-501 drilling rigs, are continuing as planned and have continued without interruption during recent months. Oil production and revenue receipts from the Khurbet East and Yousefieh fields continue without interruption. Expect combined production from these fields to be increased to 24,000 bopd by the end of 2011 with the drilling and tie-in of additional development and delineation wells, and via minor upgrades and de-bottle necking of existing surface facilities.

i-Design (IDG 28.75p / £4.06m)
i-design, the developer and supplier of  a leading market solution for ATM’s and self-service machines last week announced that it had signed a major new banking customer agreement with Barclays Bank. The contract to supply atmAd, covers Barclays entire UK estate of c. 4,000 ATM’s and kiosks and helps to underpin market forecasts for the current financial year.  This news follows a positive update issued in March on trading for the first six months of the current financial year to 30 September 2011. We look forward to the half year results to be announced at the end of June with interest.

Lighthouse Group (LGT 8.38p / £10.69m)
At last week’s annual Financial Adviser Life and Pension Awards, the Group won the Large IFA of the Year Award 2011, the second year running that they have won this accolade. The 2011 award was based on a formal submission which highlighted the various ways in which Lighthouse’s three operating divisions were successfully meeting the multiple challenges of regulatory change; migrating to a post-RDR world whilst enhancing the client experience in a difficult economic environment; building a substantial capability in the workplace and affinity marketing; developing an increasing presence in the corporate pension de-risking market and increasing the Group’s turnover and profitability without any debt. Allan Rosengren, Joint Chief Executive, commented: “It was most gratifying to win this prestigious award for the second year running……..we aim to maintain our track record over the coming year and it would be great to win this again next year, though the odds against are obviously increased”.

Max Petroleum (MXP 16.25p / £150.0m)
Oil and gas explorer Max Petroleum announced that an appraisal well on the Zhana Makat Field in Kazakhstan has found 18 metres of oil in three reservoirs. The ZMA-ET2 appraisal well was drilled to a depth of 1,492 metres and found oil at depths ranging between 1,283 and 1,358 metres in three sandstone reservoirs. The Company said the reservoir quality appears “excellent”. MXP will complete tests on the well after obtaining the requisite governmental approvals and results will be announced as soon as possible.

Medicsight (MDST 3.12p / £4.86m)
AIM listed industry leader in the development of Computer-Aided Detection and image analysis software to assist in the early detection and diagnosis of disease, last week announced its unaudited results for the three months ended 31 March 2011. The group cash balance at 31 March 2011 was £4,373,000 (31 December 2010: £5,336,000) and net revenue from external customers was £30,000 (31 March 2010: £39,000) of which £26,000 was for ColonCAD (2010: £39,000) and £4,000 was for the MedicCO2LON Insufflator (2010: £Nil). The operating loss before interest and tax was £1,467,000 (31 March 2010: £1,299,000). MedicSight responded to the US Food and Drug Administration in March on a series of informal questions including a request for additional statistical analysis on the submission data for ColonCAD, received European approval and launched ColonCAD 4.1 on 25 March 2011. The market awaits news as the Company continues to make progress toward finalising its regulatory approvals in the US and Japan.

Next Fifteen (NFC 84.5p / £46.89m)
Worldwide digital marketing communications group last week announced the acquisition of CMG Worldwide Limited, trading as Bourne, a global, full-service digital agency with offices in Glasgow, London and New York. Bourne is the latest investment by Next Fifteen in the digital marketing arena. Bourne provides high value, strategic planning services across all digital channels. It is headquartered in Glasgow and has clients that include: Dell, Ricoh, Lumesse and Symantec. The move gives Next Fifteen an 80 per cent shareholding in Bourne, a business with £2.5m of revenue in calendar 2010 delivering adjusted profits before interest and tax of £750,000. The remaining 20 per cent holding in Bourne is the subject of put and call options and it is anticipated that these shares will be acquired by October 2018.
Next Fifteen also announced that Richard Anthony Eyre aged 57, Chairman of the Internet Advertising Bureau and the Eden Project has been appointed as Chairman of Next Fifteen. He replaces Will Whitehorn, who has chaired the Group for the last seven years. Eyre will bring to the role 35 years’ experience across the media and marketing industries, including time as Chairman of RDF Media plc, GCap plc; mobile games publisher Digital Bridges, mobile tech company, Rapid Mobile, Bess Media Ltd and Bess Technology Ltd. He was also a director of the Guardian Media Group plc. Eyre’s appointment will be instrumental in moving Next Fifteen further into the digital space, according to Group CEO Tim Dyson. Next Fifteen’s recent strong results reflected the opportunities the Group is experiencing as a result of the market transition to the digital arena.

One Media Publishing (OMPP 3p / £1.3m)*
PLUS quoted consolidators and acquirers of music and video content last week announced that Michael Infante, Chairman and Chief Executive won the award of PLUS-SX Chairman/CEO of the Year at the PLUS Awards 2011. The ceremony, which took place on the 12th May 2011 at the headquarters of the British Academy of Film and Television Arts (BAFTA), celebrates the achievements of companies listed on PLUS-SX and nominees have been selected across seven awards categories. One Media recently put out a great set of financial results and certainly knows how to do deals in its space; we believe it will continue to build its portfolio.

Oxford Catalysts Group (OCG 96p / £86.55m)
Oxford Catalysts, the leading technology innovator for synthetic oil production, last week announced its final audited results for the year ended 31 December 2011. Oxford Catalysts designs and develops technology for the production of synthetic oil from both conventional fossil fuels and renewable sources such as biowaste.
The Company reported a successful 2010 in its continuing transformation from a development organisation to a commercial product provider. Market conditions for synthetic fuel production, especially through smaller scale gas –to-liquids projects, have improved considerably over the past year and the company is enjoying high levels of interest in its technology. A first order was received from SGCE for a commercial scale Fischer –Tropsch reactor followed by a second order post year end.
Year end cash was £5.7m but has been subsequently strengthened by a £21m placing in March 2011.

Scientific Digital Imaging (SDI 16p/£2.88m)
SDI, a specialist company in the scientific instrument space, announced that its subsidiary, Synoptics Ltd, has had its Syncroscopy technology used for the first time by Punjabi University Patiala who is using it to produce a classification guide of some of some of the world’s most unusual ant species. Furthermore, The California Academy of Sciences will also be using the same Auto-Montage Pro technology to document its ‘Antweb’ project, which aims to produce images of 95 per cent of all known ant species.
Synoptics develops and manufactures scientific instruments and systems that exploit digital imaging technology for a range of disciplines. This is a significant use of the technology, which will produce in-focus 3D images of ants from around India and the Himalayas in the case of Punjabi University Patiala, and produce images of a total of 8,000 ant specimens in five years from major ant collections around the world for The California Academy of Sciences.
SDI’s Chairman, Harry Tee, said: “For such well respected research institutions to be using Auto-Montage Pro is a great endorsement for our product and so far the resulting images have been truly breathtaking. We are proud to be able to assist with such valuable research and we look forward to continuing our relationship with all institutions involved.”

