Evgen Pharma plc (LON:EVG) – BUY*: Interim results
Market Cap: £21.5m; Current Price: 29.5p; Target Price: 79p
Maiden interim results in line with our expectations
- Evgen announced interim results (unaudited) for the six months ended 30 September 2015 which were in line with our expectations. The group reported a Net Loss After Tax for the period of £1.2m (30 September 2014: net loss £1.1m). We expect FY-03/2016 Adjusted Loss After Tax of £3.5m—the group is expected to ramp up development costs in H2.
- The key events over the period and post period end were the group’s oversubscribed IPO on AIM in October 2015, raising £7m in gross proceeds, and an oversubscribed pre-IPO round in August 2015, raising £2m in gross proceeds. With the proceeds of these funding rounds, the company is fully funded to complete two Phase II studies of its lead treatment, SFX-01, and to support further preclinical work.
- Evgen reported that preparations for these trials and studies are proceeding to schedule and the company will also continue to collaborate with investigators in other disease areas
- During the period the company also reported positive data on SFX-01 as adjunct to hormonal therapy in patient-derived xenografts using cancer tissues from early and late stage breast cancer patients (data presented at the American Association of Cancer Research, April 2015).
- No change to our forecasts. We reiterate our 79p Target Price, BUY.
Northland Capital partners view: Evgen has had a transformative year-to-date. The group is now fully funded to achieve its product development goals. The group’s core technology allows for the production of a stable version of sulforaphane, a potential treatment for various conditions, including several cancers and neurological disorders. To date, despite considerable evidence supporting sulforaphane’s therapeutic properties, issues surrounding the drug’s stability, storage and delivery have hindered its development. Thanks to Evgen’s patented Sulforadex® technology platform, the company is well positioned to unlock the medical and commercial potential of this promising drug.
W Resources (LON:WRES) – BUY*: La Parrilla update
Market Cap: £23.6m; Current Price: 0.6p; Target Price: 1.1p
High-grade and near surface assay results
- RC and Diamond drilling within the La Parrilla fast track mining area have returned high-grade assay results including 40m at 0.32% WO3 from surface (IRC1-40), 56.20m at 0.21% WO3 from 47.5m (IP-21) and 19m at 0.2% WO3 from 21m (IRC1-33).
- Drilling at La Parrilla West area returned results including 28.4m at 0.25% WO3 from 43.2m (IP-25).
- No change to forecasts, BUY rating or 1.1p price target.
Northland Capital partners view: This latest drill programme for W Resources at La Parrilla has returned positive results that continue to demonstrate that the area that will form the Fast Track Mine is higher grade than the rest of the deposit. The results also continue to show that the mineralisation is open to the South East and at depth. Metallurgical and process design work is ongoing and the updated JORC mineral resource estimate is expected to be completed in Q116. Next year promises to be a definitive year for W Resources with maiden hard rock production and the generation of positive cash flow from La Parrilla. We maintain our BUY rating and 1.1p price target.
Sunrise Resources (LON:SRES) – SPECULATIVE BUY*: New project
Market Cap: £1.2m; Current Price: 0.175p
Stakes the Pozz Volcanic Ash Deposit located in Nevada
- Sunrise Resources has acquired a new industrial minerals project, the Pozz Volcanic Ash Deposit, located in Nevada. The project is a deposit of volcanic ash that Sunrise is evaluating as a source of pozzolan. Pozzolan is an environmentally friendly replacement for Portland cement in the manufacture of concrete. The project was staked by Sunrise at a minimal cost.
- The project covers a large area of volcanic ash, indicating significant tonnage. Initial sampling indicates that the deposit meets the chemical requirement of Class “N” Natural Pozzolan with high pozzolanic activity. The composition appears uniform over a wide area from initial sampling 2km apart.
- Unlike many other sources of natural pozzolan that need to be blasted, crushed and ground the Pozz Project should be free digging and not require crushing. This reduces the opex compared to other types of project increases the margin and also reduces the potential capex requirement. The project is also located in close proximity to roads and other infrastructure further reducing the potential capex.
- A bulk sample is underway.
Northland Capital partners view: Sunrise has followed up on its industrial minerals success at the County Line Deposit, with the staking of the Pozz Volcanic Ash Deposit, also located in Nevada. Pozzolan may well be something you have never heard of, but it is becoming an increasingly important environmentally friendly addition to cement manufacture. A Pozzolan is essentially a siliceous or siliceous and aluminous material that in finely divided form and mixed with lime and water at low temperature will form compounds with cementitous properties. The use of the material dates back to the Roman times but the significant reduction in the production of CO2 associated with its use compared to more traditional Portland Cement is driving the cement industry towards increased pozzolan consumption. An additional benefit of pozzolan is it strengthens and stabilises the cement improving its durability.
Premier African Minerals (LON:PREM) – SPECULATIVE BUY*: Loan update
Market Cap: £4.3m; Current Price: 0.55p
From Friday: Conversion of part of the CEO’s loans
- George Roach, CEO of Premier African Minerals, has elected to convert US$650,000 of his outstanding unsecured loans of US$1,024,643 into ordinary shares. As a result, 79,945,167 shares will be issued at 0.538p per share.
- Following the issue of these shares George Roach will hold 287,957,186 shares, representing 28.9% of the Company.
- Following the issue of these shares Premier African Minerals will have 996,574,863.
Northland Capital partners view: George Roach, the CEO of Premier African Minerals, has continually invested significant amounts of his own money into the Company and this latest conversion of his loan to the business is a further statement of his confidence in the business.