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Beaufort Securities Breakfast Alert: Harvest Minerals Ltd., URU Metals Ltd, ValiRx Plc

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Today's edition features:

• Harvest Minerals (LON:HMI)

• URU Metals (LON:URU)

• ValiRx (LON:VAL)

 

Markets

Europe

The FTSE-100 finished yesterday's session 0.06% lower at 7,533.81 whilst the FTSE AIM All-Share index was up 0.48% at 1,024.71. In continental Europe, the CAC-40 finished 0.02% lower at 5,362.41 whilst the DAX was 0.17% higher at 12,970.68.

Wall Street

In New York last night, the Dow Jones closed 0.18% higher at 22,872.89, the S&P-500 also added 0.18% to reach 2,555.24, while the technology-focussed Nasdaq climbed 0.25% to end at 6,603.55.

Asia

In Asian markets this morning, the Nikkei was up 0.48% at 20,981.23 and the Hang Seng added 0.36% at 28,493.12.

Oil

In early trade today, WTI crude was 0.55% weaker at $51.02 per barrel and Brent was down 0.54% at $56.63 per barrel.

 

Headlines

Sky deal: James Murdoch faces shareholders at annual meeting

James Murdoch is poised to defend his position as Sky's (SKY.L) chairman at its annual shareholder meeting on Thursday. A trio of advisory firms have called on shareholders to rebel against Mr Murdoch, who is chief executive of 21st Century Fox and sits on its board. One investor, Royal London, which owns £44m in Sky shares, has criticised the dual position as "inappropriate", amid Fox's attempted bid to take over Sky. A Sky spokeswoman said Mr Murdoch was "uniquely well-placed" to be chairman. The spokeswoman cited his "deep knowledge of the global media industry", adding: "It would be inappropriate for us to discuss these matters before all of our shareholders have voted." Royal London, which has a 0.28% stake in Sky, resurfaced its concerns over the Fox-Sky deal ahead of the vote - saying the board's chairman should have no affiliation to either company. "Minority shareholders at Sky would be better served by a truly independent chairman," said Ashley Hamilton Claxton, the firm's corporate governance manager. "Independent oversight of the board is particularly important given Fox's ongoing bid to acquire Sky."

Source: BBC News

 

Company news

Harvest Minerals (LON:HMI, 11.38p) – Speculative Buy

Harvest this morning published an excellent update describing first sales plus an order book of over 20 consumers, distributors and cooperatives. All before the Arapua (KPfertil) product has received remineralizer certification - due before end of year. As Harvest's chairman Mr McMaster stated this is a "testament to the market's recognition of its capabilities". Other news is that a modular processing plant has been built which crushes and bags the product (no sizing or further processing required), and that Harvest raised £1.2m in an oversubscribed placing. We think the modular plant would have cost significantly less than $100k.

Our View: We didn't really expect sales before KPfertil received remineralizer certification. And although we had counted on the certification happening, we are now very confident it will. Once in place, the order book will translate into KPfertil sales and the Arapua business should grow steadily from there. Due to the low capex, low opex characteristics of the Arapua/KPfertil operation, we regard Harvest as a unique opportunity for U.K. mining investors. It provides exposure to a high margin quarrying type situation that would usually stay in private hands. We also note that in the placing the largest shareholder (a family office) increased its holding to 29.9%. We expect the shares to perform well from here and reiterate our Speculative Buy recommendation.

Beaufort Securities acts as a corporate broker to Harvest Minerals Limited

 

URU Metals (LON:URU, 1.28p) – Speculative Buy

URU Metals released the final drill hole results (Z018) from its three-hole drill programme on its Zebediela project located in the Limpopo, South Africa. Drill hole Z018 returned 160.6m grading 0.26% Ni. The purpose of the most recent drill programme was to test for potential extensions and continuity of nickel mineralisation within the mineral resource estimate. On the back of the results, the Company announced that it will conduct further drilling in early November to follow up on the PGE mineralisation identified in drill hole Z019, which returned 9m grading 1.97g/t (3PGE+AUu and 1.8m grading 1.6g/t (3PGE+Au).

Our View: The above drill results are encouraging and prove the continuity of nickel mineralisation at Zebediela. The upcoming drill programme will focus on the extension on the PGE mineralisation identified drill hole Z019. We look forward to results from the upcoming drill programme. In the meantime, we maintain a Speculative Buy recommendation on the stock.

Beaufort Securities acts as a corporate broker to URU Metals Limited

 

ValiRx (LON:VAL, 1.05p) – Speculative Buy

ValiRx, a life science company, which focuses on clinical stage cancer therapeutic development, taking proprietary & novel technology for precision medicines towards commercialisation and partnering, yesterday announced a new US patent allowance for method-of-treatment for the use of VAL401 in the treatment of prostate adenocarcinoma. VAL401 is developing by ValiSeek, the joint venture between ValiRx and Tangent Reprofiling Limited (60:40). Altogether, ValiSeeek currently have 4 granted US patent, 1 allowed patent (to be allocated shortly) and 1 granted patent each in Australia and New Zealand in the VAL401 portfolio, while international patents are pending across Europe, Asia, Australasia and in North and South America, providing coverage in all significant markets worldwide. VAL401 has recently completed dosing in Phase II clinical trials to treat patients with non-small cell lung cancer. ValiSeek's CEO, Dr Suzy Dilly, commented "This allowance will further strengthen ValiSeek's portfolio at an important time in our development pathway and will grow the confidence of existing and potential partners, as far as bringing this compound closer to the marketplace".

Our View: This is a positive news. ValiRx's JV company, ValiSeek, continues to broaden its patent portfolio for its VAL401. Recently, ValiSeek has established the preferred dosage of VAL401 to advance its clinical trials. The Phase II clinical trials for VAL401 for non-small cell lung cancer is currently in the process of final data collection, regulatory submissions for trial completion and ultimately for data analysis, which is expected to be available by the year end. Elsewhere, ValiRx's VAL201 is in the final stage of its Phase l/ll study for the treatment of hormone resistant prostate cancer, with patients receiving the highest dose prescribed by the trial protocol, which is on track to complete during 2017. VAL201 is targeting treatment of advanced symptoms without suppressing sexual and related functions or any of the many other debilitating side effects that alternative therapies present. Given the clinical progress being made to date, valuing a Group with two advanced Phase II cancer trials along with an exciting pre-clinical portfolio at just £1.5m is blatantly absurd, given that they collectively address multi-billion dollar markets and target significant unmet need. Comparisons with peer groups having similar clinical portfolios, or early stage partnership deals with pharma groups seeking entrance into such therapeutic areas (such as licensing agreement signed with Mystic Pharmaceuticals Limited in July), highlights a significant valuation gap. ValiRx shares recognise none of the value created over the past 24 months, nor the depth of its therapeutic pipeline. While it is understandable that the market remains concerned regarding the Group's ongoing funding needs, which are often satisfied through discounted equity placements, it should be remembered that management routinely delivers tangible development progress ahead of any such raise and, also to recognise that a Big Pharma development collaboration for either VAL401 or VAL201 would likely be concluded at a good multiple of the Group's current valuation. Beaufort reiterates its Speculative Buy rating on the shares, while maintaining its price target of 6.5p.

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