Small Cap Wrap: Month: November 2012

AIM Breakfast - Archive

27 November 2012

This week: PPT strikes in Brazil, JDG to exceed expectations, AYM for new estimate in Anglesey

The main indices bounced back strongly last week with the FTSE 100 rising 211 points to 5,819 and the AIM All Share rising 14 points to 694. Sentiment was lifted by President Obama’s expressed confidence that an agreement over fiscal policy would be reached before the end of the year and a preliminary reading of Chinese manufacturing activity in November reaching 13 month highs. This week sees numerous corporate statements and the much watched S&P/Case Shiller Home Price Index in the US, although we suspect many will be preoccupied with the implications of yesterday’s  announcement that the current Bank of Canada governor will replace Mervyn King as the Bank of England governor in 2013.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

RGO Pilot with O2, ACM Interim results, AYM Interims, AVG Aerotech acquisition, BGL Additional mining lease acquired, CMH Interims, CGNR Tetra Tech provide technical services, FIP board changes at MedaPhor and Magnomatics fundraise, GBG Interims, IMTK Interim results, JDG Trading statement, LID LiDCOrapid v2 satisfies NICE recommendations, PPT Cielo Brazil initiative/Nasdaq listing, PLA Interim results, RRR Tshipi Borwa project update, RENE Data supportive of ReN001 for stroke, RLD JV with government, SORB Preliminary Results, SQS Contract wins and business update, SUMM Board changes, TEG Update Re Dagenham, TRX US subsidiary, TPJ Half yearly report, VAL Update, VIY Shale oil development

2ergo (LON:RGO 16p / £10.23m)
RGO Pilot with O2
2ergo Group, the provider of contactless mobile technology solutions, has deployed its podifiTM technology to launch O2’s mobile contactless couponing pilot in the ‘Silicon Docklands’ area of Dublin. O2’s ‘Docklands Deals’ scheme enables customers on any mobile network to redeem local discounts and promotional offers in participating local retailers using their iPhone or Android smartphones. Consumers simply download the 2ergo developed application from the iPhone App store or Google Play Store to view available offers, saving relevant coupons to their smartphone, enabling it to act as a virtual mobile wallet. The consumer then redeems the offer in participating stores by tapping their phone over a specially installed ‘podifi pod’, connected to the till.

Accumuli (LON:ACM 10.875p/£16.16m)
ACM Interim results
Accumuli, the provider of Advanced IT Security Services, reported interim results for the six months to 30 September 2012. The Company saw a 22 per cent increase in revenues to £6.7m (2011: £5.5m) and a loss before tax of £218,000 (2011: profit £213,000), though operating profit before separately identifiable costs was £0.2m (2011: £0.1m). Recurring revenues came in at 47 per cent, whilst on the balance sheet, cash at the year end stood at £1.5m (2011: £0.5m). The period saw a number of notable events, including the appointment of Gavin Lyons as Chief Executive (who was previously at SAP as Head of Telecoms & Utilities UK & Ireland and Trend Micro as Sales and Channel Director for the UK & Ireland, as well as helping to build Indentum before its sale to Trend Micro) and the acquisition of EdgeSeven for an initial consideration of £0.8m (maximum £3m). The Company remains on the lookout for acquisitions which will complement existing expertise and capabilities.

Anglesey Mining (LON:AYM 7.2p/£11.56m)
AYM Interims
Anglesey Mining, which holds 19.7 per cent of Toronto-listed Labrador Iron Mines (LIM) and 100 per cent of Parys Mountain zinc-copper-lead deposit in North Wales, has reported that a pretax loss of £7.4m in the six months to September, compared with a £16.7m profit in the same period last year. A strong increase in iron ore production at LIM was more than offset by a sharp fall in the price of iron ore during August and early September that severely restricted revenue for that period and resulted in a significant accounting loss for the September quarter. At Parys Mountain, there has been further progress with the completion of the 2012 drilling programme.  The new resource estimate is expected to be released shortly. At the end of September, the cash resources were £1.9m, which had fallen to £0.8m on 21 November 2012.

Avingtrans (LON:AVG  98.5p / £25.64m)
AVG Aerotech acquisition
Avingtrans, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, and medical sectors, announced that it has acquired Aerotech Tubes Ltd for a cash consideration of £2m. Furthermore, the Company has secured a new long term agreement, currently valued at £2m per annum, over the next ten years, with an existing Aerotech customer. Based in Derby, Aerotech manufactures pipe assemblies and manifolds for leading tier-1 customers in the Aero-engine industry. Aerotech, which employs ten people, reported revenue of £2.36m and an adjusted operating profit of £0.46m for the year ended 31 December 2011.

Bullabulling (LON:BGL 6p / £17.34m)
BGL Additional mining lease acquired
Bullabulling Gold, focused on a gold project near Coolgardie in Western Australia, has agreed to acquire mining lease M15/552 from Resolute Mining Ltd in exchange for 13.5m ordinary shares in Bullabulling Gold. M15/552 is situated immediately west of the Bullabulling gold deposit and is surrounded on three sides by Bullabulling Gold’s existing tenements. While the main body of mineralisation being targeted for development by Bullabulling Gold is located within the Company’s existing tenure, work carried out during the pre-feasibility study indicates that the optimal open pit crest would encroach on M15/552, such that a portion of the targeted resource could not be extracted without access to this tenement. Control of M15/552 also provides Bullabulling Gold with additional growth opportunities. The Bullabulling gold deposit dips west towards M15/552 and remains open down dip, with drilling to date already intersecting mineralisation beyond the limit of the current resource. Furthermore, the southern extension of the Bullabulling trend, which has not been extensively explored, is closer to M15/552 and mineralisation is known to cross the lease boundary at a relatively shallow depth, particularly at the Edwards Prospect where the resource grade is higher than the Bullabulling average. The acquisition remains conditional on Bullabulling Gold completing due diligence within ten business days. Upon completion of the transaction, Resolute will hold 4.5 per cent of Bullabulling Gold’s equity.

Chamberlin (LON:CMH 174.5p/£13.87m)
CMH Interims
Chamberlin, a specialist castings and engineering firm, has reported that revenues for the six months to September 2012 were slightly down on the same period last year at £22.6m. However, there was a material improvement in profitability, with underlying operating profit up 11 per cent to £0.93m and diluted underlying earnings per share up 9 per cent to 8.1p. The high level of cash generation enabled reduction in net debt of £1.15m to £0.9m at the end of September. Given the continued improvement in operating profits, and strong cash generation, the Board has increased the interim dividend by 25 per cent to 1.25p.

Conroy Gold and Natural Resources (LON:CGNR 1.1p / £2.97m)*
CGNR Tetra Tech provide technical services
AIM listed Conroy Gold, the gold exploration and development company focused on Ireland which plans to develop its first gold mine in Clontibret in Co. Monaghan, announced that Tetra Tech has been appointed to provide technical services in support of the ongoing metallurgical test work programme. Tetra Tech will review the metallurgical studies on behalf of Conroy and compile the metallurgical report for the metallurgical section in the Feasibility Studies for the proposed mine. Commenting, Chairman, Professor Richard Conroy said: “I am delighted that Tetra Tech with their outstanding expertise in metallurgy is involved in association with SGS and Goldfields in the Metallurgical studies, one of the major sections of the Feasibility Studies.”

Fusion IP (LON:FIP 55.5p / £40.43m)*
FIP board changes at MedaPhor and Magnomatics fundraise
The university commercialisation Company, that turns university research into business, made several announcements over the past week. First that Riccardo Pigliucci has joined MedaPhor, one of its portfolio companies, as their new Chairman. He is a former President, COO, and Board Member of Perkin-Elmer Corp and CEO of Life Sciences International plc, Discovery Partners International, director of Visual Sonic and Dionex. MedaPhor’s lead product, ScanTrainer, is a virtual reality based ‘real feel’ ultrasound-training simulator that enables trainees, of any level, to literally ‘feel’ what they see on the computer screen in order to develop the complex mix of cognitive skills and eye-hand movement coordination required to learn all the key ultrasound scanning skills. Fusion has a 39 per cent shareholding in MedaPhor.
Second, Fusion announced that its Sheffield based portfolio company, Magnomatics, has successfully raised £2.5m to complete the development of its revolutionary magnetically geared motors for the hybrid and electric vehicle market. Magnomatics, which was spun out of The University of Sheffield in 2006, develops novel proprietary magnetic transmissions and ultra compact and efficient motors and generators for some of the world’s largest multinationals. It is active in a range of industries, including renewable energy, automotive, aerospace and defence. The funding will enable Magnomatics to complete the development of its magnetically geared motors for the burgeoning electric and hybrid vehicle market. The system offers the motor vehicle manufacturers a lighter, quieter, more efficient direct drive motor. When the full £2.5m funds are invested, Fusion’s shareholding will be 31 per cent.

