Small Cap Feast

Small Cap Feast – 18 June 2020

Dish of the Day:

Contango Holdings, CGO.L Admission to the Official List following the acquisition, by way of a reverse takeover, of a 70% interest in the Lubu Coalfield Project in Zimbabwe.   Lubu is a derisked development with total historical spend in excess $20 million and over 100 holes and 12,000m of drilling completed and Total resource in excess of 1 billion tonnes of coal . · Raised £1.4m with new and existing investors and now fully funded to first cash flow . Mkt Cap £10.8m.


Off the Menu:

No Leavers Today


What’s Cooking in the IPO Kitchen?

The pantry is bare!

Breakfast Buffet

Empire Metals 1.52p £2.9m (EEE.L)

Update on the proposed acquisition of a 58.6% interest in Munni Munni Pty Ltd, a subsidiary of ASX listed Artemis Resources Limited   and the beneficial owner of  a 70% interest in the Munni Munni Palladium Project in the West Pilbara, Western Australia. Following completion, Empire will hold a controlling 41% interest in Munni Munni, the largest unexploited primary PGE Resource in Australia.

  • All parties are working constructively with work continuing on a number of the conditions precedent
  • Commencement of a 13 hole, 1,820m Reverse Circulation (RC) drilling programme at Munni Munni in order to take advantage of the current drilling season
  • Munni Munni contains the largest intrusion in the West Pilbara and hosts a JORC-compliant 2004 Resource of 24Mt @ 2.9 g/t Platinum Group Element (PGE) and gold (12.4Mt Measured, 9.8Mt Indicated, and 1.4Mt Inferred), containing 1,140,000 ounces palladium; 830,000 ounces platinum; 152,000 ounces gold; and 76,000 ounces rhodium


Panther Metals 7.475p £3.64m (PALM.L)

Completion of its open-file desktop review of the wholly-owned Marrakai Gold Project, situated in the Northern Territory, Australia.  The Northern Territory has produced nearly 464 tonnes (t) or 14.9 million ounces (Moz) of gold (Au), and there are currently over 8,001 documented gold occurrences and a resource inventory of a further 530 t (17 Moz) Au.

Geological review highlights potential for further gold mineralisation within the Marrakai Project, with east and west portions of the tenement remaining completely untested.  · John’s Reef Gold Prospect contains visible gold, with high-grade rock chip assays varying from 30 g/t Au to 50.1 g/t Au.  · Chins Gully Gold Prospect contains visible gold, with up to 50 specks observed in panned concentrates.  · Historical drilling in the immediate vicinity of John’s Reef and Chin’s Gully provided near surface results including 2m @ 5.74 g/t and 2m @ 3.46 g/t Au.  · Project remains significantly underexplored with visible gold located in samples obtained from eastern and western flanks John’s Reef and Chin’s Gully.  · Two major exploration targets remain untested, represented by dykes of probable lamprophyric affinity, which can be hosts to gold mineralisation.


Corero Network Security 5.375p £26.6m (CNS.L)

Five new headline customer wins for its SmartWall ® DDoS protection products over the last two months, –including two new contract wins through its partner Juniper, totalling over $1.5 million over the course of the contracts.


Cora Gold 7.75p £14.8m (CORA.L)

US$21m mandate and term sheet with investment firm, Lionhead Capital Advisors Proprietary Limited (‘Lionhead’), to fund the future development of its flagship Sanankoro Gold Project in  Southern Mali.  This is conditional on, among other matters, the completion of a Definitive Feasibility Study  on the Project before the end of 2021.

  • US$21m Term Sheet to finance the development of Sanankoro on completion of a positive DFS o  US$6m Equity Financing

o  US$5m Convertible Loan Note o  US$10m Debt Financing

  • Term Sheet requires Cora to deliver a DFS with a minimum of: o  6 years mine life of 40,000 ozs/year gold production o  60% Internal Rate of Return (‘IRR’) based on a US$1,400/oz gold price
  • Sanankoro Scoping Study (January 2020, US$1,400/oz gold price) results: o  US$20.6m Pre-Production Capex o  +US$19m/year free cash flow and an 84% IRR o  45,000 ozs/year average production
  • Current focus remains on resource growth with a DFS planned during 2021


TP Group 7.75p £14.8m (TPG.L)

Subsidiary Sapienza Consulting has received a series of work orders under its framework contract with the European Space Agency (ESA), the extension of which was announced on 24 March 2020.

