Amphion Innovations plc (LON:AMP) – CORP: Placing
Market Cap: £14.6m; Current Price: 8.75p
£1.54m raised
- Amphion has raised £1,538,840 by the issue of 29.3m new ordinary shares at an issue price of 5.25p, representing a 22% discount to the Company's 10 day average closing price. Northland Capital Partners acted as broker to the placing.
- The placing was oversubscribed.
- Net proceeds will provide working capital for the Company, as well as enable the Company to invest in current Partner Companies, restructure its existing debt, and support DataTern's patent litigation programmes.
NORTHLAND CAPITAL PARTNERS VIEW: Amphion has successfully floated two portfolio businesses (namely Kromek plc and Motif Bio plc) on AIM over the past two years, generating considerable shareholder value. Today’s placing supports the group’s plans to continue developing its portfolio.
W Resources (LON:WRES) – BUY*: La Parrilla update
Market Cap: £9.7m; Current Price: 0.3p;
Drill programme making good progress
- W Resources has completed 950m of a 1,500m diamond drilling programme at La Parrilla as part of its development programme for the fast track mine. The holes are being drilled adjacent to the original mining pit that contains the existing resource.
- The results for the first phase of the Definition Study for the mine will be released later in June with the updated mineral resource and reserve estimate included in the September quarter.
- Forecasts, and price target remain under review. BUY rating maintained.
NORTHLAND CAPITAL PARTNERS VIEW: W Resources is now over half way through its 1,500m drill programme at La Parrilla. This infill drill programme will define the mine plan for the initial mining operations and should increase the size and upgrade category of the resource.
DiamondCorp (LON:DCP) – BUY: Funding update
Market Cap: £35.6m; Current Price: 11.5p; Target Price: 16.6p (from 16.4p)
Termination of Acrux royalty and placing for £3.18m
- DiamondCorp opts not to proceed with the Acrux royalty.
- The company has completed a placing of 31,837,000 shares at 10p per share to raise £3.18m as an alternative.
- The Company is also conducting an open offer to existing investors at the same price to raise up to £2m.
- Forecasts updated and a minor upgrade to our price target to 16.6p (from 16.4p). BUY rating maintained.
NORTHLAND CAPITAL PARTNERS VIEW: Based on the discovery of 4.38ct D Type IIA white diamond from K6 development kimberlite, DiamondCorp has concluded that the royalty arrangement will not be in the Company’s best interest. Following the completion of the placing, the management team believes that it will have enough cash to make up for both the base-case shortfall (disclosed 26/05/15) of £1.8m and the sensitised-case of £2.8m. As a result, Lace should now be fully funded to commercial production. The additional funds raised from the open offer will be used for working capital and enhancing the mines economics. We have updated our forecasts with the result of the placing and the removal of the Acrux royalty but we have not included the open offer as the quantum of the funds raised is uncertain at this stage. The net result is actually relatively minor increase in our price target to 16.6p (from 16.4p) as the near term dilution from the placing is outweighed by the longer term benefit of not having the 3% royalty. We assume a long term diamond price of US$160/ct but if the discovery of the high value D Type IIA white diamond proves to be the first of other similar stones there could be a significant increase to our long term dollar per carat valuation, at which point the placing would have significant benefits to our valuation over the royalty.
Churchill Mining (LON:CHL) – CORP: Arbitration update
Market Cap: £54m; Current Price: 41.5p
From yesterday: Files Reply Memorial to Indonesia’s application for dismissal
- Churchill has filed its formal response to Indonesia’s Application for Dismissal of the ICISID arbitration case due to document forgery.
- Churchill argues that the evidence attached with its reply contradicts Indonesia’s dismissal application. The key aspects of this are:
- Contrary to Indonesia’s assertion that the applications for the four East Kutai Coal Project (EKCP) licences were rejected at an early stage, Churchill has located final drafts for two of these licences that have coordination initials of senior officials of the Regency of East Kutai.
- All four of the allegedly “non-existent” EKCP licences are documented in the register book of the Legal Section of East Kutai that was submitted by Indonesia under orders from the Tribunal.
- The “irregularities” that Indonesia presented as corroborating signs of forgery are present on many other mining decrees that were also submitted by Indonesia.
- There is conclusive evidence demonstrating the accounts of Indonesia’s key witnesses are inaccurate.
- There is a vast body of undisputed documents that show the true footprint of the EKCP licences, some of these contain the signatures of Indonesia’s witnesses who denied processing or even knowing about the allegedly forged EKCP licences in their witness statements.
- The next steps in the arbitration process leading up to the hearing on document authenticity commencement on the 03/08/15:
- 03/07/15 - Simultaneous answers to comments on document inspection and other documents
- 09/07/15 - Identification of witnesses and experts to be cross- examined at the Hearing
- 13/07/15 - Pre-hearing tele-conference
- Another development is that Indonesia no longer alleges that Churchill participated in the alleged scheme to defraud the State. Indonesia’s position is now that Churchill’s former joint venture partner, the Ridlatama Group, was the sole perpetrator of the allegedly fraudulent scheme.
NORTHLAND CAPITAL PARTNERS VIEW: These are positive developments for Churchill Mining in relation to its international arbitration case against the Indonesian Government. The Indonesian Government is no longer claiming that the Company forged licence documents, a positive step forward, but it is continuing to maintain that the documents were forged by the Company’s former joint venture partner. However, the evidence that has come from submissions by Indonesia to the tribunal appears to contradict Indonesia’s allegations. The discovery of (i) two drafts of the licences that have the initials of senior officials of the Regency East Kutai and (ii) four of the allegedly non-existent EKCP licences appearing in the register book of the Legal Section of East Kutai appear to be key pieces of evidence that support the Company’s case but as with all legal matters the outcome remains uncertain. In the event that the Company were to lose the document authenticity hearing, a scenario that it believes is highly unlikely, it believes it would not affect its claim for damages as it would have a very strong case based on a number of international legal doctrines including estoppel and acquiescence.