GB Group (LON:GBG 95.75p/£103.85m)
GBG Interims
GB Group, the identity management specialist, has reported that in the six months to September 2012, revenues increased by 44 per cent year on year to £17.7m. Underlying operating profit increased by 58 per cent to £1.5m, £0.1m ahead of the trading update issued in October 2012. These results, which include the first complete six months of trading for three acquired businesses, reflect the increased scale and profitability of the Company. The Company remains highly cash generative, with operating cash flow before working capital movements increasing by 52 per cent to £1.5m, with cash balances at the period end improving to £5.8m, after £1.5m of dividend payments.

Imaginatik (LON: IMTK 0.27p/£2.29m)
IMTK Interim results
Imaginatik, the provider of collaborative innovation software and processes, announced results for the six months to 30 September 2012 which saw an eight per cent increase in revenues to £1.75m (2011: £1.62m) and a narrowing of losses before share option costs to £0.36m (2011: £0.43m). Of the sales, some 24 per cent came from recurring business, with 69 per cent from new customers – 17 new during the period, nine of which are on annual contracts. The US continues to be the core market for the Company, with 93 per cent coming from the territory and seven per cent from Europe, and having invested in the software platform, the Company looks ahead to the full year with confidence.

Judges Scientific (LON:JDG 945p / £49.64m)
JDG trading statement
The Directors of Judges Scientific have updated the market on progress in the run-up to the Company’s financial year end of 31 December 2012. In the second half of the financial year 2012, the Group’s businesses have generated satisfactory orders, sales and margins. Global Digital Systems, acquired in March 2012, has traded in line with the Board’s estimates at the time of the acquisition. The Board is confident that adjusted earnings per share for the full year will exceed current market expectations.

LiDCO (LON:LID 13.75p/ £26.61m)
LID LiDCOrapid v2 satisfies NICE recommendations
LiDCO Group, the cardiovascular monitoring company, has reported that new guidance from the National Institute for Health and Clinical Excellence (NICE) recommends the use of depth of anaesthesia (DOA) monitors during general surgery in higher risk patients. Use of Covidien’s Bispectral Index (BIS™) DOA technology, accessible through the new LiDCOrapid v2 monitor, was highlighted in the NICE report as showing the strongest evidence of clinical benefit. This new recommendation suggests that use of DOA monitoring is adopted for all high-risk surgery patients undergoing general anaesthesia. In the UK at least 340,000 high risk patients are operated on under general anaesthetic each year and could benefit from this type of monitoring.

Planet Payment (LON:PPT 182.5p/£96m)
PPT Cielo Brazil initiative/Nasdaq listing
Planet Payment, the international and multi-currency payment processor, and Cielo, the Latin American electronic payments solutions provider, have announced an initiative to deliver Planet Payment’s Pay in Your Currency® and Shop in Your Currency™ services to Cielo’s portfolio of merchants in Brazil. The solution can offer significant value-added benefits to Cielo’s merchants and their customers, especially tourists expected to visit Brazil during the two major global events – the World Cup in 2014 and the Olympics in 2016.  With the new tool, which will be available for 1.3m Cielo merchants next year in Brazil, international customers will be offered the convenience of paying in their home currency at the point-of-sale. Cielo and Planet Payment will also be launching Shop in Your Currency which enables Brazilian e-commerce merchants to more effectively target foreign markets and close more sales from international customers. The Company has also reported that it plans to file an amendment to its Form 10 in the next few weeks with a view to completing the process of becoming a NASDAQ listed company by the end of 2012. Net revenue in the nine months to September increased by approximately 7 per cent to $31.7m while net income decreased from $0.6m to a loss of $4.3m.

Plastics Capital (LON:PLA 72p / £19.83m)
PLA Interim results
Plastics Capital, the niche plastics products manufacturer, announced interim results for the six months ended 30 September 2012, which were in line with management expectations. Revenues were down three per cent at £15.7m but earnings per share were four per cent up at 5.5p per share. Net debt was cut by 24 per cent to £8.6m. New business wins continued with seven new key accounts won during the first half and there were significant technical breakthroughs on key product development projects. The Company also announced a doubling of the interim dividend. Ignoring mainland Europe, where sales were down due to the recession, the Group continued to perform well. The Board expects the Company to trade broadly in line with expectations for the rest of the financial year.

Red Rock (LON:RRR 0.97p / £9.95m)
RRR Tshipi Borwa project update
Red Rock Resources, the mining and exploration company with an iron ore project in Greenland, a producing gold mine in Colombia, advanced gold and copper exploration in Kenya, and interests in steel feed, uranium and rare earths, has announced that the Tshipi Borwa Mine, in which Jupiter Mines Ltd has a 49.9 per cent stake, successfully loaded its first full trainload (6,430 tonnes) of manganese ore on November 18th 2012. It is envisaged that the first shipment of approximately 40,000 tonnes will be dispatched from Port Elizabeth in late December or early January.

ReNeuron Group (LON:RENE 2.05p / £15.88m)
RENE Data supportive of ReN001 for stroke
ReNeuron Group announced the publication, in two leading peer-reviewed scientific journals, of key non-clinical data demonstrating the multiple ways in which its lead CTX neural stem cell line promotes repair in stroke-damaged brain. The first clinical application for the CTX cell line is ReNeuron’s ReN001 stem cell therapy for disabled stroke patients, currently in Phase I clinical development. The first paper, relating to studies undertaken by ReNeuron’s researchers, has been published in the journal Cell Transplantation. The second paper, relating to work undertaken in collaboration with the Institute of Psychiatry, King’s College London, has been published in the journal PLOS ONE. Taken together, this breadth of empirical evidence is strongly supportive of the ongoing clinical development of ReNeuron’s ReN001 stem cell therapy for disabled stroke patients. These collective data also provide the Company with a potential competitive advantage regarding the licensing and commercial potential of its therapeutic candidates.

Richland Resources (LON:RLD 4.125p / £4.87m)
RLD JV with government
Richland Resources, the gemstones producer and developer, confirmed that the Company’s subsidiary, TanzaniteOne Mining Limited (TML), is in discussions with the Ministry of Energy and Minerals. The Minister held public meetings on 23 and 24 November with all stakeholders in the tanzanite industry, to address the various issues plaguing the industry, including, illegal mining and smuggling. As per the Minister’s statements and subsequent media reports, the Company has confirmed that TML is in ongoing negotiations with the Government of Tanzania regarding a potential shareholding by the Government. The potential joint venture and shareholding currently under discussion relates to the ownership structure of the Mining Licence covering Block C, Merelani. Further announcements will be made as soon as these negotiations are concluded.

Sorbic International (LON:SORB 8p / £3.60m)
SORB Preliminary Results
The third largest sorbates producer in China announced its preliminary unaudited results for the year ended 30 September 2012. Revenue for the year was £16.8m (2011: £14.7m) and gross profit margin for the year was 8.6 per cent (2011: 10.2 per cent). The operating profit came in at £21,699 (2011: £13,153), with a net loss of £0.3m (2011: £0.1m). Cash balances at 30 September 2012 were £4.1m (2011: £3.5m) and net assets per share of £0.38 (2011: £0.44). The Inner Mongolia project has been disrupted since March 2012 with compensation negotiations still ongoing. John McLean, Non-Executive Chairman of Sorbic International, commented:  “The Board is pleased that the core business has continued to grow this year, produced a small profit, and is cash flow positive at the operating level.  The Board remains focused on resolving its cash flow constraints, as well as continuing to work to seek a conclusion of the negotiations regarding the Inner Mongolia facility, and will update shareholders on this matter in due course.”

SQS Software (SQS 225.5p/ £62.90m)
SQS Contract wins and business update
SQS Software Quality Systems AG, the specialist in software quality services, has announced several contract wins and a business update. The previously announced preferred partnership with Siemens for the provision of testing services to its manufacturing, predominantly automotive clients, has led to further contract wins. These include three in Europe, one in Japan (which represents a new territory in which SQS is now delivering services) and two in the US. Outside of the manufacturing sector, SQS has also won a significant multi-year contract with a major transport infrastructure provider in Switzerland, and a global insurance provider, a multinational consumer goods company and a tier-one bank in the UK. In total these new contracts represent business worth approx. EUR10m over two years. The Company has also won a considerable number of contract extensions and contract expansion orders since 30 June 2012 within the Managed Services business. The Company also continues to generate significant cashflow; the net debt position is now significantly lower than at this time last year and lower than at 30 June 2012.

Summit (LON:SUMM 5.125p / £18.15m)*
SUMM Board changes
UK drug discovery and development Company announced that it has appointed Mr Jim Mellon and Dr Frank Armstrong as Non-Executive Directors. The addition of Mr Mellon and Dr Armstrong to Summit’s Board of Directors is part of the Company’s previously announced strategic shift to focus on its clinical-stage programmes for the treatment Duchenne Muscular Dystrophy (DMD) and C. difficile infections. “Jim and Frank will bring considerable business, clinical and product development expertise to support the future growth of Summit,” commented Dr Barry Price, Chairman of Summit. With the appointment of the new directors, Dr Richard Storer, Dr Andy Richards and Mr George Elliott will be stepping down from the Board effective immediately.