Sefton Resources (SER 5.1p / £14.28m)
Recently a total of 300 million shares changed hands in just two days for US onshore oil and gas play Sefton Resources. What excited investors was a Competent Person Report which for the first time put a Present Value on the company’s oil and gas resources in Kansas of $100.1m (£60m). Whilst gas prices have been under pressure in the US, the board has been making a series of opportunistic investments at down to earth prices. Up until the last few days, investors’ attention had been firmly focused on the other side of the business which is oil production at Tapia Canyon in California where Sefton has 3.8m barrels of proven oil reserves. Profitable Sefton produces heavy oil and has a pilot steam program running at Tapia which is investigating the use of steam to heat the reservoir and improve recovery which will not only allow production to rise but also reserves to increase. The company is awaiting the findings of a report by heavy oil expert Dr Ali Farouq which should reveal the true development potential at Tapia. The plan this year is to substantially boost production, increase reserves and to establish cash flow from Kansas. Each of these moves will not only add value but keep the spotlight firmly on Sefton Resources.

Serabi Mining (SRB 28.75p / £18.39m)*
Brazilian focused gold exploration Company yesterday published its unaudited financial results for Q1 2011.  For the three month period ended 31 March 2011 the Company recorded a net loss of US$742,642 compared to a net loss of US$953,599 for the comparative period last year.  The decrease in the loss reflects reduced administrative costs and a foreign exchange gain recorded during the period of US$187,297, compared with a foreign exchange loss in the comparative period of US$1,180.  At the same time in the corresponding period in 2010, the Company had limited gold production which yielded a gross profit of US$78,866.  There has been no mining operation during the three month period ended 31 March 2011 and as a result the Company incurred a gross loss of US$183,822. In January 2011, Serabi completed an additional 8,000 hectare helicopter borne electromagnetic survey over adjacent areas to the original 2008 mine site survey area within the Jardim do Ouro project. In February 2011, the Company received the positive outcome of its appeal to the Instituto Brasileiro do Meio Ambiente e dos Recursos Naturais Renovaveis that the original penalty of Brazilian Reals 3,597,300 (US$2.2m) was cancelled with immediate effect, and also in February positive geochemical results received from trenching over the Piaui drill target including 1 metre at 33.6 g/t and 3.2 metres at 16.1 g/t. In April 2011, results were received for the first five drill holes into the Piaui target indicated significant gold mineralization in all five holes including 1.93 metres at 22.86 g/t and 2.5 metres at 6.22 g/t. On 30 March 2011 an IPO was completed in Canada at a price of C$0.55 per share for gross proceeds of C$4.95m. Serabi’s  short term strategy for the JDO Project (phase  1) is to be followed for the  next  six months  and continues  to  focus  on  ‘head-frame’ exploration with the objective  of discovering  more Palito  style deposits.

Summit Corporation (SUMM 5.75p / £9.68m)*
UK drug discovery Company last week announced that it has nominated SMT 19969 as the preclinical development candidate in its programme developing new antibiotics that target infection caused by the hospital ‘superbug’ Clostridium difficile. The selection of SMT 19969 as the development candidate achieves a further research milestone in Summit’s collaboration with the Wellcome Trust and has triggered a £925,000 payment to Summit to advance SMT 19969 towards clinical trials. Summit anticipates that an application to regulatory authorities to commence clinical trials will be submitted in Q3 2012. The share performed well on the back off this news and has gone up two pence in just a week. Summit has a portfolio of drug programmes and an innovative Seglin technology platform for the discovery of new medicines. We look forward to Summit reporting results of ongoing studies involving the use of Seglin based technologies.

Tertiary Minerals (TYM 10.12p / £12.03m)
Tertiary Minerals, a diversified mineral explorer and developer with a strategic position in the fluorspar sector, has announced positive results from sampling of archived drill core from its Lassedalen project in south-west Norway. The core is from holes drilled in the 1970s by Norsk Hydro A/S (Norsk). The Company also reports that it has obtained from Norsk an extensive archive of data which reveals that evaluation of the project progressed further at the time than public records suggested. Norsk’s activity included pilot scale test work demonstrating the feasibility of production of acid grade fluorspar and included the design of a mine, process plant and infrastructure. The metallurgical reports from the 1970’s projected fluorspar recoveries in excess of 80 per cent. Patrick Cheetham, Executive Chairman, comments: “These are highly encouraging results – it has been an important step to confirm historical assay results and the archive data will certainly help us to fast-track further evaluation of the Lassedalen fluorspar project at a time when fluorspar spot prices are rising strongly”.

Tristel (TSTL 44.5p / £17.79m)
Further to our article last week, where we announced that the AIM listed manufacturer of infection control, contamination control and hygiene products, had received approval for its Wipes System in Australia and Hong Kong as part of its continued geographic expansion, this week brings news that the Company has received an administrative licence that will enable the use of its Stella decontamination system in China.
Stella is a sophisticated micro-processor controlled tray in which medical instruments are immersed in Tristel’s chlorine dioxide disinfectant and offers significantly reduced costs when compared to endoscope washers. Having received regulatory approval for Stella last autumn, receipt of this licence enables use of the system in hospitals, with the Company’s China subsidiary, Shanghai Stella Medical Equipment Co. Ltd., having appointed six distributors and purchased 30 units for training and evaluation. Tristel has already sold 63 Stella units in the United Kingdom, Belgium, Spain, Ireland, Italy, Dubai, New Zealand and Germany, and this new license could pave the way for a leap in sales going forwards.

Zeta Compliance Group (ZCGP 50.5p / £4.43m)*
Zeta yesterday announced its final results for the year ended 31 January 2011. It increased revenue by 28.0 per cent to £2,983,523, increased EBITDA by 37.3 per cent to £653,209, excluding new initiatives, namely the acquisition of the Fire Strategy Company and instigation of a Carbon Reduction service. Ongoing development of ZetaSafe 2.0 continued, with a release set for late in 2011 and an Operations Director was recruited, David Downer. Zeta Chairman, John Caines, commented: “2010-11 was a year of achieving growth and profitability.  The  impressive  growth  and profitability  of  the services business has been achieved by the continuing  excellence  and dedication of its staff and executives at all levels.” The Company announced it maiden dividend of 0.5p per share to be paid subject to ratification at this year’s AGM. An objective of the Company is to make regular returns to shareholders provided that neither liquidity nor the capacity to invest in the future is practically impaired. Zeta has an impressive list of blue chip clients, and we expect to see further news for Zeta as its client list grows and contracted revenues increase, and as the Law surrounding this area, business productivity issues and brand protection drive clients to Zeta.

Zytronic (ZYT 219p / £32.21m)
AIM listed specialist manufacturer of internationally award-winning touch sensor products, announced interim results for the 6 months to 31 March 2011. Positive results were recorded, with an 11 per cent growth in revenue to £9.1m (2010: £8.2m) and a 19 per cent increase in profit before tax to £1.3m (2010: £1.1m). Other significant events during the period include the appointment of a new Chairman, Tudor Davies, and a growth in sales of the Group’s touch sensor products which now represents 66 per cent (2010: 56 per cent) of total revenues.
Zytronic’s leading touch sensor products are based upon its unique projected capacitive technology (PCT), which is similar to the technologies used on the iPhone, but PCT provides better durability and stability and works better on large screens (min 6” screen). Applications of this technology takes a variety of forms, and in particular the period has seen growth in the supply of touch sensors for Coca Cola Freestyle™ vending machines, to Bosch und Siemens Hausgerate for its new Gaggenau induction cook top, and increased supply for Digital Signage applications and the Gaming/Entertainment market. Wider geographical spread of sales is also being achieved, partly due to an increase in sales via Value Added Resellers (from 27 per cent to 35 per cent).
With increasing acceptance of touch sensors across an expanding number of geographic regions and applications, the Company believes this will provide a good platform for continuing growth and shareholder value.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

10 May 2011

This week: A growing Network, More solutions for Plethora, Top publication for Summit, Tristel wipes up and Zeta keeps taps running.

