Premier African Minerals (LON:PREM) – SPECULATIVE BUY*: RHA update
Market Cap: £9.7m; Current Price: 1.4p
Increased throughput and other developments to offset delays in medium term
- RHA processing plant throughput 25% ahead of steady state expectations and plant optimisation for recoveries is ongoing and expected to be completed once certain material circulating pumps have been upgraded.
- Second shipment dispatched and revenues are expected from mid-September.
- Premier African Minerals expects to increase its resource tonnage and is also investigating the potential to accelerate the underground development.
- The Darwin loan note conversion trigger has been reduced to US$130/mtu (current price US$190/mtu). Darwin issued with $50,000 of new warrants at an average price based on Prem’s share price prior to the issue of the warrant. George Roach has also agreed to increase the option price (29/04/15) to US$2.4m from US$2m.
NORTHLAND CAPITAL PARTNERS VIEW: A positive update from Premier African Minerals with the increased plant throughput, potential increase to the size of the mineral resource estimate and potential for the fast tracking of the underground mine, all likely to add value in the near term and according to the Company will offset the effects of production delays over the medium term.
Connemara Mining Company (LON:CON) – CORP: H115 results
Market Cap: £0.9m; Current Price: 1.6p
LBT of €88,000
- LBT during H115 decreased to €88,000 from €140,000 in H114.
- Net debt reduced to €190,000 compared to €296,000 in H114.
- The Company is currently undertaking a programme of seven trenches over one of the targets generated by the recent soil sampling programme. If the results are positive the Company would undertake a small drill programme (funding in place for this).
NORTHLAND CAPITAL PARTNERS VIEW: Connemara Mining Company’s interim results reflect its focus on low cost exploration at the Inishowen Licences, located in Ireland. Importantly the Company is fully funded for the current trenching programme at Inishowen but also an initial drilling programme at the licences should the results prove to be positive.
Arian Silver Corporation (LON:AGQ) – CORP: Company update
Market Cap: £2.6m; Current Price: 7.75p
From yesterday: Financing discussions continue
- Arian Silver Corporation remains in financing discussions.
- The Company currently has cash of US$745,000 but accounts receivable and trade and payables totalling US$618,000, giving the Company net working capital of US$223,000. This amount excludes accrued income and expenditure, and the receivables of US$2,174,000 from Mexican Sales tax, of which the Company expects to receive US$338,000 in Q415.
NORTHLAND CAPITAL PARTNERS VIEW: An issue with Arian Silver Corporation’s tertiary crusher at its San José Silver Mine has put the Company in a difficult position as commissioning is well behind schedule and the cash flow expected from operations has not been generated. The Company is now seeking additional finance in a low silver price environment to allow it to continue the commissioning process.
K3 Technology Group (LON:KBT): Prelims and contract win
Market Cap: £88m; Current Price: 277p
Good FY performance; first win in Germany
Revenue +16% to £83.4m with recurring revenue +13% to £39.8m. Software licence sales +7% to £13.8m and service revenue +25% to £24.8m reflecting contracts secured over the past 18 months. Major new orders at £21.2m (FY14: £25.3m) and pipeline of £62.0m (FY14: £62.2m). Annualised subscription income now at £8.0m, with more than 450 customers.
Adj. operating profit +12% to £8.1m reflecting increased investment, negative currency impact and a weaker Dutch market, now addressed. Adj. PBT +9% to £7.2m and adj. EPS +4% to 19.4p and dividend +20% to 1.50p. Net debt reduced 11% to £12.1m and expected to reduce materially.
Inter IKEA contract extended to 2020, good performance from the channel and positive outlook.
Contract win for its ‘ax l is fashion’ product with TriStyle Mode GmbH, a European mail order fashion retailer. The contract was secured via its channel partner in Germany and is K3’s first order through a global SI. The value of the sale is not being disclosed but the contract is the largest through the channel and first win in Germany.
NORTHLAND CAPITAL PARTNERS VIEW: Good FY performance with growth at the top and bottom line and encouraging dynamics with growth coming from the channel and hosting, initial orders for ‘ax l is’ and higher proportion of K3 IP sales. Today’s contract announcement represents an important expansion with entry into Germany and K3’s largest channel win to date. The debt on the balance is becoming more manageable but may dissuade some. Rating of 11.0x FY16 consensus EPS (12.4x adjusting for debt) remains at the lower end of the sector in spite of reasonable 12-month share price performance.