The TEG GROUP (LON:TEG 4.875p / £9.19m)
TEG Update Re Dagenham
AIM listed cutting edge green technology Company, which develops and operates organic composting and energy plants, announced that it has commenced construction of the £21m organic waste facility at East London’s Dagenham Dock in the London Borough of Barking and Dagenham, which is the first anaerobic digestion (AD) energy plant to be constructed in Central London.  The new facility will process 49,000 tonnes per annum of food and green waste via AD and In-vessel composting technology on a 4.7 acre site on the Mayor of London’s 60 acre London Sustainable Industries Park. The plant will generate approximately 1.4MW of electricity, sufficient to power approximately 2,000 homes.  It will also produce over 36,000 tonnes p.a. in AD digestate and 14,000 tonnes p.a. of compost for agricultural use.   TEG has now commenced the ground works for the new facility in preparation for construction to commence later in 2012. Construction of the plant will generate approximately £16m in revenues for TEG over the period of construction and the facility is scheduled for completion in early 2014, following the commissioning period that is expected to commence in Q3 2013.

Tissue Regenix Group (LON:TRX  11.0p / £71.81m)
TRX US subsidiary
Tissue Regenix has set up a subsidiary company in the United States, as part of its commercialisation strategy for its dCELL(R) technology platform. The Company also announced the recruitment of Greg Bila from Kinetic Concepts Inc. (KCI) as President of Tissue Regenix USA. Greg’s recent career at KCI has spanned a number of sales & marketing roles and brings over 20 years’ experience in pharmaceutical and medical device fields. Tissue Regenix will focus initially on applying the dCELL(R) to the treat a number of chronic diseases but, over time, it could be developed for other applications including vascular repair, heart valve replacement and knee repair.

Triple Plate Junction (LON:TPJ  0.95p / £3.50m)
TPJ Half yearly report
Triple Plate’s financial position as at 30 September was that the bank balances stood at approximately £1,729,000 and liabilities were approximately £226,000. These liabilities included £156,000 owed to Newmont Mining for the repayment with interest of their 2010 Convertible Loan Notes issued by the Company, and which has been repaid post period end. The Company has continued to cut operating costs and accordingly has slowed the cash burn rate. One of the consequences of being minority holders in all four of their projects is that the Company is reliant on its partners for newsflow, and exploration success. The Board still believes that one or more of these projects is likely, ultimately, to find significant quantities of gold. However these projects may take quite some time as the areas and opportunities are vast. The time for the majors to reach a key economic milestone in their exploration may be longer than Triple Plate’s cash resources will last. The Company has cut expenditure significantly; for example both the Chief Executive and Chief Financial Officer have agreed to reduce their salaries and to work fewer days per week. The Directors currently estimate that the Company has sufficient funds to continue to operate the existing business into 2014, without the need to raise further money. TPJ remains alert to opportunities to create value for shareholders by selling one or more of the interests in the joint ventures.

ValiRx (LON:VAL 0.452p / £7.27m)*
VAL Update
AIM listed life science Company in clinical development with anti-cancer diagnostics and therapeutics for personalised medicine announced an update following its placing to raise £2.03m (announced 19/11/12).   The fund raising now provides the Company with the required resources to take the Group’s leading anti-cancer therapeutic VAL201, through first in-human clinical trials, according to the Company. To this end, the Company has commissioned the manufacture (to clinical grade) of a sufficient amount of the lead compound VAL201, to enable first in-human clinical testing to be undertaken, which is the next step in its clinical development. The Company is retaining the services of various necessary technical personnel and other specialists required to conduct the First In-Human Trial.  Additionally, ValiRx is currently concluding specific contractual arrangements with its preferred clinical trial centre. This follows on from recent meetings with the regulatory authorities at which ValiRx’s pre-clinical research and developmental results were apparently presented and scrutinised.  The authorities provided positive feedback to the Company and shared their thoughts over the scope and direction of the initial trial, the Company said. In parallel with the manufacture of sufficient compound, the Company is completing its trial documentation in collaboration with its various clinical stage suppliers, contactors and collaborators.  The Finnish biomarkers unit has grown steadily according to ValiRx and its facilities and expertise will be used in support of the clinical trial for VAL201.

ViaLogy (LON:VIY 2.375p / £22.0m)
VIY Shale oil development
Under one of its Master Services Agreements with a Supermajor client, ViaLogy has been directed to expand its QuantumRD(R) analysis work to locating unconventional oil deposits in tight shale formations. The client’s area of interest comprises several thousand square miles that are believed to hold commercially viable quantities of oil within shale beds if it can be accurately located. In this case, the shale is known to be “tight”, meaning that total porosity is very low, and to accurately identify areas where porosity and permeability levels reach minimal producible levels is critical. ViaLogy’s second task is to map optimal horizontal drilling well trajectories through the sufficiently porous shale it has located, specifically through zones that are amenable to fracking. What makes ViaLogy uniquely capable is QuantumRD’s ability to resolve subtle changes in shale stratigraphy below the level of 3D seismic resolution. In this project, the 3D seismic data is older and was not originally acquired to image shales. Even with newly acquired seismic data, conventional processing and interpretation could not fully characterise these shales without costly exploratory drilling. If QuantumRD can utilise the legacy data successfully to show both required porosity and “frack friendly” drilling routes, it will avoid both the costs of re-acquiring seismic data across the entire field and of drilling marginal wells.

*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.

13 November 2012

This week: another leg up for 3LEG, CWR prepares to power down, price falls for GEMD

The main indices lost ground last week after the euphoria over a decisive US election result was quickly overtaken by the realities of US fiscal cliff and weak European growth, which was downgraded, again, by the European Commission. The FTSE 100 fell 90 points to close at 5,769 on Friday and the AIM All Share fell 12 points to 692 on Friday. The economic calendar this week is busy including the release of inflation data in the UK and the US, and the ZEW (Zentrum fuer Europaeische Wirtschaftsforschung GmbH) Survey for the Euro area. However, early indications so far are that any economic news is likely to be drowned by reports of disagreement between the EU and the IMF on how to deal with Greece’s debt.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

3LEG Operational Update, AYM LIM C$30m financing, CEN First Day of AIM Trading, CWR Wind Down of Business, CRG Offer by 2IL Orthopaedics Ltd, DDD China’s i-Café, GEMD Trading update, GRL Sangola drilling results, IDOX trading update, INS Contract Win with U.S. Government, NWR Ahead of schedule, OMIP licenses Sooty content, OXB Patent triggers milestone, PET 1bn barrel prospect, QPP new 5 year contract, RMM New appointment, SOLG Ecuador update, SUMM endpoints met in Phase I trial, TMZ Board changes, ZTA Project update

3Legs Resources (LON:3LEG 43p / £36.46m)
An independent oil and gas group focusing on the exploration and development of unconventional oil and gas resources announced an operational update. The Company commenced further testing of the Lebien LE-2H horizontal well on 27 October 2012, flowing natural gas initially with the assistance of a nitrogen lift.  The well has continued to flow natural gas unassisted, through 3½ inch tubing, since the nitrogen lift was suspended on 29 October.  The well has flowed continuously and unassisted at a rate of between 560 and 780 mscf/d of natural gas over the 8-day period since 29 October.  This performance represents a significant improvement on the result achieved when the well was first tested in 2011 where the well flowed, with the assistance of a nitrogen lift, at a rate of between 450 and 520 mscf/d over an 8-day period prior to being shut in.  The plan is to continue further testing of the well in order to determine a stabilised flow rate and to gather additional data on well performance.

Anglesey Mining (LON:AYM 7.4p / £11.88m)
Anglesey Mining announced that its associate Labrador Iron Mines Holdings Limited (TSX:LIM) has completed its previously announced bought deal public offering of C$30,000,000 in common shares of LIM at a price of C$1.00 per common share. Anglesey has participated in the financing by the purchase of shares priced for a total consideration of C$1,500,000 (approximately £935,000). The funds for this share purchase have come from Anglesey’s working capital. The Anglesey directors believe that its remaining working capital will be sufficient to sustain Anglesey and to finance the completion of the scoping study on the Parys Mountain project which is currently in progress.

