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Urals Energy tumbles again as war of words with Sergey Kononov intensifies

A look at the day's major movers, including redT, Rockfire, Oilex, SPDI and Orosur Mining
Boxing gloves
The gloves are definitely off

The share price of Urals Energy PLC (LON:UEN) has fallen off a cliff in the last two months and was plunging again today.

The board of Urals Energy, the independent exploration and production company with operations in Russia, has alerted the market to an English language statement, on the website of its 98.56% owned subsidiary, JSC Petrosakh, that purports to be from Sergey Kononov, the president of Petrosakh.

READ Urals Energy facing cash shortfall as it demands subsidiary’s president resign over unauthorised loans​

The statement, which was made without the knowledge or consent of the board of Urals Energy, makes a number of allegations against the board that, according to Urals Energy’s directors, are “without substance and not supported by the facts”.

The stock market announcement from Urals does not provide a link to the Petrosakh statement but you can get an inkling of the sort of thing Kononov has been shooting off his mouth about from the lengthy list of refutations and denials in Urals Energy’s announcement.

“The board stands by the company's recent regulatory information service announcements concerning Mr Kononov and his actions. Urals Energy's shares are traded on AIM and the board has always taken care to ensure that any information it announces is not misleading, false or deceptive and does not omit anything likely to affect the import of such information,” the statement from Urals said.

The statement also points out that Kononov’s allegations that Petrosakh was mismanaged prior to his becoming president in 2017 are a bit rich given that Kononov had been general director of Urals Energy LLC, the former management company for the group’s operations, since 2014.

In terms of the commentary in the Kononov statement in relation to the independent accountant's review of Petrosakh's transactions and the effects of these transactions, the board notes that the independent review of transactions by Petrosakh that were outside of the ordinary course of business was initially proposed by Kononov via his representatives and its terms of reference were agreed with those representatives.

As announced on 22 November, the Urals board decided to delay the implementation of the review of the short-term working capital requirements of the group until Kononov has indicated whether or not he will take personal responsibility for the loans and transactions made by the group that were not authorised by the board and organise their prompt repayment.

“In respect of this matter, as announced on 17 December 2018, the board notes that Mr Kononov has made certain early stage indications that he may provide support in respect of the group's working capital deficit; however, there is no evidence of progress in respect of this matter,” the Urals statement said.

All of which has contributed to today’s 9.3% fall to 24.5p; two months ago the shares were trading at 59p but that was before the unauthorised loan can of worms was opened up.


1.15pm: redT out in the cold as German grid project is delayed​

Energy storage solutions company redT Energy PLC (LON:RED) was out in the cold after notifying the market of a delay on its German grid project.

The company said it continues to progress to close on the first 40 megawatt hours (Mwh) German project portfolio but having set a target of getting all done and dusted by the end of the year the company now believes financial close will happen in the New Year.

“This extension stems from recent modifications to the German market bidding mechanism for the Secondary Control Reserve service, which has required the project partners to undertake additional analysis to assess the impact of the modifications,” the company said.

Shares in the company were down 11.2% at 5.64p.

11.30am: Rockfire makes late bid to regain its status as a stock market star of 2018​

Rockfire Resources PLC (LON:ROCK) shares surged after it identified “outstanding past drilling results” at its Kookaburra exploration licence in Queensland.

The shares rose 4.6% to 1.15p after Rockfire announced “an outstanding gold target” following a review of historical drilling at the Native Bee prospect.

Rockfire said that results of tests on ancient samples provided the firm with “further potential to delineate a large gold inventory, adding to the excellent potential offered by the nearby Plateau and Double Event Prospects”, both of which are adjacent to the adjacent Lighthouse licence.

The announcement reapplied a bit of sheen to a stock that was shaping up to be one of the best performers of 2018 back in July on the back of some positive news flow.

READ Rockfire Resources shares jump as it unveils historical estimate for Copperhead project​

There has been plenty of positive news flow in the second half of the year as well but not enough to keep the shares at the relatively stratospheric heights of 2.1p

Today’s rise means the shares are barely changed year-to-date.

10.00am: Oilex takes advantage of share price strength to raise funds​

If they ever make a version of the soap opera Dallas on the sub-continent – a musical version, obviously – then Oilex Ltd (LON:OEX) might provide source material.

The company’s spat with its joint venture partner on the Cambay Field project has provided many ups and downs to the share price but today the shares were under the cosh because of a fund-raising.

Oilex plans to place 180.6mln shares at 0.36p a pop (roughly 6.314 Aussie cents) to raise £650,000 (A$1.14mln).

The shares were marked down to 0.35p from 0.395p overnight.

Funds raised from the placing are intended to be applied towards the working capital requirements of the company.

The placing came after the shares had been on a good run of late – although that almost goes without saying with AIM-listed resource stocks.

On 19 November, it was announced that the Gujarat State Petroleum Corporation has invoked the dispute resolution provisions of the Cambay Joint Operating Agreement, a “mere” two weeks after it was announced that the High Court of Gujarat had ordered them to do just that.  

