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Small Cap Feast – 05 June 2020

Dish of the Day:

No Joiners Today

 

Off the Menu:

Castleton Technology has left AIM following a recommended cash takeover.

 

What’s Cooking in the IPO Kitchen?

The pantry is bare!

Breakfast Buffet

Applied Graphene Materials 11.8p £5.7m (AGM.L)

Exclusive distribution agreement with Dichem Polymers SA (Headquarters Acharnes, Greece). The agreement helps to extend AGM’s commercial reach directly into the coatings and polymers sectors across Greece.

Founded in 1977, Dichem Group, has a strong history of delivering high performance chemicals to a wide range of markets including cosmetics, pharmaceuticals, food industry, polymers and coatings. The company’s focus on supporting customers, with their specialist, technical focus, allows them the opportunity to actively participate in R&D programmes to establish new technologies in their selected sector.

 

Getech Group 16.5p £6.2m (GTC.L)

  • Revenue £6.1 million (2018: £8.0 million), with new forward sales up 41% to c£2.4 million (2018: £1.7 million), a significant portion of which will unwind to revenue in 2020
  • Orderbook increased by 48% to £3.1 million at 31 December 2019 (31 December 2018: £2.1 million)
  • Annualised Recurring Revenue £2.3 million at 31 December 2019 (31 December 2018: £2.3 million)
  • Total cost base 16% below 2018 (2019: £6.4 million; 2018: £7.6 million)
  • Adjusted EBITDA £0.9 million (2018: £1.3 million), before exceptional items totalling £2.8 million
  • Net cash £2.7 million at 31 December 2019 (31 December 2018: £0.5 million), with the Group generating free cash in H2-19

We expect May’s sharp rebound in oil prices, which has continued into June, to take time to filter through to our customer conversations. Getech’s revenue is normally weighted 40:60 between H1 and H2 and there is the likelihood this weighting becomes accentuated into H2 in 2020. In H1 2020 we have focused on the replenishment of our orderbook and protecting annually recurring revenue. Year-to-date, we are cautiously encouraged by the renewal rate across our software products and we have won service extensions that deliver monthly revenue to year-end. We are also negotiating various licence renewals to our Globe knowledge product.”

 

C4X Discovery 15.6p £18.6m (C4XD.L)

Clive Dix, Chief Executive Officer of C4XD has been appointed a member and Deputy Chair of the Steering Board of the UK Vaccine Taskforce, the group set up by the Government’s Chief Scientific Adviser, Deputy Chief Medical Officer, Business Secretary and Health Secretary to lead UK efforts to find and manufacture a COVID-19 vaccine.  Clive remains committed to delivering C4XD’s strategy and this appointment will not impact his day-to-day role as CEO.

 

Block Energy 2.1p £8.3m (BLOE.L)

The current Technical Director, Roger McMechan, has stepped back from his executive position to pursue his other interests with effect from 3 June. Roger will continue on the Board as a non-executive director, enabling the Company to utilise his petroleum engineering expertise and detailed knowledge of the Company’s assets as Block Energy prepares to restart oil production and initiate gas production at its West Rustavi field.

The Company welcomes Ritchie Wayland as Technical Manager. Ritchie holds a Master’s degree in petroleum geology from Imperial College London. He started his career with Schlumberger, working as a wellsite logging engineer in the Middle East, North Africa, the Caribbean and Australia. On leaving Imperial College and BP, he joined Phillips Petroleum, to work in the UK and West Africa, initially as a project geologist before leading sub-surface teams, where he specialised in the development of team performance by integrating the contributions of commercial, operations and subsurface staff to successfully discover and develop several new fields.

 

GYG 74.5p £34.75m (GYG.L)

The market leading superyacht painting, supply and maintenance company, announced the signing of two Refit contracts with MB92 Group. These two contracts, with a combined value of over EUR6 million, are due to commence immediately in MB92 Group’s specialist facilities in Barcelona, Spain and La Ciotat, France. GYG’s operations in both shipyards are running as normal, with enhanced health and safety protocols in place, following a short closure of the yards during March and April.

 

Thor Mining* 0.4p £4.3m (THR.L)

Commencement of field activities associated with the due diligence assessment for the acquisition of American Vanadium Pty Ltd (AVU) , which holds interests in uranium and vanadium focussed projects in Colorado and Utah in the United States of America.  The Company announced on 1 June 2020 an option agreement to acquire AVU, subject to satisfaction of due diligence requirements.