Centurion Resources (LON:CEN 1.125p / £2.59m)
Centurion Resources, the natural resource company focussed primarily on the exploration and development of copper assets in Austria, was admitted to trading on AIM yesterday.  The Company raised £1m by way of a placing at 1 pence per share.  The Company has an experienced Board of Directors and management team including Peter Landau, Alastair Clayton and Greg Kuenzel who have extensive resource and transactional experience and a large network of European mining contacts.  The funds will be used to acquire and develop the 33 sq km Mitterberg Copper Exploration Licences in Salzburg, Austria – including the previously producing Mitterberg Copper Project. The Mitterberg district estimated to contain the largest copper concentration in the Eastern Alps and so there is the potential for a significant value uplift for the Project through a detailed exploration programme. The Board of Directors is additionally focussed on identifying and evaluating other opportunities for the acquisition of complementary natural resources properties. Centurion Chief Executive Officer Alastair Clayton said: “The Mitterberg Copper Project is a highly prospective, previously operating high grade copper mine, located in an area of significant mineralisation in Austria.”

Ceres Power Holdings (LON:CWR 2.05p / £1.77m)
The Company noted the recent positive movement in the share price. Following the announcement by the Company on 4th October 2012 regarding its funding position, the Company has continued to explore various strategic options and these discussions are on-going. In the event, the Company is not able to progress any proposals to a successful conclusion, it will commence an orderly wind down of the business as previously announced. The Company will update shareholders in due course.

Corin Group (LON:CRG 68.875p / £29.47m)
The Boards of 2IL Orthopaedics Limited and Corin Group announced that they have reached agreement on the terms of a recommended cash offer to be made by 2IL for Corin. Under the terms of the Offer, Corin Shareholders will receive 70 pence in cash per share. The Offer represents a premium of 21.7 per cent. to the Closing Price of 57.5 pence per Corin Share on 5 November 2012 (being the last Business Day prior to the announcement by Corin that it was in advanced discussions with 2IL). The Offer values Corin at approximately £30.5m. 2IL is a new company that has been formed by the 2IL Shareholders for the purpose of making the Offer. The Corin Directors intend to recommend unanimously that Corin Shareholders accept the Offer, as they have irrevocably undertaken to do so in respect of their entire beneficial holdings, which, in aggregate, amount to approximately 0.18 per cent. 2IL has received irrevocable undertakings representing, in aggregate, approximately 34.3 per cent from Aberforth Partners LLP and Schroder Investment Management. Further, 2IL has received letters of intent from Legal & General Investment Management Limited and BlackRock Investment Management (UK) Limited, to accept the Offer in respect of 24.0 per cent.

DDD Group (LON:DDD 26.25p / £35.39m)
The 3D solutions company announced the nationwide launch in China of Hangzhou ShunWang Technology Co., Ltd.’s 3D gaming technology, incorporating DDD’s TriDef 3D software, in i-Cafés throughout China. DDD’s TriDef 3D software has been integrated into ShunWang’s WangWei Master Portal software for internet cafés, resulting in a new 3D game play option for i-Café visitors. The launch coincides with ShunWang’s annual products conference in Hangzhou, China and follows previews of the new software in major cities across China. ShunWang has an innovative franchise model which has resulted in its quick expansion to over 90,000 of its i-Café Mavin internet cafes in China. ShunWang has an installed base of over five million PCs, and estimates that over 50 million people visit a ShunWang i-Café each day. i-Café Mavin is the largest internet café chain in China and the only one that is publicly traded. Using TriDef, ShunWang’s new 3D portal gaming software allows 75 of the latest Chinese PC games to be played in 3D “off the shelf” even if they were not specifically developed for 3D. By the end of 2012, over 100 Chinese titles are expected to be available.  The introduction of the new 3D game feature in the i-Café Mavin chain is expected to create further opportunities for DDD’s PC software licensees, including LG Electronics and AOC, to supply their 3D monitors to the internet café operators. DDD receives software license royalties from the 3D monitor manufacturers.

Gem Diamonds (LON:GEMD 158.125p/ £218.63m)
Gem Diamonds, the producer of high value diamonds, has provided an update for the period from 1 July to 11 November 2012. During this period, the Letšeng mine in Lesotho achieved 12 months LTI-(Loss Time Injury) free on 4 November 2012. However, the diamond mining industry continued to experience rough price headwinds during the period. An average value of US$1,673 per carat was achieved for exports in Q3 2012, compared with US$2,426 per carat in Q3 2011. Ten rough diamonds achieved an average value in excess of US$1m each during the period (15 in the corresponding period in 2011). Ellendale produced strong operational performance with 41,680 carats recovered in Q3 2012, up 28 per cent on Q3 2011. The Group had US$94m in cash as at 31 October 2012. A Term Sheet has been signed with Nedbank for a US$20m three year Revolving Credit Facility providing funding flexibility for the Group.

Goldstone Resources (LON:GRL 2.725p/£8.72m)
GoldStone Resources, which is focused on gold exploration in West and Central Africa, has provided drill results for its Sangola project in Senegal. Drilling results confirm gold mineralisation two kilometres to the south-west, along strike of the previously reported mineralisation in the central part of Thiabedji. Best gold intersects include 3 metres @ 2.4 g/t, 6 metres @ 0.9 g/t and 6 metres @ 0.6 g/t.  The management believes these results confirm a bedrock gold source for the Thiabedji surface anomaly and that the potential exists for additional higher grade zones in this gold system.

IDOX (LON:IDOX 41.125p / £143.13m)
IDOX, the supplier of software & services, has issued a trading update for the year ending October, ahead of its final results which will be posted on 12 December. The Company’s three key metrics – revenue, EBITDA and adjusted pre-tax profit – are all expected to be comfortably ahead of consensus market expectations for the full year. Like-for-like organic growth has also been encouraging in both the public sector and engineering software divisions, which, together with an active acquisition programme, is expected to have delivered significant top line revenue growth in the last fiscal year.

Instem (LON:INS 106.5p / £12.53m)
Leading provider of IT solutions to the global early development healthcare market announced that the National Institute of Allergy and Infectious Diseases (NIAID), part of the National Institutes of Health (NIH), has selected Instem’s integrated Provantis(R) preclinical software suite to help advance research programs against infectious, immunologic, and allergic diseases. Provantis is being deployed within U.S. based laboratories where NIAID conducts basic and applied research activities aimed at improving public health in the United States and around the world. Phil Reason, CEO of Instem plc, commented: “It is a great affirmation of Instem’s products that another US Government Agency has selected our software. The award of this contract is very exciting for Instem as the NIH invests over $30.9 billion annually in medical research and Instem has been actively targeting institutions and projects directly or indirectly funded from this budget.”

New World Oil and Gas (LON:NEW 8.875p / £31.84m)
Oil and gas exploration and development Company focused on Belize and Denmark announced that drilling of the Blue Creek #2 well at the B Crest prospect on its flagship Blue Creek Project, located in the productive Petén Basin in Northwest Belize, remains ahead of schedule and in line with the Company’s geologic prognosis.  Additionally, the Company announced that due to the current programme being US$750,000 under budget, New World has decided to use this opportunity to drill into the Y3 formation and the Hillbank intervals and test this area where there remains considerable potential for the existence of multiple productive horizons.  The Company expects to reach the revised total depth of 10,450ft, on or before 15 November 2012.  Following completion of the drilling, New World will then evaluate the intervals which have oil shows on both the mud logs recorded while drilling, and the electric logs which will be recorded after drilling, to ascertain amongst other factors the oil and gas saturation levels, porosity and thickness of the reservoirs.  The Company will then determine at what depth and which zones to commence well testing operations.

One Media iP Group (LON:OMIP 4.1p / £2.24m)*
One Media, the profitable Netlabel and consolidator and acquirer of music and video rights, announced an exclusive licencing deal on Monday for the worldwide rights to material from Sooty, the longest-running children’s TV programme in the UK. One Media now has exclusive control of a variety of classic Sooty content including eight TV shows presented by Sooty’s creator, Harry Corbett. The shows date back to the original Sooty episodes of the 1950’s all the way through to the 1970s including such classics as The Sooty Olympics and Sooty’s Birthday. One Media also has the rights for The Sooty Radio Show and a feature length special entitled “Sooty – The Big Day Out” with Richard Cadell. One Media will now look to derive value from the content by packaging it for sale across a variety of digital platforms including iTunes, Amazon, and YouTube. Michael Infante, CEO and Chairman of One Media said: “Our expansion into acquiring more content to meet the demands of the emerging Smart TV market will continue to be a priority.”

Oxford Biomedica (LON:OXB 2.31p/£32.53m)
Oxford BioMedica, the gene-based biopharmaceutical company, has announced that the Carnegie Institution for Science and the University of Massachusetts Medical School has been granted a key US patent for the use of RNA interference (RNAi) to inhibit expression of a target gene in animal cells, including mammalian cells.  This patent covers the delivery of RNAi using lentiviral vectors and, as a result, triggers a modest milestone payment by Oxford BioMedica for its exclusive rights to this technology. This key RNAi technology was invented by Nobel prize-winning scientists Andrew Z. Fire, PhD, while he was at the Carnegie Institution, and Craig C. Mello, PhD., a Howard Hughes Medical Institute Investigator and the Blais University Chair in Molecular Medicine at UMMS. In a separate agreement, originally signed in January 2008, the Carnegie Institution and the UMMS have agreed to subscribe for a total of 7.9m shares at 2.4665 per share.