Altona Energy (ANR 11.12p / £46.89m)
Altona Energy, the Australia-based energy company, announced that it has entered into a cooperation agreement with US-based clean energy company, Rentech Inc (RTK), owner of proprietary technologies for the Fischer-Tropsch Process* (FT) and the gasification of biomass to produce synthesis gas. The agreement includes working together to evaluate coal and biomass gasification projects for the application of Rentech’s technologies in South Australia, where the Arckaringa project is located. The Arckaringa project is a joint venture between Altona and CNOOC-NEIA (a subsidiary of Chinese oil major CNOOC) to evaluate the development of the estimated 7.8 bn ton Arckaringa resource (of which 1.287 bn tons is JORC compliant). The current base case for the Arckaringa bankable feasibility study is a 10m barrel per year coal-to-liquids plant (applying the FT process) and 560MW co-generation export power facility.
*The Fischer–Tropsch process (or Fischer–Tropsch Synthesis) is a set of chemical reactions that convert a mixture of carbon monoxide and hydrogen into liquid hydrocarbons. The process, a key component of gas to liquids technology, produces a petroleum substitute, typically from coal, natural gas, or biomass for use as synthetic lubrication oil and as synthetic fuel.

Angel Biotech (ABH 0.38p /£10.20m)*
AIM listed biopharmaceutical contract manufacturer recently announced an extension to the current contract with Pathfinder Cell Therapy, a company based in Massachusetts, USA. The extended contract reinforces Pathfinder Cell Therapy’s commitment to the long term development of the Pathfinder Cell Platform and its use as a novel cell therapy in regenerative medicine.  The market looks forward to further comment on how Angel progresses as it adds the extra capacity it needs at the GMP manufacturing facility in Cramlington that it has recently taken a fifteen year lease on.

Berkeley Mineral (BMR 6.35p / £54.78m)
The mining tailings company announce the signing of a MoU with a Zambian-registered mining and investment company, Ng’wena Mining Resources Ltd. As part of this deal Berkeley will subscribe for shares such that it becomes a 76 per cent shareholder in Pine Works Ltd, a subsidiary of Ng’wena. Pine Works operates in a very similar space to Berkeley, and is currently in the process of acquiring three copper tailings dumps: Old Dam, Chonga Dam and Akatiti Dam, containing tailings from the copper mine at Luanshya in Zambia some 145km (90 miles) from Berkeley’s interests. A consideration of $6m is payable for 76 per cent of Pine Works, which had commissioned a competent persons report in 2008 detailing that the Dams contained SAMREC- and JORC- Indicated resources of 162Mt of tailings material at a copper grade of 0.24 per cent in total containing 380,700 tons of copper metal. The Company believes the MOU should lead to it securing a major resource of copper in the same region of Zambia, and to it becoming a major supplier of base metals.

Bglobal (BGBL 22.5p / £22.43m)
AIM listed provider of smart energy solutions and services to the UK energy market provided a trading update for the 12 months to 31 March 2011. The Company has been profitable and cash generative and has performed slightly ahead of market expectations during the period, though it is revising its meter installations expectations for the current financial year downwards, which is believed could impact the contribution to Group performance in fiscal 2012. In recognition of this, steps have been taken to reduce the cost base within Bglobal Metering and changes have been made that are estimated to generate annual savings of £1m. Whilst meter installations are anticipated to be lower in the next financial year, Utiligroup, the supplier of software and services to the utility sector in Europe and Australia, traded ahead of expectations during the period, which is hoped will continue going forwards, having identified a number of opportunities in data services and which they are actively marketing towards.

Borders & Southern Petroleum (BOR 62.25p / £266.79m)
The Company has announced that it has signed a new rig contract with Ocean Rig UDW Inc. for the provision of mobile drilling rig services using the Leiv Eiriksson drilling unit. This replaces the previous contract for Ocean Rig’s Eirik Raude drilling unit, a change which is mutually beneficial to both companies. The Leiv Eiriksson is the sister vessel of the Eirik Raude. It is a fifth generation, harsh environment, dynamically positioned semi-submersible. It has recently upgraded its Blowout Preventer to include Casing Shear rams, which gives superior capabilities in the instance of a well control event or emergency disconnect. The vessel is likely to be mobilised to the Falkland Islands in October 2011 following the completion of its operations in Greenland. The arrival of the rig and subsequent spud date for BOR’s first well is likely to be in December of this year.

Cove Energy (COV 89p / £436.99m)
The upstream oil and gas company announced that extensive conventional coring programme of the three gas bearing reservoirs was successfully completed at the Windjammer discovery well site at the Rovuma Offshore Area 1, Mozambique. The Company also reports: the Belford Dolphin drillship is now at the Lagosta discovery well site to continue the coring programme, after which the rig will drill the Barquentine 2 appraisal well; the deployment of a second drillship, the Deepwater Millennium, scheduled to commence operations in Q4 2011; 1,600 sq kms of 3D seismic survey completed over a potential “oil source kitchen” in the southern licence area, with initial results expected in Q3 2011; additional 3D seismic survey ongoing over the northern licence area between the Barquentine discovery and the Tanzania border; and acceleration of the exploration programme for Kenya offshore deepwater blocks, with 3,517 sq kms of 3D seismic acquisition to commence in mid-May.

Encore Oil (EO.  100.25p / £293.43m)
AIM listed oil and gas Exploration Company announced that the Cladhan appraisal well, which is located 225 miles north of Aberdeen, has been drilled to a total measured depth of 15,900 feet. The drill was undertaken to explore the Upper Jurassic sands, approximately 1,000 feet deeper than the drilled well and has encountered two separate reservoir intervals with a gross True Vertical Thickness of 12 feet and 169 feet. Although hydrocarbon shows were encountered in both reservoirs, the sandstones have an average porosity of less than 10 per cent and it has not been possible to confirm if the sands are hydrocarbon bearing and in pressure communication with the original Cladhan discovery. Upon completion of the drill, the Transocean Prospect semi-submersible rig will commence a second side-track well, 210/30a-4y which will drill into the shallower, central channel to the South, which is expected to take approximately 25 to 30 days to complete. The Company believes that whilst the location of the oil water contact has not been clearly discovered, the drill has resulted in a better understanding of the of the nature of any reservoir development in the down-dip ‘fan’ area of Cladhan and determining that there does appear to be an element of porosity degradation related to depth as well as the nature of the depositional environment.

Equatorial Palm Oil (PAL 22.38p / £27.91m)
AIM listed palm oil Development Company with operations in Liberia announced this week the inauguration of Liberia’s first palm oil mill by the President of Liberia together with commencement of Crude Palm Oil sales. The US$3m mill was opened following eight months of construction and testing. The chairman commented that these represent: “two important milestones for the company as it continues with its development plans to become a significant palm oil producer in the West African region.” The company will provide a further update in its statement of results for the year ended 31 December 2010 expected to be announced at the end of this month.

