Small Cap Feast

21st December 2022

Dish of the day
No Joiners today
Off the menu
No leavers today
Our last Feast before Christmas, wishing all Happy Christmas, back in January... 

Dish Of The Day:

Joiners: 
Medcaw Investments Plc, epic MCI, has joined the Main Market on the Standard List. The Company was formed to undertake one or more acquisitions in the life sciences sector, particularly those that are focused on developing medical and/or wellness technologies and/or therapies.  

Leavers:
ContourGlobal Plc, epic GLO, has left the Premium Segment of the Main Market.

What’s Cooking In The IPO Kitchen?

Quetzal Capital, to be renamed Tap Global Group, intends to join the AQSE Growth Market. Tap Global is an innovative and fully integrated provider of crypto settlement and fiat banking. It provides its customers with access to several major crypto exchanges through Tap Global’s app, allowing them to purchase up to 15 crypto assets and store them directly in the customer’s wallet. Tap Global also offers full fiat banking for both B2B and B2C and crypto services to its customers. Expected 9 Jan 2023.

Celsius Resources intends to join AIM. Currently ASX listed, Celsius is a natural resources exploration and development company principally seeking to explore and develop potential world-class copper-gold assets in the Philippines and a cobalt asset in Namibia. Amount planning to raise and anticipated market cap TBC. Expected late December 2022. 

Conviction Life Sciences, a newly established closed-ended investment company managed by Plain English Finance Limited, is seeking to list on Premium Segment of the Main Market of the London Stock Exchange, to invest in a conviction portfolio of life sciences and medical technology businesses, primarily in the UK, Europe and Australasia. The Company will invest in both Publicly Traded and Private companies - c. 70% and c. 20% of the total portfolio value respectively. The Company will target an annualised Total NAV Return of 20% over the long-term. Targeting to raise c.£100m. Date 16 December.

Kistos Holdings intends to join AIM. The Company was incorporated to act as a new holding company for the group companies 0f Kistos plc (KIST), a holding company with the objective of creating value for its investors through the acquisition and management of companies or businesses in the energy sector. Anticipated Market Cap £327m. Expected 22 Dec 2022.


Breakfast Buffet

Canadian Overseas Petroleum 12.45p £33.7m (COPL.L)

International oil and gas exploration, production and development company, with production and development operations focused in Converse and Natrona Counties, Wyoming, USA, has announced a costless restructuring of its West Texas Intermediate and Butane hedges effective 1 January 2023, as the Company prepares for senior debt refinancing in the first quarter of 2023.  

Caracal Gold 0.975p £18.3m (GCAT.L)

Caracal Gold, the expanding East African gold producer with over 1.3m oz JORC compliant gold resources, has published a Scoping Study focused on the expansion of its flagship Kilimapesa Hill Gold Project in Kenya, which highlights robust project economics. The Scoping Study emphasises Kilimapesa’s robust economics (post tax, based on a gold price of US$1,700/oz for 3 months and then US$1,650 for remaining 10 years). With funding in place, the Company now plans to fast-track the expansion project with completion anticipated towards the end of H1 2023.

Cooks Coffee Company 21.5p £10.7m (AQSE:COOK)

The international coffee focused café chain has announced that it has issued shares at an issue price of NZ$0.36 (£0.18), to raise gross proceeds of approximately NZ$1,673,080 (approximately £836,540), pursuant to a shortfall placement associated with the Company's previously announced rights issue.

Ferrexpo 164.75p £969.8m (FXPO.L)

A producer and exporter of high grade iron ore pellets to the global steel industry has provided the following update on its operations in central Ukraine. Subsequent to the suspension of its operations in October 2022, the Group is now receiving sufficient levels of power to bring one pelletiser line back into operation. This will allow the Group, together with its stockpiled material, to meet the requirements of existing customer contracts. Despite interruptions to the Group’s production, shipments to customers during 4Q 2022 have continued at a run rate of approximately 250 kilotonnes per month.