Petrel Resources (LON:PET 19.25p / £14.76m )
Petrel Resources provided a technical update on work done on its 100 per cent owned Quad 35 Licensing Options (11/4 and 11/6) on Blocks 35/23, 35/24 and the western half of 35/25, and Quad 45 Blocks 45/6, 45/11 and 45/16 in the Atlantic Margin. These are located in the highly prospective South Porcupine Basin, in the Irish Atlantic Margin. These blocks cover approximately 1,400 kilometres squared in total, in the northern and eastern sections of the Porcupine Basin. Detailed modelling has outlined a one billion barrel potential on Quad 35; part of Petrel’s 11/4 Licencing Option. Targets are accessible with one well (i.e. vertically stacked targets) having been mapped at several levels. Petrel has mapped closure at its Quad 45 prospects against a major boundary fault and outlined a number of vertically stacked targets. David Horgan, Managing Director of Petrel, commented: “We have long known that Ireland’s offshore Porcupine Basin is a hydrocarbon province. There are established petroleum systems, reservoir sands and possible traps at several levels. Our recent work has identified a number of high-potential prospects, at least one of which, we believe, has a billion barrel potential.”

Quindell Portfolio (LON:QPP 14.375p / £36.59m)
The provider of sector leading expertise in software, consultancy and technology enabled outsourcing in its key markets, being Insurance, Telecommunications and their Related Sectors, announced the signing of a new five year contract, with on-going maintenance and support, for its market leading claims and analytics software with one of the world’s leading risk managers. The signing of the contract follows a competitive tender against all of the credible players in the market for this size of implementation for a major insurance intermediary. The contract will see Quindell provide its market leading Challenger ICE Claims solution, supported by the Challenger ICE Track data analytics and business intelligence platform. This will enable the risk manager to deal efficiently and effectively with all property insurance claims it receives in the UK, and has the potential to extend to other lines of business and geographies, most likely in Australia and North America.  Supporting the end-to-end claims management process, Challenger ICE Claims and ICE Track enables automation of current manual processes to improve accuracy in claims handling, faster settlement and more effective customer service together with management information and real-time analytics to assist in managing the client’s business. Rob Terry, Chairman and Group Chief Executive of Quindell, said: “Most significantly, our recent announcements have been focused on the motor claims market place due to the significant regulatory change occurring in the industry and the substantial opportunity that is presented to us.  As we move into 2013, we are confident of announcing further deals which demonstrate our ability in property claims, both from a technology and an outsourcing perspective, where we believe we can bring as unique and compelling propositions as we have delivered for motor claims, further disrupting current market dynamics to drive down the cost of claims.”

Rambler Metals & Mining (LON:RMM 37.75p / £53.76m)
Rambler Metals and Mining has announced the appointment of Mr. Robert P. McGuire, P. Eng. as the Company’s new General Manager at the Ming Copper-Gold Mine. Robert McGuire is a native of Atlantic Canada and has over 35 years experience in underground mining, with a diverse background in supervisory and managerial positions. He has worked in a variety of jurisdictions including Canada, Mexico, Chile, Alaska, Zambia, Bolivia, and Argentina. Mr. McGuire has been a registered Professional Engineer for over 20 years and will be relocating to the Town of Baie Verte to be closer to the Ming Mine.

SolGold (LON:SOLG 3.5p/£14.85m)
SolGold, the gold and mineral exploration company focused on the Solomon Islands, Queensland, Australia and northern Ecuador, has provided an update on exploration activities at the Cascabel gold-copper porphyry project in Ecuador. The Cascabel Project is a joint venture between SolGold and TSXV listed Cornerstone Capital Resources Inc. (CGP.TV) SolGold is directing the exploration programme and Cornerstone is implementing the programme with its experienced in-country team. Exploration has progressed with the completion of a detailed helicopter-supported magnetic and radiometric survey, and significant progress has been made towards completion of a 200m x 100m grid-based soil sampling program. Channel sampling in previously identified outcropping mineralised areas and field mapping continue to progress.

Summit Corporation (LON:SUMM 5.25p / £18.59m)*
Summit, the UK drug discovery company last week announced that the repeat dosing of the utrophin upregulator SMT C1100 for the treatment of the fatal muscle-wasting disease Duchenne Muscular Dystrophy (DMD) has successfully met the endpoints as part of a Phase 1 clinical trial in healthy volunteers.  The trial evaluated a new formulation of SMT C1100 and the results showed that upon repeat dosing, concentrations of the drug achieved in the blood plasma, stabilised at levels that from preclinical studies are expected to significantly increase utrophin protein production.  The new formulation was also shown to be safe and well-tolerated in this Phase 1 trial. SMT C1100 is a potential disease-modifying, oral small-molecule that works by upregulating (increasing) the amount of a naturally occurring protein called utrophin to maintain the healthy function of muscles.  These data strongly support the progression of SMT C1100 into the next stages of development that includes biomarker and long-term safety studies, which will be required before a DMD patient efficacy trial could commence.

Toumaz Limited (LON:TMZ 6.125p / £69.37m)
Toumaz Limited, a pioneer in low cost, ultra-low power wireless communications technology, has appointed Jonathan Apps as Chief Financial Officer with immediate effect.  John Behrendt, interim CFO, will leave the company after a handover period. Jonathan has over 16 years’ experience as a finance director, having previously been CFO of Europe’s largest independent WiFi operator The Cloud Networks for over four years.  Prior to that Jonathan was CFO of interactive TV, mobile and internet content producer YooMedia, CFO at AIM listed technology venture capital fund E-capital Investments, and European Finance Director at network integrator EQUANT Integration Services. Separately, Winston Wong has resigned from the board as non-executive director with immediate effect.

Zeta Petroleum (ASX: ZTA.AX $0.6)
Zeta Petroleum, the Romanian focused oil and gas exploration and Production Company, has provided an update on the Bobocu gas field project in which the Company has a 100 per cent interest. The geological model at Bobocu has been substantially improved and refined following incorporation of the Bobocu 310 well data including well log and pressure evaluation work. New data indicates that the Bobocu 310 well is located at the edge of a reservoir lobe and down-dip from the remaining gas. Gas has been shown in multiple places during drilling in September 2012 and wireline logs indicate the presence of a gas bearing reservoir at Bobocu. The management remains confident that the Bobocu field remains a highly prospective development project.

*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.

6 November 2012

This week: New designs for IDG, a shining update for LED, and funding to innovate at Imperial.

Small gains the in stock market in the week to Friday with the FTSE 100 rising 50 points to close at 5,859 and the AIM All Share rising by 5 points to 704. News in the US was dominated by both the political elections and weather storms, with the latter causing the NYSE to close for 2 days. Other news included the UK service sector growing at its slowest pace in two years with the PMI falling to 50.6 from 52.2 in September, joblessness in Spain increasing by 2.7 per cent in October and 171,000 new jobs created in October in the US. The week ahead sees US presidential and congressional elections, manufacturing output, Eurozone retail sales and interest rate decisions by the Bank of England Monetary Policy Committee and European Central Bank.

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Disclaimer- This document, which does not constitute research, has been issued by Hybridan LLP for information purposes only- please refer to the disclaimer in full below.

ANCR AGM today, ABH New Contract, ACHP Loan facility, AVG Divisional Disposal, BGO COO position created, BIOM Trading Update, CEY Concession Validity, CFC Amendment to Loan Notes, DAY appoints Managing Director to Retail business, DDD Patent license agreement, FPM Relinquishment of West of Shetland Licence, GTC Strong Results, HMB Partial Offer, HCM Initiates Phase I study with Theliatinib, IDG New ATM Feature, IVO’s IXICO and PsiOxus Therapeutics funding from Biomedical Catalyst, KEFI Jibal Qutman drilling update, LED Contract win,  LRL Quarterly report, MWA Operations update, NETD Resignation of CFO, NMG Positive Update, PSL Demonstration, PEBI Excellent Maiden Results,  SLG Trading update, SRES Disappointing Study, SUMM Phase 1 Trial Initiation, THAL Contract Completion, VAL Placing and notice of GM

Animalcare Group (LON:ANCR 133.5p/£27.66m)
A leading supplier of veterinary medicines held its AGM today and gave the following update to shareholders. The Board said that trading in the first four months continues its early progress and remains comfortably ahead of the prior year, in line with the market and the Board’s expectations. Management said it continues on track to launch four new products during the year ending 30 June 2013. The first of these Vitofyllin, a tablet prescribed for problems associated with canine ageing, was launched in September and is progressing well with repeat orders being received. In addition, the Company announced on 4 October the granting of a Marketing Authorisation for Marbocare, an injectable presentation of the large animal antibiotic marbofloxacin. Industrial production of Marbocare is now taking place. The Board was pleased with the underlying cash flow of the business in 2011-12 and that trend has continued in the first quarter of 2012-13. Animalcare announced in October that it is recommending a final dividend of 3.0 pence per share giving a total dividend of 4.5 pence per share for the year, up 12.5 per cent compared to 2011.

