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Northland Capital Partners View on the City - Motif Bio Plc, Active Energy Group PLC, Botswana Diamonds, Edenville Energy, Keras Resources, Savannah Resources Plc, URU Metals Ltd, Amphion Innovations Plc, Starcom Plc, Arian Silver Corp

Northland Capital Partners View on the City -  Motif Bio Plc, Active Energy Group PLC, Botswana Diamonds, Edenville Energy, Keras Resources, Savannah Resources Plc, URU Metals Ltd, Amphion Innovations Plc, Starcom Plc, Arian Silver Corp

MOTIF BIO (LON:MTFB)

SECTOR – HEALTHCARE

RATING – BUY*

MARKET CAP – £89m

CURRENT PRICE – 34p#

 

Interim results

 

NORTHLAND VIEW

Motif Bio Plc (AIM/ NASDAQ: MTFB) announced financial results for the half-year ended June 30, 2017.

 Net loss was US$29.7 million (H1-2016: US$14.2 million).

 At June 30, 2017 the Group had cash and cash equivalents of US$29.5 million. 

 At September 22, 2017 cash and cash equivalents were $18.1 million.

Motif’s interims highlight that the group is well capitalised and on target to announce top line results from its REVIVE-2 clinical trial before year end.  Given that the trial is now complete, we expect R&D expenditure to taperoff significantly. Should the Company announce positive results, we would expect a significant re-rating of Motif’s shares.       

COMPANY DESCRIPTION

Clinical stage biopharmaceutical company specialising in the development of novel antibiotics.

 

SAVANNAH RESOURCES (LON:SAV)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £33m

CURRENT PRICE – 5.9p#

Interim results 

 

NORTHLAND VIEW

 LBT in H117 increased to £1.5m from £0.8m in H116, largely to due to an increase in administrative expenses. Net cash totaled £0.4m in H117 in line with H116. 

 Production at its Omani Copper Project expected in H118.

 Construction and commissioning of the bulk sample plant at the Mutamba Heavy Mineral Sands project expected to complete by the end of the year.

 At the Portuguese Lithium Project, resource drilling is under way with the Company aiming to have a JORC Compliant Mineral Resource estimate completed before the end of the year. As a mining license and Environmental Impact Assessment is in place.

 At its Finnish Lithium Projects, Savannah is seeking expressions of interest from a number of groups with an energy metals focus.

 

Savannah Resources has been very active since the start of the year in advancing its three key projects towards near-medium-term production. Savannah’s three principal commodity areas: copper; heavy mineral sands; and lithium have all experienced price rises recently with much speculation surrounding the future supply and demand fundamentals. Savannah is now well positioned to take advantage of continued positive momentum in any of these commodities.

 

COMPANY DESCRIPTION

Savannah Resources is an exploration and development company with copper-gold projects located in Oman, a mineral sands project in Mozambique and lithium projects in Finland and Portugal.

 

ACTIVE ENERGY GROUP (LON:AEG)

SECTOR – RENEWABLE ENERGY

RATING – CORP*

MARKET CAP – £18.1m

CURRENT PRICE – 2.2p#

FY17 Interim results: focus on SE Asia and Newfoundland

 

NORTHLAND VIEW

 For the six months to 30 June 2017 Active Energy reported revenue of US$1.3m (H116 US$13.4m), an operating loss of US$(2.5)m (H116 US$0.5m profit) and a PBT loss US$(1.95)m (H116 loss of US($0.84)m).  Cash was US$2.1m (FY16: US$2.1m).

 The Company noted its reorganisation to focus on the commercial rollout of its CoalSwitch™ biofuel product and forestry management operation (Timberlands), and completion of funding (£11.6m gross) in March. Regarding disposal of its Ukranian operations AEG reports that “negotiations have now ceased” with its former COO. Equipment will be reassigned from Ukraine to Canada and operations cease in Q4.

 Timberlands is in “advanced stages of ratification” regarding a Crown Timber Licence for forestry management in Canada and is working with consultancy Zimmfor Management on regulatory compliance.

 CoalSwitch™ operator ABS has commenced construction its 5-tonne/hour facility in Utah and has ongoing discussions with Asian partners for further construction of plants.  The company emphasises the post-H1 agreement with Lumino Capital to finance and develop 8 CoalSwitch™plants across SE Asia. 

The focus of attention is, as AEG notes, on its post-H1 agreement to significantly expand its CoalSwitch™ biofuel solution in SE Asia, in addition to activation of the forestry management opportunity in Newfoundland.  

COMPANY DESCRIPTION

Active Energy Group (LON:AEG) is an international, vertically-integrated forestry management and renewable resource energy provider.  The group combines management of forestry resources with the commercial development of a proprietary solution to the integration of wood-based (biomass) fuel into existing coal-fired thermal power plants.

 

URU METALS (LON:URU)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £9.6m

CURRENT PRICE – 1.2p#

Zebediela Drill results and FY results

 

NORTHLAND VIEW

From yesterday:

 URU Metals has defined potential new lower nickel-copper horizon at the Zebediela Project, located in South Africa, in drill hole Z017. The near-surface intersection in Z017 of 323m at 0.23% Ni from 67.22m is consistent with existing drill results included in the 2012 mineral resource estimate. A lower intersection was also returned with 2.25m of 1.66% Ni and 0.62% Cu from 412m. Further sampling will now be conducted to the end of the hole as the sampling reported here ended in mineralisation.