Herencia Resources (HER 3.15p / £39.72m)
In a fresh project update this Northern Chilean miner reports assay results from three of the first six diamond drill holes at the Doris target.  The results confirm presence of copper and silver with one sample showing 0.6m of 1.09 percent copper and 51g/t silver.  Results from a further four drill holes are expected over the next month.  Assay results are also due in June from the recent drilling of five holes at the La Rosa prospect where there is some indication of a porphyry system.  A possible new target area has been identified at Patricia where two drill holes have intersected a narrow base metal sulphide mineralisation.
Meanwhile feasibility work is being progressed, including metallurgical test work and planning for access road options.  As soon as permitting is finalised, infill drilling of the Patricia Mineral Resource Estimate will commence.  Finally, Herencia is reviewing the final draft documentation regarding the proposed Copper-Gold Joint Venture and expects to have it signed in the next three weeks.

Juridica Investments (JIL 104.5p / £109.41m)
Juridica, a leading provider of capital to the business community and legal market, this week announced its final results for the year ended 31 December 2010. The Company launched its fund in December 2007 and invests directly and indirectly in a diversified portfolio of business-to-business commercial claims and disputes in the United States and United Kingdom.  During 2010 the company received cash proceeds totalling approximately $6.6m relating to four investments and at the year end had a reported net asset value of $195m, a small reduction from the 2009 net asset value. The Company’s investment manager expects that the portfolio will see significant activity within the next 6 to 18 months and that cases potentially completing in the next 6 to 18 months each has the potential to generate substantial returns.

ImmuPharma (IMM 85p / £69.3m)
The specialist discovery and development pharmaceutical company announced the publication of its paper entitled: “A Simple Approach to Cancer Therapy Afforded by Multivalent Pseudopeptides That Target Cell-Surface Nucleoproteins” as the cover story of Cancer Research, the medical journal of the American Association for Cancer Research. The compound IPP-204106 (referred to in the paper as “N6L”) has been found to inhibit growth of several tumour cell lines, xenograft models and blocks angiogenesis. It rapidly localizes selectively in tumour tissue and promotes apoptosis. It also has a novel mechanism of action, acting on nucleophosmin and nucleolin. The drug candidate is currently in a phase I/II clinical trial in cancer patients in France.

Lipoxen (LPX 9.62p / £17.06m)
AIM listed bio-pharmaceutical company specialising in the development of high-value differentiated biologicals, vaccines and siRNA delivery, recently announced that it received a US$100,000 Grand Challenges Explorations Grant for Ground-Breaking Research in Global Health and Development. This is an initiative funded by the Bill & Melinda Gates Foundation. Dr David Moss, Director of Project Management at Lipoxen, will pursue an innovative global health and development research project, titled “Development of a non-live liposomal polio vaccine”. Grand Challenges Explorations funds scientists and researchers worldwide to explore ideas that can break the mould in how we solve persistent global health and development challenges. Lipoxen’s technology platform generates a large number of opportunities with each having a decent shot at returning considerable revenue streams to the company, a point that is still not reflected in the current pricing of the company.

Network Group Holdings (NGH 24.5p / £17.77m)
Network Group Holdings, the recruitment business operating in a number of niche industry sectors, last week announced its preliminary results for the year ended 31 December 2010 together with details of three acquisitions it has made over recent weeks.
The Company experienced improved market conditions resulting in increased profit before tax before other items for the year of £1.9m compared to £0.8m in the previous year.  The cost reductions that were implemented during 2009 were largely maintained through 2010 and together with the improvement in the business environment this has resulted in a much improved operating profit performance for the year. Group revenue was steady at £50m.
All three acquisitions have been funded from internal resources. The CEO commented that the acquisitions demonstrate the continued focus on delivering growth for the Company by acquisition as well as investing in organic growth. The three companies operate in markets that complement the Company’s existing operations and have a presence in sectors that the Company has identified as offering exciting opportunities.

Ormonde Mining (ORM 10.125p / £29.84m)
The mineral development and exploration Company announced it has selected Jacobs Engineering Group Inc, to carry out a Cost and Definition Study for the Process Plant and associated surface infrastructure for the Barruecopardo Tungsten Project in Salamanca, Spain. This study will be a key component in the preparation of the Definitive Feasibility Study for the Project which Jacobs will also co-ordinate. Initial results from the current metallurgical test work programme have demonstrated that a coarser crushed product size of -5mm (originally -3mm) will achieve liberation of the scheelite (the main tungsten bearing mineral) further simplifying the process plant flow sheet and leading to cost savings. At this coarser crushed product size, pilot plant test work is confirming pre-concentrate grades and recoveries achieved in the earlier test work programmes.

Plethora Solutions Holdings (PLE 7.38p / £4.85m)*
AIM listed UK-based speciality pharmaceutical company, recently announced that its subsidiary, The Urology Company Limited has entered into an agreement with North-51 Limited for the provision of a contract sales force. North-51 is a leading UK pharmaceutical consultancy with a contract sales division.  Under the agreement North-51 will provide sales representatives to The Urology Company to complement its own sales force. North-51’s representatives are available immediately to The Urology Company and will therefore be able to contribute to first half sales and the results for the year as a whole. Immediately following the contract becoming effective, The Urology Company will have the initial geographic reach to market its products to the majority of the UK prescribers in all the major conurbations. This strategy enables Plethora to expand on a flexible basis.  Plethora is well funded and we believe will continue to provide good news flow in the short and medium term.

SeaEnergy (SEA  39.62p / £27.39m)
AIM listed offshore wind energy company announced that it has reached agreement with a consortium of major European energy companies to grant a period of exclusivity to negotiate the sale  of  SeaEnergy’s 80.13 per cent interest in its subsidiary SeaEnergy Renewables Limited. Due diligence is already in progress and negotiations are at an advanced stage. If the transaction is successful, a general meeting would be convened to obtain shareholder approval of the transaction with the intention of completing the transaction at the end of June. A member of the Consortium has agreed to advance loan facilities to assist SeaEnergy and these loans would be repayable out of the proceeds of any sale. Also SeaEnergy has further extended to the terms of an existing loan facility with LC Capital Master Fund, Ltd until earlier than the 30th June 2011 or completion of the transaction. £370,000 remains to be drawn of the £4.3m facility provided by LC.

Sirius Minerals (SXX 10.75p/£111.0m)
The globally diversified potash group has announced that the Company is in receipt of the results of seismic interpretation work conducted by RPS Boyd PetroSearch (Boyd) in relation to its Canning Basin Project in Western Australia. Data reviewed include existing and newly acquired 2D seismic data as well as original exploration data gathered by Rio Tinto Exploration during 2008 and 2009. The findings include: overall Mallowa Salts are continuous with minimal disturbance; salt mineralisation ranging from approximately 179 to 630 metres in thickness over a number of representative lines; salt mineralisation ranging from approximately 500 to 1,300 metres in depth; no evidence of major faulting within the tenements; and 5 potential drill targets identified overlying an estimated 379 to 610 metres of mineralised thickness. In addition, the Company has recently been notified that five exploration licences covering 1,236 sq kms of its current project area have been officially granted.