The work orders, worth approximately 18 million, cover tasks until the end of 2022 on a range ESA programmes at the European Space Technology Centre at Nordwijk in the Netherlands. Further work orders remain in discussion under the extended framework contract.


Avacta 138p £325m (AVCT.L)

Collaborative work with the Centre for Virus Research at the University of Glasgow has shown that Affimer reagents which bind to the SARS-COV-2 virus spike protein prevent infection of human cells by a SARS-COV-2 model virus and therefore provide a potential therapy for COVID-19 infection. Avacta has now successfully completed the initial phase of a collaboration with Professor David Bhella at the University of Glasgow showing that these “neutralising” Affimer reagents prevent a SARS-COV-2 model virus from entering human cells and therefore provide a potential therapy for COVID-19.

 Work is continuing with Professor Bhella to further study the way in which the Affimer reagents prevent infection and Avacta is using this growing body of data actively to secure a large pharmaceutical partner to develop these potential therapeutic candidates rapidly.


Novacyt 255p £180m (NCYT.L)

The international specialist in clinical diagnostics, announces the launch of three new products to support laboratories testing for COVID-19. These are Exsig™ Direct and Exsig™ Mag, two RNA extraction kits for use prior to running a polymerase chain reaction (PCR) test for COVID-19, and COVID-HT, a high-throughput test for COVID-19.   


Petards Group* 6.95p £4m (PEG.L)

FY Dec 19 results. Revenues £15.7m. Loss of £193k

£1m post post year-end cash receipts in respect of pre-2019 R&D investment. Outlook positive for the sector with UK Government committing further investment for railways, law enforcement and security where the company is heavily embedeed with large customers.  Solid order book at 31 May 2020 of over £13 million, provide the Board with confidence for the Group’s future prospects


NetScientific 8p £6.3m (NSCI.L)

Portfolio company PDS Biotechnology Corporation  (Nasdaq: PDSB) today announced a co-development agreement with Farmacore Biotechnology for Versamune®-CoV-2FC, a Versamune®-based vaccine aimed at preventing COVID-19 infection.

Under the collaboration, PDS Biotech and Farmacore will accelerate development of Versamune®-CoV-2FC into Phase 1 clinical testing in Brazil, with initial financial support provided by the Brazilian Ministry of Science, Technology, Innovation and Communication (MCTIC). Versamune®-CoV-2FC combines a Farmacore-developed recombinant SARS-CoV-2 protein with PDS Biotech’s Versamune® platform nanotechnology. The rapid advancement of this joint COVID-19 program expands upon a previously announced research and development collaboration between PDS Biotech and Farmacore to develop a Versamune®-based vaccine for tuberculosis.

  NetScientific holds 7.18% of PDS’ undiluted share capital.


Volex 150.5p £229m (VLX.L)

Prelims to 5 April 2020

  • Underlying operating profit increased by 46.3% to $31.6 million
  • Revenue growth of 5.2%
  • Statutory profit after tax increased by 59.8% to $14.7 million
  • Exceptional cash generation with underlying free cash flow of $48.8 million
  • Net cash excluding lease liabilities of $31.6 million as at the year end. Final div 2p.

Unaudited revenue for the four months ended May 2020 was $126.2 million, 4% ahead of the same period a year earlier. During this period, the business has performed ahead of expectations, although we are now seeing areas of weakness primarily in the medical equipment installation sector, as hospitals around the world remain closed for non-critical medical procedures. In our electric vehicle business, after weakness in March and April due to customer factory closures, we are starting to see a recovery. Our consumer and data centre businesses continue to perform well.

However, the duration and breadth of the market disruption arising from this situation remains unclear and therefore we do not believe it is appropriate to provide financial guidance for the current year at this early stage. We remain optimistic for our business prospects over the medium term and consider that our focus on the high-quality growth markets of medical, electric vehicle and high-speed data centre products, combined with our strong funnel of design wins in our Integrated Manufacturing Services division, will allow us to grow and prosper in the years to come.”


Head Chef:

Derren Nathan
0203 764 2344

*A corporate client of Hybridan LLP


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

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

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

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

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

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

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

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

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

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

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

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

If you would like to unsubscribe, please email with “unsubscribe me”.