From today:

 LBT during FY17 totaled $645k down from $1,633 in FY16, which included a $982k impairment.

 Net cash totaled $2m in FY17 compared to net debt of £112k in FY16.

Drill results from Zebediela continue to provide interesting targets for further work. A lot more drilling is required to assess the potential of the nickel-copper lower horizon discovered in hole Z017, as well as the recently discovered PGE-Au mineralisation in hole Z019.

 

COMPANY DESCRIPTION

URU Metals is an exploration company focused on the Zebediela Nickle project in South African and the Närke Oil-Uranium Project, located in Sweden.

 

Keras Resources (LON:KRS)

SECTOR – MINING

RATING –  CORP*

MARKET CAP – £8.2m

CURRENT PRICE – 0.38p#

Directorate change

 

NORTHLAND VIEW

 Peter Hepburn-Brown has resigned as a Director of Keras Resources.

Peter recently took on a new role in an ASX listed gold company and plans to focus on this new role, as well as on his Directorship in Calidus Resources.

COMPANY DESCRIPTION

Keras Resources is an exploration company with interests in gold projects, located in Australia, a manganese project and a cobalt-nickel project, located in Togo.

 

Edenville Energy (LON:EDL)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £8m

CURRENT PRICE – 0.7p#

Wash plant constructed

 

NORTHLAND VIEW

 Edenville Energy has completed the construction of the wash plant at the Rukwa Coal Project, located in Tanzania.

 The plant is currently undergoing commissioning and testing. Edenville is targeting first production of washed coal for sale next week.

 The weighbridge has also been installed and the laboratory, office and stores are in the final stage of construction.

 Several industrial users have requested test shipments that will be dispatched over the coming weeks.

 

Positive news for Edenville Energy with the commissioning of the wash plant at the Rukwa Coal Project now underway. The production of first washed coal will be an important milestone for the Company and we look forward to further details regarding customers, sales contracts and production volumes.

 

COMPANY DESCRIPTION

Edenville Energy is moving the Rukwa Coal Project towards near-term production alongside advancing its Coal to Power Project.

 

Botswana Diamonds (LON:BOD)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £7.7m

CURRENT PRICE – 1.7p#

Ontevreden kimberlite discovery update

 

NORTHLAND VIEW

 Sampling at the recently discovered Ontevreden kimberlite pipe has returned abundant G10, G9 and eclogitic garnets which are typically found in high-grade kimberlites.

 Follow up drill programme to follow later in the year.

 

The mix of garnets returned from the sampling programme conducted by Botswana Diamonds and joint venture partner Vutomi at the Ontevreden kimberlite pipe is exciting as this distribution is often associated with highgrade kimberlite pipes. The partners plan to commence drilling to define the full extent of the pipe before the end of the year.

 

COMPANY DESCRIPTION

Botswana Diamonds is a diamond focused exploration company that has a joint venture with Alrosa in Botswana, an interest in the Maibwe discovery also in Botswana and an interest in 10 prospecting rights that contains 20 kimberlites, in South Africa.

 

STARCOM (LON:STAR)

SECTOR – TECHNOLOGY

RATING – BUY*

MARKET CAP – £4.2m

CURRENT PRICE – 2.1p#

TARGET PRICE – 3.7p

Interim results, revenue -23%YoY, gross margin improvement 

 

NORTHLAND VIEW

 For the 6 months to 30 June 2017 Starcom reported revenue of US$1.922m -23% YoY (H116: US$2.507m). 

 Gross profit was US$0.903m, 47% margin, compared to US$0.952m in H116, 38% margin,  and 27% margin in FY16, resulting from improved purchasing and an increased contribution from higher-margin products such as Watchlock.

 SG&A costs increased 5%YoY (US$1.471m), despite savings on office rent, due to increased R&D costs, resulting in an operating loss of US$(0.568)m compared to a US$(0.442)m loss in H116. H117 net loss was US$(0.925)m compared to a loss of US$(0.613)m in H116. Starcom noted that a 10% US$/shekel currency movement added US$220,000 in exchange-related losses. Period-end cash was US$281,000 compared to US$35,000 at 31 December 2016.

 Starcom notes ‘significant opportunities’ for H217, citing its agreement with CropX as an example of the applicability of its (Kylos Air) technology, its 3-year collaboration agreement with a European industrial group and ongoing work with a producer of electric motor bikes.

Throughout H117 Starcom has announced initiatives which it now expects to develop from H2, whilst maintaining cost control in the face of adverse currency movement and R&D investment. In particular, H117 improved gross profitability provides an indication of the potential from value-added products.

 

COMPANY DESCRIPTION

Starcom Group develops and manufactures technology designed for tracking vehicle fleets, equipment, people, containers and merchandise. Starcom specialises in combined cellular/GPS tracking systems for fleet management to both protect the vehicle and driver and locate equipment and people.