Summit Corporation (SUMM 3.75p / £6.31m)*
UK AIM listed drug discovery Company with a portfolio of drug programmes and an innovative Seglin technology platform for the discovery of new medicines last week announced that the efficacy data report on its drug candidate SMT C1100 for the treatment of Duchenne Muscular Dystrophy (DMD) has been accepted for publication in the leading peer reviewed scientific journal PLoS ONE. The publication highlights Summit’s small molecule drug candidate as a potential disease modifying treatment that would benefit all DMD patients, regardless of their specific genetic mutation. SMT C1100 boasts a compelling data package generated from a range of early studies, including those conducted in the ‘gold standard’ in vivo model.  Summit is seeking a new partner to financially support the continued development of this compound for what is a terribly sad disease. We look forward to Summit reporting results of ongoing studies involving the use of Seglin based technologies.

Syntopix (SYN 49.5p / £5.3m)
Syntopix, the speciality pharmaceutical research and development Company focused on topical antimicrobial innovations for products in the medicine and consumer healthcare markets, this week announced an acquisition and a £2m placing to fund the acquisition and provide additional working capital.  The Company is acquiring the Leeds Skin Centre for Applied Research Limited for a total consideration of £900,000 payable broadly one-third in cash and two-thirds in new Syntopix shares. A key attraction was Leeds Skin’s world leading LabSkin technology, a unique human equivalent skin which we can use to model various properties associated with human skin (anti-inflammatory, anti-ageing etc.). The CEO of the Company explained: “the acquisition of Leeds Skin is a pivotal acquisition for Syntopix. The significant cell biology experience of Leeds Skin will complement our own microbiological experience, aiding development of Syntopix products.”

Tarsus (TRS 152p / £114.41m)
Tarsus, the international business-to-business media group, provided an interim management statement in which it announced that trading and forward bookings remain in line with expectations. In the US, the medical division has demonstrated good growth (revenues growing at a double digit rate), driven by educational content now featuring online capabilities, whilst the emerging markets exhibited strong revenue growth having held a number of events in the Middle East with attendances well ahead.  The Company indicated that M&A opportunities which meet their criteria have increased somewhat, whilst exhibition activity has picked up also. Revenue in this business is second half weighted, with forward bookings now standing at 75 per cent of anticipated full year revenues compared with 67 per cent at the same time in 2010.

Tristel (TSTL 43p / £17.19m)
AIM listed manufacturer of infection control, contamination control and hygiene products, announced that it now has regulatory approval for the Tristel Wipes System in Australia and Hong Kong. Approval from the Therapeutic Goods Association (TGA), the body that regulates disinfectant use in Australia, and Hong Kong’s Disinfectant & Sterilant Assessment Committee (DSAC), is a key step in growing the Tristel product range internationally, providing the organic growth the Company has budgeted for. Tristel expects to gain approval for use of the wipes in Germany and China over the coming months. Tristel’s chlorine dioxide-based wipes are a highly effective, cost efficient and safe decontamination product for the small flexible endoscopes commonly used in the Ear, Nose and Throat departments found in all hospitals worldwide.  Tristel also announced the signing of an agreement with Tytex Ltd to distribute Tristel products to New Zealand healthcare market, which is made up of 43 public and 35 private hospitals- currently, through its single handed efforts, the Company has sold into 21 of the smaller private hospitals and it is hoped the new distributor will help target the balance. Discussions with an Australian distributor are likely to conclude shortly, which will help penetrate a market incorporating 750 public and 290 private hospitals.

Vatukoula Gold Mines (VGM 133 p / £111.32m)
AIM listed gold producer this morning reported positive results from the recent reverse circulation and diamond drilling programme at the Company’s 100 per cent owned Vatukoula Gold Mine in Fiji. The share was up a few per cent in early trading on the news. The holes completed to date confirm the presence of multiple mineralised structures along strike from previously mined areas. The results of this programme, in conjunction with the historical information are to be compiled with the intention to produce an initial 43-101 compliant resource. Drilling has also commenced on the first of the Prospecting Lease Targets, which is roughly 4 km north east of the current mine workings. David Paxton, CEO of Vatukoula Gold Mines, commented: “We are very encouraged by the initial results from the drilling programme, which show further mineralisation close to surface and possible down dip and along strike extensions of the Vatukoula ore bodies. Our focus remains on developing the exploration potential of the mine to expand current production and we look forward to reporting additional drill results…Vatukoula is a world class gold deposit, with over 7 million ounces of gold produced to date, and a further 3.9 million ounces in Resources.”

Victoria Oil & Gas (VOG 5.71p / £120.14m)
AIM quoted oil and gas Company is pleased to announce the award  of an Exploitation Licence for development of the Logbaba gas and gas condensate field in Douala, Cameroon. The exploitation rights cover the entire 20 sq km development area applied for by VOG and extend for 25 years with an option to add a further 10 years.  Following extensive due diligence, Rodeo Development Limited, a wholly owned subsidiary of VOG, has received confirmation that Decree No 2011/112, has awarded exploitation rights to and appointing them as operator of the Logbaba Concession. Under the terms of the Logbaba Concession Agreement, Societe National des Hydrocarbures will exercise its right to participate in the Logbaba Concession, and will pay its share of development costs, under the following revised ownership structure: Victoria Oil and Gas 57 per cent, RSM Production Corporation 38 per cent and Societe National des Hydrocarbures 5 per cent. Kevin Foo, VOG Chairman, comments: “This is the news we have been waiting for. We have worked intensely and productively over many months with the Ministry of Industry, Mines & Technology, SNH and the offices of the President of Cameroon to make this happen. We welcome SNH as our partner and are pleased with its endorsement of the project. We now intend to deliver first gas to industrial customers in Douala in Q4 2011 and to build on our customer base.”

Zeta Compliance Group (ZCGP 50.5p/£4.43m)*
PLUS listed Zeta last week announced that its subsidiary, Zeta Compliance Services Ltd, has been awarded a follow on project to provide water hygiene surveys for in excess of 700 banks for one of the four major high street banks via its Managing Contractor. The value of the engagement is just over £200,000 and this should all fall in the year 2011 from an accounting perspective.  Zeta also announced the continued investment in its sales and marketing resources via the employment of three new sales people who started last week to deliver the growth plans for 2011 and beyond.  We are impressed by Zeta’s list of blue chip clients, which includes a host of high street chains, banks, universities, hospitals, and facilities management companies. All businesses have to comply with Health and Safety Laws, and there are a multitude of statutory regulations in the water, fire and gas space, to name but a few. We expect to see further news for Zeta as its client list grows and contracted revenues increase, and as the Law surrounding this area, business productivity issues and brand protection drive clients to Zeta.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.

03 May 2011

This week: Joint Venture to Monitise APAC business, Nasstar on a cloud and Poptastic! Dave Cash launches on One Media

African Eagle (AFE 11.8p/£48.1m)
African Eagle Resources, a mineral exploration and development company, has announced that it has executed a farm-in agreement with BrightStar Resources Ltd (BUT) over the Company’s Miyabi Gold Project in Tanzania, under the terms of which BUT will expend $3m in 30 months to earn 50 per cent. A minimum expenditure of $1m is required of BrightStar within the first 12 months. BrightStar can actually earn 75 per cent by sole funding and completing a feasibility study.