9.15am: SPDI goes Dutch with sale of bulk of its assetss to Arcona Property Fund in an all-share deal​

Secure Property Development & Investment PLC (LON:SPDI), the South Eastern Europe-focused property company, was the top riser early doors after selling the bulk of its assets.

The shares were up 29% at 13.5p after the company sold its assets, excluding its Greek logistics properties, for €29.25mln worth of shares in the Arcona Property Fund.

Even after today’s share price rise, the market capitalisation of the company is barely above £13mln, which last time I checked is (even in this Brexit environment) considerably less than €29.25mln. On the other hand, the net asset value of the assets being sold was deemed to be €35.8mln at the end of 2017.

SPDI will receive around 2.1mln shares in Arcona plus a further half a million or so warrants in the Amsterdam-listed company. SPDI said the deal provides its shareholders with exposure to a dividend-paying fund that has a diversified portfolio of income-producing properties in various Central East European countries.

The new shares will be listed both in Euronext Amsterdam and the Prague Stock Exchange and are expected to be distributed to existing shareholders of SPDI pro-rata to their shareholding in SPDI shares.

"By combining our complimentary asset portfolios in this all-share transaction, we are creating a significant European Property company which will benefit the shareholders of both listed entities,” said Lambros Anagnostopoulos, the chief executive of SPDI.

“For our shareholders, we gain exposure to a property fund listed in Amsterdam which as a result of the deal will increase in size from ~€94.8 million to ~€161 million and its Net Asset Value from €41.9 million to €78 million, and which is generating substantial cash and issuing dividends to its shareholders. With this in mind we will be working hard with the Arcona team to finalise the deal with a view to completing the transaction in Q1 2019,” he added.

As one might expect, completion of the deal is subject to due diligence.

Dual-listed Orosur Mining Inc (LON:OMI (TSE:OMI) said its wholly-owned Uruguayan subsidiary, Loryser, has reached a payment plan agreement with creditors in Uruguay.

READ: Orosur carrying out review of operations as subsidiary hits problems at San Gregorio

The agreement contemplates that Loryser’s creditors will be paid off from the proceeds from the sale of Loryser’s assets in Uruguay together with the issuance of 10 million common shares of Orosur.

The plan is to get the process done and dusted within two years.

Proactive news headlines:

ValiRx Plc (LON:VAL) has hailed the publication of its first peer reviewed article assessing clinical trial results for its cancer drug VAL401. Data from the phase II study, completed last year in Tbilisi, Georgia, will be carried in the European Journal of Drug Metabolism and Pharmacokinetics.

Aircraft leasing company Avation PLC (LON:AVAP) has bought four new Airbus A220-300 planes which it has immediately leased out to Latvian carrier airBaltic.

Bio-technology firm Rapid Dose Therapeutics Inc (CSE:DOSE), an investee business of medicinal cannabis investor Sativa Investments PLC (LON:SATI), has been admitted to trading on the Canadian Stock Exchange. Sativa Investments, which is the UK’s first medicinal cannabis investment firm, subscribed for 400,000 shares at C$50 each in Rapid Dose Therapeutics for C$200,000 in cash ahead of the listing on Monday.

Drug discovery group Sareum Holdings Plc (LON:SAR) will tell investors 2018 has been a year of significant progress. At the company’s annual meeting, being held in the City of London, chairman Dr Stephen Parker will point to the progress of SRA737, which has been licensed to Sierra Oncology.

Consilium Group Limited’s (LON:COIN) investee company, StartupToken, has received investment from Blockwater Capital, a leading South Korean digital asset investment fund.

The Financial Conduct Authority (FCA) has expanded the scope of its investigation into the timeliness of stock market announcements by Telit Communications Plc (LON:TCM) to include the accuracy of earlier announcements made by the company.

Cradle Arc PLC (LON:CRA) has applied to put its subsidiary Leboam Holdings into provisional liquidation. Cradle Arc has a 60% stake in Leboam, which is the holding company of the Mowana copper mine in Botswana.

Asiamet Resources Limited (LON:ARS) has said it expects initial results “shortly” from a 4,500 metre drilling program at its flagship Beruang Kanan Main (BKM) Copper project in Indonesia.

Savannah Resources PLC (LON:SAV) has formalised its relationship with a university research team led by professor Noronha – the man who first discovered lithium near the company’s Mina do Barroso project in northern Portugal thirty years ago.

Sunrise Resources Plc (LON:SRES) has received 50,000 new shares in VR Resources Ltd (CVE:VRR) following the start of drilling at the Junction copper-silver-gold project in Nevada.

EQTEC Plc (LON:EQT) announced that the transition to its new nominated adviser is continuing smoothly and that the company anticipates being able to announce the appointment of the new Nomad by mid/late-January 2019 following the completion of the due diligence process and a site visit to Barcelona which is scheduled for mid-January 2019.

Chesnara Plc (LON:CSN) has announced the appointment of Mark Hesketh as its independent non-executive director with immediate effect.  The group said Hesketh has extensive financial and operational experience in financial services across country and channel boundaries, managing significant complexity, scale and diversity including in M&A and risk management having held senior roles at Standard Life PLC and Royal Bank of Scotland PLC.

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