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Small cap movers: Junior miners enjoy ride on higher gold price

A look back at some of the more interesting stories from London's AIM market this week

Mosman Oil And Gas Ltd - Small cap movers: Junior miners enjoy ride on higher gold price

Gold juniors have rallied this year as punters on AIM have looked at ways of benefiting from a resurgent gold price.

The yellow metal is now trading at just below US$1,700 an ounce, up from the sub-US$1,450 level seen in March when markets were hit by the initial shock of the coronavirus crisis.

Bank of America’s bullish gold forecast sees prices soaring to as much as US$3,000 per ounce.

“There’s plenty to support the case that gold is going to go much higher, not least the simple truth that the world’s central banks are printing a phenomenal amount of money,” said Mining Capital's Alastair Ford.

While investors have turned to gold as a haven in times of volatility, miners have enjoyed a higher selling price and lower production costs thanks to the weak oil price, driving margins up.

But analysts say that gold majors have low levels of proven and probable reserves, because capital expenditure for exploration has slumped by 61% to US$9.4bn in seven years.

That’s why the smaller players are in demand. Australia-focused Greatland Gold PLC (LON:GGP), which is a mine developer rather than a digger, has seen its shares skyrocket 398% to 9p in the year to date. Ford reckons the company is top of its class, while research house Hannam & Partners believes the stock has further still to go and values it at 12.9p.

Ariana Resources PLC (LON:AAU), Scotgold Resources Limited (LON:SGZ), Galantas Gold Corp (LON:GAL) and Conroy Gold and Natural Resources (LON:CGNR) have also all been lifted by the rising tide of a buoyant gold price as have Caledonia Mining Corporation PLC (CMCL) and Chaarat Gold Holdings Ltd (LON:CGH).

Looking at the wider market, the AIM All-Share index dipped 0.6% to 809 over the last week, outperforming the FTSE 100 which fell 1.8%.

Among the week’s risers, Mosman Oil and Gas Limited (LON:MSMN) rocketed 83% higher to 0.1p after agreeing a farm-out deal with Westmarket Oil & Gas for the EP 155 permit application in Australia.

Peer Touchstone Exploration PLC (LON:TXP) rolled 22% higher to 37p after telling investors its focus on natural gas shields its trading from the volatility of oil prices.

In the pharma space, ImmuPharma PLC (LON:IMM) surged by 28% to 17p after a study by US-based Emory University Atlanta provided evidence that the drug maker’s Lupuzor lupus treatment could help to reduce or prevent the occurrence of inflammation seen in coronavirus patients.

Sector-mate Tiziana Life Sciences PLC (LON:TILS) climbed 23% higher to 80p after receiving encouraging data from the second phase of trials for its liver cancer treatment Milciclib. The biotech firm is also presenting work at the world’s leading cancer conference, the American Society of Clinical Oncology summit.

Elsewhere, construction services provider Mountfield Group PLC (LON:MOGP) shot up 28% to 1p after winning a £1.2mln gig to install raised access flooring at an office in Canary Wharf, London.

Sustainable fuels technology company Velocys PLC (LON:VLS) accelerated by 25% to 3p after its joint development partners British Airways and Shell injected £1mln in to the Altalto waste-to-fuels project.

Medical products firm Tissue Regenix PLC (LON:TRX) bobbed 21% higher to 1p after revealing a new generic product line developed in collaboration with an unnamed “top 10 global healthcare company”.

Fellow manufacturer AorTech International plc (LON:AOR) added 15% to 84p after revealing research and development activities had topped its board's expectations.

In the mining sector, Karelian Diamond Resources PLC (LON:KDR) advanced 21% to 2p after it was granted three strategic diamond exploration reservations in Finland.

But on the downside, fellow miner Tertiary Minerals PLC (LON:TYM) tumbled by 21% to 0.2p after analysis at the Pyramid Gold Project in the US came in lower than those from the historic drill hole, though the miner pointed ou that its target zone is gold-mineralised.

Oil and gas explorer Alba Mineral Resources PLC (LON:ALBA) shares also tripped up by 21% to 0.05p after the company issued 142.5mln shares at 0.04p each as part of a conversion option being exercised by Bergen Global Opportunity Fund.

Learning centres operator Malvern International PLC (LON:MLVN) shed 18% to 0.4p after non-executive director Ramasamy Jayapal resigned.

Finally, industrial chains maker Renold PLC (LON:RNO) fell 13% to 6p after appointing Jim Haughey as its new finance director, whose start date has still not been finalised yet.

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