Angel Biotech (ABH 0.36p / £9.77m)*
AIM listed Angel last week commented on the announcement in the press regarding an ongoing European legal case concerning the patentability of human embryonic stem cells. A legal opinion has been given by the advocate-general of the European Court of Justice (ECJ) that patent claims involving human embryonic stem cells should not be allowed. The ECJ is due to decide over the coming months whether to uphold this legal opinion in their ruling on the case. Angel wishes to state that the majority of work currently ongoing at Angel, and the work that the Company is seeking to secure in the future, is based on the use of adult stem cells. Also many of the programs are autologous in nature where the patients’ own cells are used for the clinical procedure. Neither of these technologies is affected by the EU opinion. Dr Paul Harper, Chairman of Angel, said: “We believe that the significant market opportunity for the cell therapy services we offer will be derived in North America and this will not be affected by this ruling.” Angel recently secured a fifteen year lease, with an option to break after five years, on a GMP manufacturing facility in Cramlington, near Newcastle upon Tyne. The facility, which the Company knows well, will increase Angel’s manufacturing capacity approximately five-fold when re-commissioned and will be unaffected by the issues discussed in the ongoing debate surrounding human embryonic stem cells in Europe. The Board expects the facility to be operational before the end of 2011. The market looks forward to further comment on how Angel progresses as it adds the extra capacity it needs.

Anglesey Mining (AYM 79.5p/£125.74m)
Iron ore miner Anglesey announced that its 33 per cent owned associate Labrador Mines has completed an equity raise of C$110m. Labrador Mines is a project in Schefferville, Quebec and is involved in the development of twenty direct shipping ore deposits in western Labrador and north-eastern Quebec. The substantial amount raised will be used for upgrades to and expansion of the Silver Yards plant, for payments under the recently announced rail transportation agreements, for exploration and development of mineral projects, and for general corporate and working capital purposes. Labrador Mines also announced an agreement with Western Labrador Rail Services to operate the newly constructed six kilometer railway which connects LIM’s Silver Yards processing facility in western Labrador to the main Schefferville to Emeril Junction rail line. WLRS will also provide, operate and maintain up to five SD 40-3 locomotives which will be used to haul LIM’s iron ore from Silver Yards, over Tshiuetin Rail Transportation’s privately owned railway, to Emeril Junction. Both pieces of news demonstrate the sound progress being made, which could generate significant value for Anglesey.

Atlantic Coal (ATC 0.66p/£25.73m)
Atlantic Coal, the open cast coal production and processing company with activities in Pennsylvania, USA, has ordered a second Liebherr R9250 19-yard bucket hydraulic excavator at a cost of $3.75m, funded through a conventional lease purchase agreement. This second machine will enable the Company to continue to increase the run-of-mine (ROM) production profile at its Stockton Colliery which produces anthracite. The first Liebherr, purchased in 2010, saw over 120,000 tons of ROM coal produced and almost 660,000 tons of overburden removed during the quarter. The second machine, due at Stockton by the end of 2011, will significantly enhance excavation capacity and facilitate the increase of ROM coal to the wash plant and is planned to be operational by Q1 2012. The Company remains on target to produce its estimated 450,000-500,000 ROM tons per annum.

Axis-Shield (ASD 312p / £155.99m)
Axis Shield, the international and innovative in vitro diagnostics (IVD) company, recently welcomed the publication of a new study into the use of Active-B12, the Company’s patented novel marker for improved detection of vitamin B12 deficiency. Published in the journal Clinical Chemistry, the study highlights the relevance of the measurement of Active-B12 or holotranscobalamin (holoTC), as the biologically available component of vitamin B12 and supports the use of holoTC as the first-line diagnostic procedure for vitamin B12 status.

Beowulf Mining (BEM 48p / £76.7m)
Beowulf, the AIM and Aktietorget traded mineral exploration company which owns several exploration projects in Sweden, is pleased to announce that 1,850 metres of its total planned 3,500 metres drilling programme on its Kallak South deposit has now been completed. The Company successfully completed a similar programme to outline its Kallak North deposit in August 2010 and, together, the two deposits form its Kallak Iron Ore Project. The Kallak South drill programme comprises a total of 32 holes to be drilled in a grid pattern of twelve drill profiles in an E-W direction at 200 metres spacing covering the N-S extension of the deposit as noted from ground magnetic data. Drilling commenced in late 2010, but was temporarily disrupted by unexpected severe winter weather conditions. Drilling is now progressing on schedule with the programme expected to be completed by the end of Q2 2011. The drill holes completed to date have tested approximately 1,500 metres of the extension of the Kallak South deposit, which from detailed ground magnetic data is indicated to extend in a N-S direction over 2,400 metres in length with a maximum width of 400 metres in its central zone. Assay results for the seven recently completed drill holes are expected to be received in May 2011. Based on the initial drilling results and measured size of the detailed ground magnetic anomaly, the deposit is estimated to contain more than 400 million tonnes of iron ore.

Blue Star Capital (BLU 3.75p/£5.63m)
Blue Star Capital, the Homeland Security- focused investment Company, last week announced its results for the year ended 30 September 2010 together with new debt funding from existing shareholders. The company explained that the purpose of the shareholder loan is to allow it sufficient time to conduct a full review of its strategy, including board composition, investing policy, supplementary revenue streams and realisation of its assets in the most advantageous way.    These shareholders have agreed to lend the company £400,000 immediately with a commitment to lend a further £350,000 if required by the company; they are also receiving warrants. The company’s assets were valued at approximately £2.7m at 30 September 2010.

EnCore Oil (EO. 116.25p / £340.3m)
EnCore has decided to spin out the exploration assets into a subsidiary company called XEO Exploration plc.  Admission to AIM is expected around the end of May pending regulatory approvals and an institutional placing.  EnCore shareholders will be offered participation in the fundraising at the institutional placing price and EnCore’s ultimate holding will be dependent on the amount of funds raised.  EnCore’s assets to be transferred to XEO include stakes in the Hoylake, Tudor Rose, Spaniards and Merrow prospects plus options to acquire additional licences.  The spin out is done to shield EnCore’s more mature development stage assets Catcher and Cladhan from the higher risk, high impact exploration assets.  Existing shareholders will receive a prospectus towards the end of the month.

Faroe Petroleum (FPM 176p / £373.8m)
Faroe Petroleum, the independent oil and gas company focusing principally on exploration, appraisal and production opportunities in the Atlantic margin, the North Sea and Norway, is pleased to announce the 21st Norwegian Licence Round award of its second licence in the Norwegian Barents Sea, as announced by the Norwegian Ministry of Petroleum and Energy. The new licence covers an area of approximately 2100 square kilometres. This is the largest single licence awarded within the Barents Sea in this round. The main Kvalross Prospect consists of a wedge of clinoforms contained within a large structural closure. This new licence area is located to the east of the recent significant Statoil discovery, Skrugard, and immediately adjacent to Faroe Petroleum’s Samson Dome licence, which has now completed the acquisition and processing of an extensive 3D seismic survey. The new licence partners are Faroe Petroleum (40 per cent), together with Wintershall (40 per cent and operator) and Petoro (20 Per cent).  The licence work programme involves the acquisition of 3D seismic  data, with  a decision  to drill  to be taken within three years.