Angel Biotechnology Holdings (LON:ABH 0.09p/£3.49m)*
Angel Biotechnology Holdings, the pharmaceutical contract manufacturer, has announced the signing of a new contract with ReNeuron Group (LON:RENE 2.9p/£22.47m). This contract relates to the expansion of CTX cells, the production of a GMP Drug Substance batch and associated testing. The contract is scheduled for completion in the current financial year. Mr Nicholas Smith, Non-Exec Chairman of Angel said: “Angel continues to build on its track record of providing its expertise and services to ReNeuron Group plc. The new contract will demonstrate Angel’s ongoing ability to respond to the needs of its clients to provide high quality, reliable and value-for-money services.”

Asia Ceramics (LON:ACHP 57.5p/ £6.32m)
Asia Ceramics, the China focused retailer of ceramic tiles and sanitary ware products, has reported that trading since June has slowed as a result of the weakening of the Chinese market and in addition there has been a drop off in the level of export sales in the period. Whilst the first half of the year showed encouraging levels of both sales and profits, the board believes that the results for the second half and therefore the overall year ending December 2012 will be affected by a combination of slower sales and decreased margins that the Company is facing in order to remain competitive. The management believes the revenue for the second half will be below that in the first half, and it currently estimates that the level of profitability in the first half will not be sustained in the second half such that operating performance is expected to be materially lower than market expectations. The Company has agreed a loan with ICBC Bank in China for RMB1.6m (£0.16m) which the Company will use for working capital.

Avingtrans (LON:AVG 92.5p / £24.08m)
Avingtrans, which designs, manufactures and supplies critical components and associated services to the global aerospace, energy, medical and industrial sectors, announced that it has agreed the sale of its Industrial division, comprising the Jena Tec sub-group of companies, to Kuroda, of Japan, for a cash consideration of £13.45m. The Board believes that the Sale will enable Avingtrans to fully focus on its two core sectors through its remaining divisions, which together contributed revenues of £32.2m and earnings before interest and tax of £1.8m. The proceeds of the Sale will be used to invest further in the growth of these divisions and to reduce debt, whilst the Board also continues to evaluate acquisition targets that it believes will enhance long-term shareholder value.

Bango (LON:BGO 218p/£90.79m)
Bango, the mobile payment solutions company, announces the creation of the position of Chief Operating Officer (COO) and has appointed David Keeling in the role. The position will be responsible for service delivery, account management and will lead key operational functions currently reporting to the CEO or CFO. The Company believes the appointment will assist in commercialising further opportunities that are now arising, and strengthen its capabilities. Bango recently announced that its integration with Facebook had gone live providing Facebook with mobile web carrier billing (mobile web users are able to easily purchase digital content without the use of premium SMS messages or the limitations of credit cards) in Germany, the UK & USA, and will be expanded to other countries in the remainder of 2012.

Biome Technologies (LON:BIOM 0.08p / £4.41m)
Biome Technologies issued a trading update for the nine months ended 30 September 2012. Total Group revenues were £10.2m in the nine months (2011: £15.3m). Group revenues for Q3 were £2.7m, marginally behind Q2’s performance of £2.9m; this was primarily due to lower third party revenues from the Biotec Joint Venture. The Group’s UK cash balances at 30 September 2012 were £1.3m (30 June 2012: £1.1m). This increase of £0.2m was supported by a reduction of working capital levels and the partial repayment of loan and interest from Biotec in July 2012. During the third quarter, Biome entered into an agreement with SPhere SA to sell its 50 per cent holding in Biotec. This transaction completed on 1 October 2012 and resulted in the Group receiving £5.2m in cash. Following this disposal the Board is evaluating various options to accelerate the development strategy of the Group across its business divisions. The Board is also considering the return of any excess funds to shareholders in the context of this evaluation and expects to provide a full update at the time of its Preliminary Results. The Group’s trading performance remains in line with the Board’s expectations.

Centamin (LON:CEY 74.55p / £821.09m)
Centamin made two market updates in light of the comments made by an Egyptian administrative court, and associated media reports, regarding Centamin and its wholly owned subsidiary company Pharaoh Gold Mines (PGM). The official written judgment of the Court makes it clear that it rejects any request to terminate or treat as invalid the Concession Agreement entered into between the Arab Republic of Egypt, the Egyptian Mineral Resources Authority (EMRA) and PGM, and approved by the People’s Assembly as law 222 of 1994. The judgment further makes it clear that PGM had made the necessary notifications to be entitled to be granted an “exploitation lease” in accordance with the Concession Agreement. However, the judgment states that, although agreement was reached between PGM and EMRA with respect to the grant of the 160km(2) “exploitation lease” at Sukari, sufficient evidence was not submitted to Court in order to demonstrate that, as required by the terms of the Concession Agreement, the requisite approval from the relevant Minister had been obtained, and thus the court deemed that the process of the conversion to an exploitation lease was therefore invalid. Centamin asserts that it is in possession of the executed original lease documentation which clearly shows such approval from the Minister of Petroleum and Mineral Resources. It appears that this document was not listed in the documents supplied to the Court. As such the Company is confident that this matter can be resolved during the appeal process. Further updates will be provided to the market as and when more information is available. In the meantime normal mining operations continue.

China Food Company (LON:CFC 19.75p / £14.11m)
China Food Company, the Chinese manufacturer of cooking and dipping sauces, has announced that, following approval by the majority of A, B & C Loan Note holders, the terms of the A, B & C Loan Notes have been amended. The Loan Notes have been initially extended to 31 January 2013 to accommodate the delay in Korean regulatory approvals required to consummate the disposal of the Fuss Feed subsidiary announced in July 2012. If the disposal has not been completed by 31 January 2013 then the Loan Note holders have agreed to further extend the redemption date to 3 November 2014. A redemption premium of 1 per cent of the Loan Note holder’s original holding will be payable on redemption. The Company and the Loan Note holders have agreed that interest will be charged at a rate of 12.5 per cent per annum from 3 November 2012 to 31 January 2013; from 1 February 2013 to 30 June 2013, the rate of interest will rise to 15 per cent p.a.; from 1 July to 30 September 2013 to 17.5 per cent per annum; from 1 October to 31 December 2013 to 20 per cent per annum and 25 per cent p.a. thereafter until redemption. The Loan Note holders retain the right not to redeem their holding until maturity of the Loan Notes on 3 November 2014, in which case the interest rate will be fixed at the rate prevailing on the date of the Company’s proposed redemption. In the event the Company is unable to transfer funds from the People’s Republic of China to pay interest when due, the A, B, & C Loan Note holders have agreed that interest charged will be rolled up and compounded semi-annually to maturity.  If the Loan Notes are not redeemed by 31 December 2012, the price at which the Loan Notes are convertible will be re-set to the lower of the average mid market price for the period of 20-31 December 2012 and 19p per ordinary share being the closing mid price on the day preceding this announcement. The total amount of Loan Notes currently in issue is £4.32m.

The Company continues to examine alternatives for the remittance of funds from the PRC to enable the redemption of the Loan Notes and payment of semi-annual interest obligations. The Company had a gross cash balance in the PRC of approximately £6m as at 31 August 2012. The Company will appoint an independent advisor to evaluate the future strategic direction of China Food with a view to maximising shareholder value. In addition, the Loan Note holders have been granted the right to appoint a non-executive director to the Company’s board in the event the Loan Notes and accrued interest are not repaid before 31 January 2013. In terms of the China Food’s condiments business, the management is encouraged by the increased level of activity in respect of both Hao Tai Tai and Xaka for the autumn season.

Daisy Group (LON:DAY  93p/£248.28m)
Daisy Group, a leading provider of business communications services, this morning announced that it has appointed Andrew Goldwater as Managing Director for its Retail business. Andrew, who previously held the role as Commercial Director for the business communications provider, is now wholly responsible for product, marketing, sales and pricing for Daisy Retail, reporting directly into Chief Executive Officer Matthew Riley. In addition he also leads a Group commercial function, developing the product pipeline for each of Daisy’s sales channels.   Andrew joined Daisy following the 2010 acquisition of North East-based BNS Telecom. A qualified chartered accountant, achieving his ACA qualification at Ernst & Young, Andrew entered the telecoms sector with BNS, joining as Financial Controller. Within the same company he was appointed Financial Director and in 2010 appointed Commercial Director of Daisy. Managing Director Andrew Goldwater said: “Daisy is a dynamic and fast-paced organisation and, since joining in 2010, has been an exciting business to have been involved with.”