Gama Aviation 57.5p £36.8m (GMAA.L)

Gama Aviation has given an update on H2/22 trading, liquidity and the progress in repaying its maturing credit facilities. The Group is enjoying a solid trading performance in the second half of the year, building on the recovery, strong revenue growth and solid financial performance reported in the first half.  Whilst there have been some variances in the performance across the business units, the overall Group Adjusted EBIT is anticipated to be in line with management expectations. As at 19th December 2022, the Group held cash balances totalling $11.7m and Net Bank Debt stood at $12.5m.  The Company is also reviewing its mid to long term financing requirements with a view to maintaining low debt levels in what remains a challenging market in terms of both the availability.

Kavango Resources 1.5p £10.6m (KAV.L)

Kavango has announced the appointments of Peter Wynter Bee and Jeremy S. Brett to the board of directors, effective from 01 January 2023. Peter Wynter Bee, 67, joins the Company as a non-executive director and is the Chairman of Moxico Resources, the majority owner and operator of the producing Mimbula Copper Project in Zambia. Peter is an experienced lawyer who has focused on financing and managing mining companies. Jeremy S. Brett, 55, joins Kavango as an executive director. He is a senior geophysical consultant with 28 years international mineral exploration in most commodities.

Poolbeg Pharma* 6.1p £30.5m (POLB.L)

Poolbeg, a leading infectious disease focused biopharmaceutical company, announces that it has successfully identified potential new drug candidates from its Respiratory Syncytial Virus artificial intelligence Programme with OneThree Biotech, Inc. The Company has prioritised compounds with existing Phase I clinical data and which could, if successfully validated, be repositioned as novel treatments for RSV infection.

Sanderson Design Group 117.5p £84.0m (SDG.L)

Luxury interior design and furnishings group has announced a new licensing agreement for its Morris & Co. brand with Ruggable LLC, the US-based company that markets machine washable indoor and outdoor rugs and doormats. This agreement is the second major licensing agreement for the Morris & Co. brand in the USA, following the agreement with US retailer Williams Sonoma for a broad range of tableware, cookware and kitchen accessories, and is in line with the Group’s international expansion.  Under the terms of the licensing agreement, Ruggable will develop a range of washable Morris & Co. rugs, cushions and doormats for launch during the first half of next year.

Taseko Mines Limited 121p £358.6m (TKO.L)

Taseko has announced it has signed agreements with Mitsui & Co. to form a strategic partnership to develop the Company’s Florence Copper project, located in Arizona USA. Mitsui has committed to an initial investment of US$50m, with proceeds to be used for construction of the commercial production facility. The initial investment will be in the form of a copper stream agreement on 2.67% of the copper produced at Florence Copper. In addition, Mitsui has the option to invest an additional US$50m (for a total investment of US$100m) for a 10% equity interest in Florence Copper. The Equity Option is exercisable by Mitsui within a three-year period following completion of construction of the commercial production facility. If Mitsui elects to exercise its Equity Option the Copper Stream will terminate. As part of the arrangement, Taseko and Mitsui have entered into an offtake contract for 81% of the copper cathode produced at Florence during the initial years of production.

Zephyr Energy 5.9p £92.1m (ZPHR.L)

The Rocky Mountain oil and gas company focused on responsible resource development from carbon-neutral operations has announced the acquisition of the remaining 25 per cent working interest across the White Sands Unit in the Paradox Basin, Utah, U.S. In addition, the Company announces that it has acquired a working-interest in a further six wells in the Williston Basin, North Dakota, U.S. This accretive acquisition will provide the Company with further low-risk oil production and is expected to generate substantial cashflows for the Company which can be reinvested into the Paradox Project development. To fund the Williston Acquisition, the Company has secured an US$8m asset-backed bridge loan facility on attractive commercial terms from a U.S. based family office which has co-invested with Zephyr's management team on other projects on multiple occasions.

21 December 2022
*A corporate client of Hybridan LLP

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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.

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MIFID II status of Hybridan LLP research
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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.

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