Fusion IP (FIP 26.5p / £14.37m)*
AIM listed university IP Commercialisation Company that turns world-class research into business recently reported that its portfolio company, Magnomatics, the developer of a revolutionary magnetic gear system, has won the prestigious 2011 NDI Innovation and Technology Award for its system which is capable of delivering industrial levels of torque and power. Fusion has a number of exciting companies in its portfolio that is rapidly progressing towards important milestones that should result in increased valuations.

Herencia Resources (HER 3.225p / £40.7m)
The Northern Chilean miner has given an update from its Paguanta Project including reports that drilling at Doris has been completed with first assays from ten holes anticipated in early May.  Also, drilling of up to five holes at the La Rosa porphyry-copper target has commenced while in-fill drilling at Patricia is about to start this quarter.  Regarding the potential new iron-oxide copper-gold system project mentioned a few weeks ago, we learn that the parties expect to be in a position to execute documentation shortly.

Max Petroleum (MXP 17p/£156.9m)
Max Petroleum an oil and gas exploration and development company focused on Kazakhstan has entered into a contract with Saipem, a subsidiary of Eni S.p.A. for a National 1625 DE onshore drilling rig for its deep, pre-salt exploration programme. The contract secures the use of the 3,000 horse power rig to drill a minimum of two deep wells in the Company’s Blocks A&E license area. MXP plans to commence drilling the NUR-1 well on the Emba prospect in Block E during August, targeting unrisked mean resource potential of 467 million barrels of oil equivalent (mmboe) distributed over a probable range of 170 to 817 mmboe with a 29 per cent geological chance of success.
The Company has also announced that it has started drilling the ZMA-ET2 appraisal well with the objective to further extend Triassic production and reserves in the Zhana Makat Field on Block E. The total well depth will be 1,500 metres.

Monitise (MONI 25p/£175.60m)
Monitise, which provides end-to-end solutions that enable banks and their customers to undertake banking transactions via mobile phones, announced a joint venture with Joint Electronic Teller Services Limited (JETCO) to launch a Mobile Prepaid Top-Up service in Hong Kong. This marks growth of the Monitise business into the Asia Pacific region and, with around half of all Hong Kong mobile users currently using pre-paid, could represent a rapidly growing territory for Monitise. Further updates regarding new partnerships and services in the mobile network operator space in Hong Kong are expected to be announced by the Company soon.

Nasstar (NASA 11.12p/£3.98m)
Nasstar, which provides hosted desktop and hosted exchange cloud computing services, last week, announced its interim results for the six months ended 31 March 2011. The company reported an increased EBITDA of £151,000 (despite incurring one-off costs on recruitment and an ISO 27001 consultancy and audit during the period) on turnover of £1.61m. Sales activity has been encouraging with a number of the company’s partners now increasing their Hosted Desktop subscription every month. This has been reflected to date in a 36 per cent. increase in Hosted Desktop subscribers to 1,866 (from 1,370 subscribers at 31 March 2010) and the company is confident that its partners will be able to win even more new business in the second half of the year.

Nighthawk (HAWK 7p / £26.47m)
Nighthawk Energy, the US-focused oil development and production company, announced that a reserves and resource report on the Jolly Ranch Project had been completed by Gaffney, Cline and Associates. The study required that probable resources (2P) have been limited in scope to wells designed to recover 20,000 barrels or more, with a total of 55,000 barrels being estimated, whilst proved resources (1P) came in with an estimate of 24,000 barrels and at the possible level (3P) there are 128,000 of estimated liquids. The Company announced that whilst it believes these initial reserve numbers are low this merely reflects the fact they are in the early days of developing the Jolly Ranch shale project, and that additional work will need to be conducted.

One Media Publishing Group (OMPP 3p / £1.3m)*
PLUS quoted consolidators and acquirers of music and video content again announced another deal, that it has exclusively retained the services of Dave Cash, the 60’s Pirate Radio London and BBC DJ. One Media is launching The Dave Cash Collection of over 1,000 albums, which will be available for purchase on all major digital downloading stores from the 9th of May 2011, containing the hits from the last six decades and every genre of music plus rare recordings and live performances. One Media recently put out a great set of results and certainly knows how to do deals in its space; we believe it will continue to build its portfolio.

Pinewood Shepperton (PWS 210p/£97.1m)
Last week the board of directors of Pinewood recommended a cash offer to acquire Pinewood made by a newly incorporated subsidiary of Peel Group at 200p per share. The offer represents a premium of 22.1 per cent. to the 165.9p share price on 7 April (the day immediately before the company entered into an offer period). Peel Group itself holds 29.78 per cent. of the company; in addition the activist investor, Crystal Amber, which holds 28.91 per cent of the company has undertaken to vote in favour of the offer.

Plethora Solutions Holdings (PLE 7.75p / £5.09m)*
UK-based speciality pharmaceutical company recently announced that its subsidiary, The Urology Company Limited, has received notification that Hyalofemme, a treatment for vaginal dryness, has been granted approval by the UK NHS Business Services Authority for reimbursement under an NHS prescription. This allows, for the first time, a doctor in the UK to write an NHS prescription for Hyalofemme to treat patients suffering from atrophic vaginitis.  As announced by the Company in December 2010, in an international study, Hyalofemme was found to be as effective as a leading hormonal preparation. This information was submitted to the NHS Business Services Authority in determining the approval. Bill Robinson, Chairman, Plethora said: “Today’s news follows the agreement with a leading retail pharmacy to carry an own label version of this product in December. We believe that Hyalofemme will be an important treatment for atrophic vaginitis and the NHS’s decision should enable the large numbers of patients to access this effective remedy. This decision should increase the commercial value of our pipeline by exploiting products secured last year.” The Hyalofemme news is important as this opens up a significant additional UK market segment for the product as it can now easily be prescribed by a doctor (GP or specialist) and reimbursed by the NHS.  It also means that the product will become part of the bag that the reps can market and so the promotion is not just DTC (direct-to-consumer).  The route for commercialisation has three legs:  Retail Key Account management – retail pharmacy/healthcare groups; 2. DTC; and 3. Professional – doctors, nurses and other healthcare professionals.  The product will be listed in the NHS “Drug Tariff” as of 1 July and so can be prescribed from that point.  However Plethora has started the professional marketing campaign now.
Plethora also announced that all resolutions were duly passed at the General Meeting of the Company held in relation to a recent placing which raised £855,000 at a price of 7.5 pence per share. In addition, the Company entered into a loan facility of £400,000. It is anticipated that the proceeds of the Placing and Loan, being £1.255m in aggregate, will be used by the Company to expand UK sales and marketing presence; drive market penetration of existing products; and complete EU registration of Striant SR. Plethora is well funded and we believe will continue to provide good news flow in the short and medium term.

Sigma Capital Group (SGM 8p/£3.74m)
Sigma Capital, the specialist asset management and advisory group, last week announced its results for the year ended 31 December 2010. The year was described as challenging but that prospects for 2011 have significantly improved, underpinned by the work undertaken to refocus activities on venture capital fund management and property asset management. Its activities also include the commercialisation of university IP through its 46 per cent. interest in Aim listed Frontier IP. Revenues from services fell to £1.84m and losses widened; year end cash balances were £1.8m and net assets per share 11.1p.