In addition, investigations to date, while not yet complete, have revealed no regulatory or environmental issues which would cast doubt on the transaction.  Some historical data has been obtained, allowing a preliminary understanding of some potential opportunities.

Highlights:

  • The Thor team based in Colorado has commenced field due diligence activities consisting of site reviews and sampling from historical mines around the Wedding Bell and Radium Mountain.
  • Historical data reviews show substantial previous mining activity in the western portion of the Wedding Bell claims (Colorado), with the geology trending into the untested eastern portion of the claims.
  • At the Utah Claims, located approximately 40km north of the town of Moab, 1980’s drilling reported significant uranium and vanadium mineralisation from within the Brushy Basin Member of the Jurassic Morrison Formation, however the deeper and normally higher grade Salt Wash Member remains substantially untested.
  • Anecdotal reports suggest that historical mining practices in the region often selectively recovered high grade material, leaving vanadium rich mineralisation, above and/or below the uranium rich zones.
  • Sampling and field based activities are expected to continue for the next week, with results planned to be released later this month. 

 

IGas Energy 26p £31.9m (IGAS.L)

AGM Statement. “Reflecting on our 2019 results, we continued to deliver on our strategic priorities and set about further reducing our financing costs through a $40 million Reserve Based Lending facility (RBL), which was secured in October 2019.  I am pleased to announce today that we have successfully completed the RBL redetermination (a semi-annual recalculation), confirming US$29 million (£23.3 million) of debt capacity and current headroom of US$13 million (£10.5 million). 

Operationally, in 2019, we delivered production well within guidance, made progress in advancing incremental production projects and made a potentially world-class discovery at our Springs Road well site.

As is well documented, the early part of 2020 has been a turbulent one for not only this industry, but for each and every one of us.  We have had to re-evaluate short term priorities to weather the oil price disruption and COVID-19 impacts.

As announced on 1 May, we took the prudent decision to temporarily shut-in a number of sites during May and June, which will have a positive impact on our cash flow during these two months of c.£500k and will reduce production by c.600 boepd for this period. We have accessed the Government’s Job Retention Scheme with approximately 40 employees currently placed on furlough.  We continue to review the number of shut-in sites on a regular basis and we will monitor the oil price and the furlough scheme to see when production should be restarted.”

 

Metal Tiger 2.33p £35m (MTR.L)

Metal Tiger has executed an International Swaps and Derivatives Association (agreement and Credit Support Annex  with the same global investment bank with which it has the equity derivative financing arrangements subject to the Umbrella Agreement, as announced on 17 December 2019.

The execution of the ISDA agreement will allow Metal Tiger to obtain access to over-the-counter (“OTC”) derivatives including but not limited to equities, commodities and FX contracts.

The CSA essentially helps to stipulate the terms and conditions under which each party is required to post collateral to each other.

 

Cadence Minerals 11.75p £14.12m (KDNC.L)

Macarthur Minerals (TSX-V: MMS) Joint Venture Partner, Fe Limited has announced the completion of the sale of its Evanston royalty interest over a portion of the wider Koolyanobbing iron ore mine in the Southern Yilgarn region of Western Australia. 

TRR Services Australia Pty Ltd, a wholly owned subsidiary of Trident Resources PLC (LSX: TRR), has purchased the royalty for $7 million. FEL has received the first payment of $3.5 million with a further instalment of $3m payable in 12 months. FEL now has cash in the bank of $5.2 million and fully funded to commence exploration work at the Hillside Copper and Gold Project in the Pilbara region of Western Australia.

FEL is currently finalising plans to conduct a Fixed Loop Electromagnetic Survey (FLEM) ground survey at the Hillside project.

 

Trans Siberian Gold 88.5p £77.14m (TSG.L)

Low cost, high grade gold producer in Kamchatka, Russia, is pleased to confirm that the Company’s wholly owned subsidiary AO Trevozhnoye Zarevo (“TZ”) has entered into an agreement with PJSC VTB Bank (“VTB”) for a revolving credit line with a limit of $10 million for a period of 3 years.

This agreement, successfully re-finances an existing credit line with a limit of $5 million expiring on 20 June 2020 and enhances the short-term liquidity of the Group. The existing facility has been fully repaid. TZ currently has not drawn down any funds under the new credit facility.

 

Head Chef:

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

*A corporate client of Hybridan LLP

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