DDD Group (LON:DDD 25.5p / £34.26m)
DDD Group, the 3D solutions company, announced the signing of a patent license agreement with Samsung Electronics, allowing them to perform offline 2D to 3D video conversion. This marks a first for the Company with the agreement focusing solely on IP rights. DDD also announced that it has licensed its TriDefTM3D software to Turkey-based PC manufacturer Vestel Digital for use in 3D monitors, which sees monitors expected to ship from the current quarter and quarterly royalty revenues being paid from Vestel. During September, the Company announced interim results in which it had swung to a pretax profit (of $663,000) on the back of a 74 per cent increase in revenues to $4m, and stated that it was exploring new 3D business opportunities with the launch of the Yabazam! 3D movie app for the latest 3D Smart TVs from Samsung and LG. An upgraded version of the Yabazam 3D video app for LG 3D Smart TVs, which streams 3D programs on a video on demand (VOD) basis (Yabazam allow consumers to rent original 3D movies and TV shows), was also announced in September.

Faroe Petroleum (LON:FPM 147.75p/£313.8m)
The independent oil and gas company focusing principally on exploration, appraisal and production opportunities in the Atlantic Margin, the North Sea and Norway, announced that it intends to cease operations on the P1161 licence (Freya and Fulla), west of Shetland (Faroe Petroleum 50 per cent and operator). In July 2011 the Company drilled an exploration well (206/5a-3) on the Fulla prospect and the targeted Clair and Whiting reservoir sands were found to be oil-bearing. The results of work carried out now confirm relatively poor oil quality, smaller than expected resource size and limited access to infrastructure. No economically viable solution has been found to bring these discoveries to development at this time, and consequently the licence will be relinquished. Graham Stewart, Chief Executive of Faroe Petroleum, commented: “Faroe Petroleum adheres to a strict policy of protecting shareholder interests such that substantial development investments are only made where there is good potential for an attractive return, and unfortunately the P1161 licence does not satisfy our economic criteria…” Faroe Petroleum also today separately announced the results of the Spaniards East exploration well (Faroe 8.4 per cent – free carried). The Spaniards East well was drilled in UK block 15/21, reached a total depth of 10,694 feet and encountered 75 feet of Jurassic sands which were water wet. The well is now being plugged and abandoned. The drilling operations were undertaken by Premier Oil as operator. Faroe Petroleum had a free-carried interest of 8.4 per cent in the well (carried by Premier, Cairn and Serica) and was not required to make any cash contribution to the dry-hole cost of this well.

GETECH Group (LON:GTC 53.5p / £15.64m)
Getech, the oil services business specialising in the provision of exploration data and petroleum systems studies and evaluations, announced its Preliminary Results for the year ended 31 July 2012. Revenue for the year increased by 21 per cent to £6,441,107 (2011: £5,326,866), profit before tax was up 86 per cent to £1,246,838 (2011: £669,702) and net cash after outstanding debt rose by £1,951,169 to £2,606,020. The Company proposed a final dividend of 0.8p (2011: 0.2p), giving a total of 1.0p for the year (2011:0.2p). The Chairman noted that the roll out of Globe, with nine sponsors now signed up to the programme, is transformational for the Company both in terms of revenue growth and visibility of future income.

Hambledon Mining (LON:HMB 1.65p / £16.17m)
The Independent Directors of Hambledon Mining and African Resources announced that they have reached agreement on the terms of a unanimously recommended cash only partial offer by African Resources for up to 60 per cent. or no less than 50.1 per cent. of the issued and to be issued share capital of Hambledon. African Resources is a company incorporated specifically for making the Partial Offer. The shareholders in African Resources, including members of the Assaubayev family, are long-term investors in natural resources, metals and mining, and have a track record of effective investment and support of enterprises, both in Central Asia as well as in other emerging markets. Under the terms of the Partial Offer, Hambledon Shareholders who accept will have the potential to sell a portion of their shares at 2 pence each in cash, subject to scaling down. The Partial Offer will value the entire existing issued share capital of Hambledon at approximately £19.6m and represents a premium of approximately 66 per cent. to the Closing Price per Hambledon Share of 1.2 pence on 1 November 2012 .

Hutchison China Meditech (LON:HCM 450p/£234.22m)
Chi-Med has announced that Hutchison MediPharma Limited (HMP), its majority owned R&D company, has initiated the first-in-human Phase I clinical trial of Theliatinib (HMPL-309). This is the fourth oncology compound from the internal discovery programmes of HMP to enter into clinical development in China. Theliatinib is a novel, orally active small molecule inhibitor targeting the wild type epidermal growth factor receptor (EGFR) or resistant EGFR tumours. The first patient was dosed on 30 October 2012. This study will also evaluate its preliminary efficacy against non-small cell lung cancer (NSCLC), determine the pharmacokinetics of Theliatinib under single dose and repeat doses and explore the relationship between the Theliatinib’s activity and certain biomarkers. In pre-clinical studies, Theliatinib demonstrated strong anti-tumour activity against EGFR wild type tumours at doses that are expected to be well tolerated. Theliatinib was also found to have good pharmacokinetic properties and a favourable safety profile. These studies also exhibited good tissue distribution and stronger anti-tumour activity in EGFR wild type and EGFR resistant tumours, compared with first generation small molecule EGFR inhibitors.

i-Design (LON:IDG 38p/£5.36m)
i-Design, the leading developer and supplier of ATM and self-service marketing solutions for the banking industry, announced the launch of its new “Favourite Transaction” functionality for ATM’s. This is being rolled out across Nationwide Building Society’s self-service estate which includes 2,000 ATMs. The feature, which bolts onto the Joono platform, allows cardholders to make transactions more simply based on the most frequent transactions being presented, which adapts to habits as time goes on. Ana Stewart, CEO of i-design group plc commented, “We have had a long and close relationship with Nationwide and were delighted to be able to work in partnership to realise this global innovation using our joono platform. Extensive market research and field trials were carried out throughout the development which consistently proved that this unique service delivers great value to customers. It has been exciting to see such high take up rates and we are committed to driving further innovations through our flagship joono platform.”

Imperial Innovations Group (LON:IVO 317.5p/£316.39m)
Imperial Innovations Group yesterday announced that two of its portfolio companies have won significant funding from the government-backed Biomedical Catalyst Awards. IXICO, a leading medical imaging company, and PsiOxus, a development stage biotechnology company developing novel therapeutics for cancer and other clinically unmet diseases, will receive £2.1m and £1.7m respectively to accelerate the translation of scientific ideas into commercial propositions. In addition to the funding for PsiOxus and IXICO, a further Innovations portfolio company, Photobiotics, a multidisciplinary biotechnology company developing technologies to target drugs directly at tumours, received a smaller award from the Biomedical Catalyst earlier in the year. The government-backed Biomedical Catalyst is a £180 million funding programme for businesses and academics in the life sciences sector which is managed jointly by the Technology Strategy Board and the Medical Research Council.

KEFI Minerals (LON:KEFI 4.38p / £20.51m)
KEFI Minerals, a gold and copper exploration company with projects in the Kingdom of Saudi Arabia, has announced diamond drill results from the initial drilling programme at the Jibal Qutman Licence for the Company’s 40 per cent owned Gold & Minerals Joint Venture. The diamond drilling has yielded encouraging intersections, including 7.1m at 5.85g/t Au and 7.0m at 4.29g/t Au. The Jibal Qutman Licence was granted in July 2012 and exploration work has progressed rapidly from surface mapping and trenching, and the commencement of the first phase of diamond drilling.

LED Holdings (LON:LED 0.32p / £1.15m)
LED Holdings, which develops, manufactures and sells LED-based lighting products, has announced that its subsidiary, Shenzhen Strongbase New Opto-Electronics Technology Co. Ltd., has been awarded a contract by Xinjiang Hualong Oilfield Technological Ltd. based in Karamay, Xinjiang Province, the People’s Republic of China, for the supply of one set of reactance filtering equipment installed in and used by China National Petroleum Corporation (CNPC Xinjiang) in Karamay. The projected revenue under the Contract to Strongbase New is RMB1.52m (approximately £0.152m). Under the Contract, Strongbase New will fit out one of CNPC Xinjiang’s existing power consumption systems (which are based on traditional power generation equipment) in the oilfield with its reactance filtering equipment. It is expected that Strongbase New’s reactance filtering equipment will bring about energy consumption savings of at least 10 per cent to CNPC Xinjiang.