 

AMPHION INNOVATIONS (LON:AMP)

SECTOR – HEALTHCARE

RATING – CORP*

MARKET CAP – £4m

CURRENT PRICE – 1.75p

Interim results

 

NORTHLAND VIEW

 Amphion Innovations announced interim results for the six months to 30 June 2017.

 Net Asset Value (NAV) per share was -1p (US -$0.02 cents) at Period-end from -2.4p (US -$0.03 cents) as at year end. 

 This increase was due almost entirely to the movement in value of portfolio company Motif Bio plc. 

 

Amphion’s results highlight how the Group’s NAV is dependent on the share price performance of its portfolio company Motif Bio plc. Motif is on target to announce top line results from its REVIVE-2 clinical trial before year end. Should the company announce positive results, we would expect a significant re-rating of both Motif’s and Amphion’s shares. Also of note, Amphion is advancing its next portfolio company, Polarean, towards an AIM IPO. Polarean is a clinical-stage, revenue generating, medical imaging product company. 

 

COMPANY DESCRIPTION

Amphion Innovations is an incubator of medical, life science, and technology businesses.

 

ARIAN SILVER CORPORATION (LON:AGQ)

SECTOR – MINING

RATING – CORP*

MARKET CAP – £2.4m

CURRENT PRICE – 0.6p#

Interim results and lithium project update

 

NORTHLAND VIEW

 LBT during H117 totaled $648k down from $805k in H116, which included a $202k impairment.

 Net cash totaled $779k in H117 down from $1,048k in H116.

 Following poor results at its group of lithium projects where it recently completed a drill programme, the Company may move to terminate the option agreement over these assets. It is presently negotiating with the vendor of the project to vary and extend the agreement to encompass the additional mining concessions in its portfolio.

 Arian has decided to further explore its existing silver projects until the silver price has demonstrated a recovery.

As is often the case during exploration, Arian Silver Corporation’s initial drill programme on its lithium projects has returned results that the Company does not believe are significant to following up. While at its silver projects the Company is not planning any additional exploration while the silver price remains low. As a result, the Company is now seeking additional lithium projects to move the Company forward.

COMPANY DESCRIPTION

Arian Silver Corporation is a Mexican focused exploration company.

1. Northland Capital Partners Limited (“Northland”) acts as Nominated Advisor and/or Broker to the company.

2. Northland) and/or its affiliates companies do beneficially own 1% or more of any class of the issuer’s equity securities, as of the end of the month immediately preceding the date of issuance of the research report or the end of the second most recent month if the issue date is less than 10 calendar days after the end of the most recent month. 

3. The authoring analyst or any associate of the authoring analyst does maintain a long or short position in any of the issuer’s securities directly or through derivatives, including options or futures positions.

4. Northland, its affiliated companies, partners, officers, directors or any authoring analyst of Northland has provided services to the issuer for remuneration during the preceding 12 months other than investment advisory or trading services.

5. Northland or any of its affiliated companies has performed investment banking services for the issuer during the 12 months preceding the date of issuance of the report.  

6. A partner, director, officer, employee or agent of Northland or any of its affiliated companies is an officer, director, employee or advisor of the issuer.  Disclosures are applicable for all companies

7. The authoring analyst, or any associate of the authoring analyst, has viewed the material operations of the issuer. 

8. The authoring analyst, or any associate of the authoring analyst, received reimbursement for travel expenses.

9. Northland makes a market in the securities of this company.

 

 

DISCLAIMER

This document is provided solely to enable clients to make their own investment decisions. It may therefore not be suitable for all recipients and does not constitute a personal recommendation to invest. It does not constitute an offer or solicitation to buy or sell securities or instruments of any kind. If you have any doubts about the suitability of this service, you should seek advice from your investment adviser. This document is produced in accordance with UK laws and regulations. It is not intended for any person whose nationality or residential circumstances may render its receipt unlawful.

The past is not necessarily a guide to future performance. The value of shares and the income arising from them can fall as well as rise and investors may get back less than they originally invested. The information contained in this document has been obtained from sources which Northland Capital Partners Limited believes to be re¬li¬able. The Com¬pany does not warrant that such information is accurate or complete. All estimates and prospective figures quoted in this report are forecasts and not guaranteed. Opinions included in this report reflect the Company’s judgement at the date of publication and are subject to change without notice. If the investment(s) mentioned in this report are denominated in a currency different from the currency of the country in which the recipient is a resident, the recipient should be aware that fluctuations in exchange rates may have an adverse effect on the value of the investment(s). The listing requirements for securities listed on AIM or PLUS markets are less demanding, also trading in them may be less liquid than main markets.

Northland Capital Partners Limited and/or its officers, as¬sociated entities or clients may have a position, or other material interest, in any securities men¬tioned in this report. Northland Capital Partners Limited does not provide recommendations on securities of firms with which it has a corporate relationship. More information about our management of Conflicts of Interest, Investment Research Methodology & Definition of Recommendations can be found at www.northlandcp.co.uk 

Northland Capital Partners Limited is authorised and regulated by the Financial Conduct Authority and a Member of the London Stock Exchange.

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