Motif Bio plc (LON:MTFB) – BUY*: Appointment of strategic adviser
Market Cap: £47m; Current Price: 43.5p; Target Price: 114p
Appointment of Fulford Group to seek commercialisation agreements for iclaprim outside the US
Motif announced the appointment of The Fulford Group Ltd, a specialist strategic adviser in the healthcare sector, to assist Motif in developing and implementing strategies to commercialise the Company’s lead antibiotic iclaprim in territories outside of the US.
The Company expects that partnerships in territories outside of the US could provide the group with additional development capital in the form of upfront payments, milestone payments and ongoing royalty fees.
Motif intends to commercialise iclaprim directly in the US.
NORTHLAND CAPITAL PARTNERS VIEW: The appointment of Fulford supports Motif’s commercialisation strategy for iclaprim; Motif intends to commercialise iclaprim directly in the US, the largest pharmaceutical market in the World, while out-licensing other territories to strategic partners in view of generating additional development capital. The Company is on track to complete its pivotal Phase 3 trials for iclaprim in H2-17.
Keras Resources (LON:KRS) – CORP: HOT on new gold project
Market Cap: £11m; Current Price: 0.85p
Agreement on 215,000oz Au (1.7g/t) Lindsay’s Gold Project
Keras Resources has signed a binding profit share agreement with KalNorth Gold Mines for the Lindsay’s Gold Project, located in Western Australia.
Under the HOT Keras has been given the option to mine the Lindsay’s Project in return for a share of the net revenue. Once the option is exercised, a formal option agreement will be entered into before mining operations commence. Gross revenue will be allocated to State or Government royalties, operating expense, and non-mining fleet working capital expense with a 10% of operating cash flow payment to Keras as a management fee. The balance will be split on a 50:50 basis between Keras and KalNorth.
The Lindsay’s Project is located 65km NNE of Kalgoorlie and 60km NE of Keras’ Grants Patch Gold Tribute Project. The Project has a resource of 215,100oz Au at a grade of 1.7g/t Au, this includes the high-grade Parrot Feathers deposit (likely to be a underground operation) that contains 54,000oz Au at a grade of 4.2g/t Au. Parrot Feathers remains open down-dip around 200m below the resource estimate.
All permits are in place and Keras will prepare a mine development proposal within the next two months this will be reviewed by KalNorth and then submitted to the West Australia Mines Department for approval, with mining targeted for Q316 assuming a toll treatment agreement is secured.
NORTHLAND CAPITAL PARTNERS VIEW: The Lindsay’s Gold Project is expected to be the third Australian gold project that Keras Resources secures since changing its strategy in Nov-15 to move away from iron ore and focus on cash flow generation. Keras is focusing on smaller near-surface deposits located close to existing processing plants that it can rapidly begin extracting ore from, the lack of demand for these types of projects allows Keras to secure them at little-to-no upfront cost with all vendor/owner payments back-ended, reducing Keras cash flow risk. This strategy should allow Keras to grow its cash flow generation with minimal capital cost exposure and allowing it to benefit from the improved gold price and favourable USD to AUD exchange rate.