Sunrise Resources (SRES 2.98p/£9.26m)
Sunrise Resources, a diversified mineral exploration and development specialist has given notice to extend its Option Agreement over the Long Lake Project in Canada for a second year, commencing May 4th. A payment of C$50,000 is being made to the property owner, Gordon Salo and 2.5m Share Warrants will be issued to Salo under the terms of the Option Agreement announced on May 5th 2010. The Company has already carried out sufficient exploration on the project to satisfy its expenditure obligations under the Option Agreement for the next 12 months. The Company is currently negotiating a drill contract for a further round of diamond drilling at the project, to start as soon as possible and will make an announcement when the start date is agreed.

Surgical Innovations Group (SUN 9.75p / £38.24m)
Designer and manufacturer of innovative medical devices recently announced its final results for the 12 months ending 31 December 2010. Revenue increased 55 per cent to £7.045m (2009: £4.541m), pre-tax profit increased 487 per cent to £1.549m (2009: £264,000), net cash of £2.2m was generated from operating activities, with a basic earnings per share of 0.48p (2009: 0.14p). Own brand sales increased 30 per cent to £3.852m (2009: £2.956m); driven by flagship Resposable products and OEM revenues increased 71 per cent to £2.506m (2009: £1.463m). Trading in the period since the year end has been encouraging, particularly from the core business, where further orders for SI branded products, particularly for YelloPort+plus, have been seen. Surgical Innovations remains confident about the future growth prospects of the business for the remainder of 2011 and further into 2012 and 2013 as new products are launched towards the end of this year and the increasing traction with OEM customers gains momentum. At an analyst meeting, the management team at Surgical Innovations talked about further growth in 2011 and a surge in growth thereafter. There was much excitement about the newish area of arthroscopy, and the buzz words were certainly innovation and commercialising ideas fast. We imagine that amongst all of this product development and the entering of new therapeutic areas, the Company will keep its eyes open for potential acquisition targets also.

Symphony Environmental Technologies (SYM 20.5p/£24.07m)
Symphony Environmental Technologies, the specialist in advanced plastics technologies including controlled life and anti-microbial products, has announced that its 25-year distribution agreement with its US distributor (announced 23rd February 2011) has come into full effect, following the first order of material quantity of d2w (proprietary additive) by Timothy Murtaugh (T/A Symphony Environmental USA). Following the implementation of the agreement, the distributor will now exclusively distribute and market the Company’s d2w and d2p additives in the USA. The agreement also appoints the distributor as SYM’s non-exclusive distributor of certain agreed finished products.
Michael Laurier, CEO, comments “we are delighted that our distribution agreement has come into full effect and launched our venture into the US market. We look forward to further building the Symphony brand in this vital and exciting market as well as creating more opportunities to showcase our d2w and d2p additives”.

Tower Resources (TRP 5.85p / £65.65m)
AIM listed African oil and gas exploration company announced that in Namibia, interpretation of the 3-D seismic is well advanced with initial conclusions delivered from all of the specialist consultants. Clear structural closure, sustained reservoir thickness and direct hydrocarbon indicators – amplitude versus offset anomalies and pock marks – have been confirmed at the main Maastrichtian prospect level.
In Uganda a letter of intent in advance of a contract for the 2-D seismic programme of 150-200 kms has been signed with TESLA-IMC International Limited and line clearance is expected to begin by late April. Completion is targeted for end June 2011, by which time a well location can be selected. A high density geochemical survey, conducted by GORE Geochemical Surveys, is also underway over the prospect area together with focussed sampling around the two existing wells and an oil-bearing well.

Transense Technologies (TRT 4.75p / £6.28m)*
AIM listed Transense recently announced the full commercial launch of its new iProbe multi-function tyre inspection tool.  Developed over a  long period by  its subsidiary Translogik and following consultation  with  potential  customers  as  to  their requirements, the iProbe provides wireless measurement of tread depth, tyre temperature and tyre pressure combined with  integrated  RFID  (Radio  Frequency Identification) tag and TPMS (Temperature Pressure Monitoring System) sensor reading capabilities. The  first  production  run  of  probes  has  been fully sold to customers which include  the  world’s  three  largest  tyre manufacturers. Additionally, several fleet  providers  around  the  world  have  purchased  the iProbe, and commenced software  integration work at  their expense to  integrate the iProbe with their systems. Graham Storey, CEO of Transense Technologies, commented: “We believe the iProbe is the ‘Swiss Army Knife’ of tyre inspection and audit tools. The potential market, while already significant, is set to grow rapidly as the requirement   to   collect   data electronically, accurately and efficiently increases”.  Knowing the management team and the opportunities that have to exist in the market place for this kind of technology, we expect Transense to deliver in the midterm.

Tristel (TSTL 40p / £15.99m)
Manufacturer of infection control, contamination control and hygiene products, provided a trading update in which it was announced that results for the second half of the year will be at least break even. A series of delays, including to that of the receipt of the license to sell Stella tray system in China and a delay in securing inclusion of Tristel’s Wipes System on Germany’s VAH listing (Association for Applied Hygiene), has contributed to this and will result in a substantial portion of revenues now falling into the next financial year. Further, Tristel’s planned expansion into the Pharmaceutical and Personal Care market with its “Crystel” range of disinfectants and cleaning products has had a slower start than anticipated though overall the Company has continued to invest in sales and manufacturing infrastructure and the second half result is, therefore, bearing a much enlarged cost base. Tristel expects that full year pre-tax profit should still be no less that £433,000.

ValiRx (VAL 0.71p / £7.42m)*
AIM listed life science Company with a focus on cancer diagnostics and therapeutics for personalised medicine recently announced that it has signed agreements with Imperial College and Oxford University to accelerate the development of its lead therapeutics VAL101 and VAL 201. Imperial College will carry out the late preclinical development of VAL101 with funding from the Eurostars scheme. The aim is to provide validation for the GeneICE clinical applications and validation for the use of GeneICE technology as a silencing tool, in which “rebellious genes”, which cause problems such as cancer and some neurological problems, are shut down or “put on ice”. The collaboration with Oxford University will look at late preclinical development of VAL201 to combat hormone refractory prostate cancer and also further indications of hormone induced unregulated growth. These conditions have a significant unmet clinical need and, if the collaboration is successful, VAL201 will have a large impact on the personalised therapeutic approach to oncology and unregulated growth. Imperial College and Oxford University are amongst the world’s most prestigious institutions to be carrying out drug development of this type. Further work will be carried out to support the regulatory requirements prior to entering clinical trials. All intellectual and commercial property rights from the work undertaken by both Oxford University and Imperial College will continue to be owned by ValiRx. We like the model of product on the market generating revenues in the test kits and the more blue sky upside that its proprietary drug development programmes provide in the technology platform. ValiRx is well funded, as well as focused, having recently raised £3.3m to accelerate the pre-clinical progress of its lead therapeutics VAL101 and 201; support the sales and marketing activities of its subsidiary, ValiMedix; develop the Company’s companion diagnostics for use in its therapeutic programs; and support the development and testing of its HPV diagnostic.

*A corporate client of Hybridan LLP

The Hybridan Small Cap Wrap is a weekly review of some of the most interesting small cap stories of the past week.  Our review will usually be of those companies whose market capitalisations are less than £50m although we may occasionally cover larger companies.