Leyshon Resources (LON:LRL 11p/£27.4m)
Leyshon Resources, the investor in Chinese energy assets, has provided a quarterly update to September 2012. It has recently appointed management team at Pacific Asia Petroleum Limited (PAPL), which Leyshon acquired in August for US$2.5m in cash and the issue of 10m shares, and PAPL has subsequently commenced drilling at the 708 km2 Zijinshan block located on the Eastern flank of the prolific Ordos Basin, China’s second largest and one of the world’s major gas producing basins. The new management team, which successfully drilled and appraised the recent multi-Tcf gas discoveries on the adjacent Sanjiaobei and Linxing blocks, has designed an initial three well programme to test for gas in similar formations over a 600 metre interval to a depth of approximately 2.4 kilometres. The first of two wells are expected to be completed by the end of November with completion of the third expected in the new year. The total cost for drilling, logging, casing, fracking and flow testing the three wells is estimated at around US$5m. The wells are located within 10 kilometres of a tie in point on the Lin-Lin pipeline which supplies the growing demand in Shanxi Province where well head contracts have recently been struck in the US$6-7.5 per mscf (thousand standard cubic feet) range. PAPL has a 100 per cent interest in the exploration phase of the Production Sharing Contract (PSC) with PetroChina, which has the right to buy back a 40 per cent interest at the development stage. At quarter end, the Company had A$47.8m in cash, and is due A$0.1m in term deposit interest for a total of A$47.9m (£30.8m). This is equivalent to A$19 cents per share (12 p per share). The Company has announced that a share buyback will be increased from 5.5 to 24m shares to be purchased on market no later than 12 September 2013.

Mwana (LON:MWA 5.2P/£58.02m)
Mwana Africa, a pan-African, multi-commodity resources company, has provided a quarterly update on operations for the period to September 2012. During this quarter, the Frede Rebecca gold mine in Zimbabwe sold 18,350 ozs of gold, an increase of 34 per cent over the same quarter in 2011, and achieved recoveries of 83 per cent for the quarter, highest average recoveries in 2012. It also cut cash costs to US$797/oz, compared with US$815/oz in the previous quarter.

Net Dimensions (LON:NETD 58p/ £14.69m)
Learning management software providers, NetDimensions, announced the resignation of the Company’s CFO, Clarence On Pong Wu for personal reasons. The Company stated it would make further announcements in due course with regards to a replacement. Back in September the Company announced interim results which saw revenue grow by 34 per cent to $5.9m (H1 2011: $4.4m) and a 32 per cent increase in the Company’s net cash position to $7.8m (H1 2011: $5.9m). October saw a new contract win with Finnair Flight Academy, and the successful global deployment of the NetDimensions Talent Suite at Indra, the Spanish technology multi-national.

Noricum Gold (LON:NMG (0.98p/£7.35m)
Noricum Gold Limited, the Austrian focussed gold exploration and development Company, has announced a positive exploration update from the Rotgülden gold and precious metals project. It has reported significant gold, silver and copper anomalies identified by helicopter borne electromagnetic and magnetic surveys at Wandstollen and Altenberg target areas. Encouraging results confirm the presence of gold mineralisation in previously unexplored areas along an 8km strike of positive lithology. There is also further sampling underway at the Wandstollen target and results are expected in the coming weeks. Noricum has announced the intention to implement a more advanced drilling programme adding to that already submitted to drill the lower levels of the Rotgülden mine. Noricum Gold Managing Director Greg Kuenzel said: “Having recently highlighted the significant scale of the mineralisation and the presence of multiple targets at Rotgülden through an extensive aerial survey, this follow up work is focussed on advancing and prioritising these areas ahead of resource drilling. The positive sampling results in particular are highly encouraging with significant gold, silver and copper anomalism returned from two targets, once again strengthening our confidence in the prospectivity of this project.”

PhotonStar LED Group (LON:PSL 13.88P / £13.70m)
PhotonStar LED Group, the British designer and manufacturer of smart LED lighting solutions, announced that it has been invited by ARM Holdings PLC (LON:ARM 695p/£9.6bn) to provide a demonstration of LED lighting with embedded microprocessors as part of a future markets showcase at the ARM TechCon in Santa Clara, California, on 30 October 2012. The Company believes this will significantly increase its international profile and therefore is a key event. Recently, the Company announced half year results for the six months ending 30 June 2012, with it now moving towards profitability after having seen revenues increase by 50 per cent to £3.82m (H1 2011: £2.54m), and operating losses reduced by almost a third to £0.51m (H1 2011: loss £0.71m).

Port Erin Biopharma Investments (LON:PEBI 6p / £1.98m)
Port Erin, a Company investing in the biotechnology and biopharmaceutical sector, released its final results for the year ended 30 June 2012. The Company raised net cash of just under £2.7m (£3.0m before listing expenses) in September 2011. Assets have increased to £3,156,154 – nearly a 17 per cent return on available capital. This is despite the fact that it took some time to become invested. At the end of June 2012, Port Erin held cash of £237,391, a portfolio of assets valued at £2,909,183 and receivables of £9,580.  During the same period, it generated an income of £510,515 made up of £16,448 dividend income, net sales gains of £226,308 and net unrealised portfolio gains of £267,759. This, after subtracting all expenses of £94,062 and adding interest income and foreign exchange gains of £8,755, produced a total comprehensive income of £425,208. In addition, admission costs of £301,954 have been taken into equity.

Sarantel Group (LON:SLG 0.32p/ £2.7m)
Sarantel Group, the manufacturer of high-performance, miniature filtering antennas for mobile and wireless devices, has provided a trading update for the year ending September 2012. In the second half of the financial year, unit sales increased by 62 per cent while revenues increased by 160 per cent compared to the first half. Total revenues for the year are expected to be 35 per cent higher than the previous financial year. The revenue growth is primarily due to a number of military programmes now moving into production. In particular, the Company recently secured a £0.2m follow-up production order for its rugged GeoHelix GPS antenna, which is used in the US military’s Joint Tactical Radio System (JTRS) program. As announced in July 2011, the US Army has indicated a requirement to purchase more than 190,000 JTRS radios over a five year period.

Summit Corporation (LON:SUMM 4.88p/£17.26m)*
UK drug discovery company, Summit, has announced that it has initiated dosing of healthy volunteers in the Phase 1 clinical trial of SMT 19969, the novel, oral small molecule being developed as a selective antibiotic for the treatment of infections caused by the bacteria C. difficile. The trial is being supported as part of a £4.0m Translation award from the Wellcome Trust. C. difficile infection remains a serious illness in hospitals, long-term care homes and increasingly in the wider community, and current treatment options remain limited. Glyn Edwards, Chief Executive Office of Summit commented: “Our antibiotic SMT 19969 is a selective treatment of C. difficile infection and we are very excited about advancing this promising drug into human clinical trials.” The Phase 1 trial is a randomised, dose-escalating, placebo controlled study that will evaluate the safety, tolerability and pharmacokinetics of SMT 19969. Headline results from the Phase 1 Trial are expected to be reported in H1 2013.

Sunrise Resources  (LON:SRES 1.08p / £3.93m)
Sunrise Resources, a diversified mineral exploration and development specialist, advised that  the results from its scoping study for its Derryginagh barite project in Ireland, shows that a significant increase in the tonnage of defined mineralisation is required to demonstrate financial viability based on current cost estimates and product pricing assumptions – but also concludes that the mineralisation is open to expansion and recommends a programme of drilling and further metallurgical test work be undertaken.

Thalassa Holdings (LON:THAL 50p / £4.87m)
Further to the Company’s release on 11 June 2012, the Board of Thalassa announced the successful completion by WGP Survey Ltd of the seismic data acquisition survey on the Norwegian Continental Shelf for Spring Energy Norway AS. The completion of the Contract, which comprised the acquisition of six valuable high-resolution 3D data sets over 134 km(2) of shallow target anomalies in the Barents Sea, was carried out despite being severely affected by very poor weather in the North Atlantic. The Board reported that, following the successful survey in unusually challenging conditions, the Company is now in discussions with Spring Energy and other potential clients regarding possible repeat business and expanded operating opportunities in 2013.

ValiRx (LON:VAL 0.46p/£5.73m)*
ValiRx, the life science company with a focus on cancer diagnostics and therapeutics for personalised medicine, announced a conditional placing to raise £2.03m by way of issue of new ordinary shares at 0.45 pence per share. The net funds raised from the issue and allotment of the Initial Allocation Shares and the Second Allocation Shares will provide the Company with the funding required to take VAL201 through and to the end of Phase 1, VAL201’s first clinical trial. The trial is aimed at demonstrating that the compound is safe with respect to the context in which it is intended to be used and reveal what dosing level will be required to show a potential clinically measurable effect. If the Resolution is passed and the Placing Shares are issued and allotted, the Company will have sufficient funds to complete the Phase 1 clinical trial. Additionally, the Company’s GeneICE programme is proceeding as expected following the completion of the Eurostar’s Programme and VAL101 is proceeding through its pre-clinical development stages according to plan. The initial allocation is for gross proceeds of £1.13m, which represents the current limit of authorities. The Second Allocation is for gross proceeds of £0.9m and is conditional on Shareholder approval of the Resolution to dis-apply pre-emptive rights, which will be sought at the General Meeting.

*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.