Hybridan Small Cap Feast

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Hybridan Small Cap Feast

A round up of the day’s news brought to you by the team at small-cap broker and advisor Hybridan.

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ADM Energy* 3.65p £5.5m (ADME.L)

The  natural resources investing company, has entered into a non-binding collaboration agreement (CA) with Eunisell Limited, the Nigerian owned oil and gas production solutions company. 

Under the terms of the CA, subject to the completion of certain due diligence, ADM and Eunisell (will explore collaboration opportunities to carry out development of Barracuda Field in OML 141 and associated work-related activity in Nigeria.  It is the intention of both parties, together with the risk sharing consortium in respect of Barracuda Field, that a formal agreement will be entered into in advance of any work commencing. The CA may be terminated by mutual consent.

 Eunisell has decades of experience in engineering, production, operations and enhanced production techniques within Nigeria and the Parties intend to work together to use their combined experience to accelerate production of oil and gas assets, initially concentrating initiating production at the Barracuda field in which ADM recently invested.  Activities under the intended scope of work may include early production facility supply, procurement, construction and commissioning of production facilities, extended well testing and laboratory services.  Following discussions, Eunisell may consider providing vendor financing to achieve the scope of work to be agreed, subject to terms and conditions to be determined at the point of an award of contract.

Elixirr International 470p £214m (ELIX.L)

The established, global award-winning challenger consultancy, announced the acquisition of the entire issued share capital of procurement and transformation firm, The Retearn Group Limited , for a maximum total consideration payable of approximately £7.0m plus an additional cash payment based on working capital at completion.  Retearn is a UK-based procurement, transformation and insights consultancy with 35 full-time employees and a broad specialist associate network. In the year ended 30 June 2020, Retearn recorded revenue of £5.65m and profit before tax of £0.92m.

The Acquisition brings specialists in self-funded transformation, and allows Elixirr to meet demand from clients to find savings to fund strategic initiatives. Demand for cost management and transformation is expected to increase in the next year. In a recent survey by Deloitte, 66% of executives reported that they are likely to pursue cost reduction strategies over the next 12 months, and a further 75% of Fortune 500 companies believe that COVID-19 will accelerate their technological transformation (Fortune Magazine Survey).

Elixirr’s second acquisition since IPO in July 2020 and fully in line with our ‘House of Brands’ strategy. · Immediately earnings enhancing.

Dev Clever 37.5p £215.1m (DEV.L)

The developer of mobile and immersive experiences has entered into a comprehensive agreement with Veative Labs .

Acquiring the entire issued share capital of Veative Labs Private Limited a wholly owned Indian   subsidiary of Veative, subject among other things, to the publication of a prospectus. The consideration for the acquisition of VLPL is to be settled through the issuance of 150m new ordinary shares in the Company. 

Acquiring the immersive education materials (including STEM content) that will be utilised during the near-term roll-out of the Company’s existing partnership agreement with VLPL and the National Independent Schools Alliance (NISA and NISA IP).  NISA is India’s largest governing body for budget private educational institutions, with this partnership entered into on 21 December 2020;

Exclusive initial one year IP licensing agreement for additional immersive educational materials that are  bespoke to the Indian market; and

· Call Option for a period of one year over (i) the Indian IP and (ii)  Veative’s global distributor agreements (subject to third party consents).

President Energy 2.375p £48.2m (PPC.L)

The energy company with a diverse portfolio of production and exploration assets focused primarily in South America, provides an operational update with regard to the newly drilled well LB-1002 at the Las Bases field, Rio Negro Province, Argentina:

 · New well LB-1002 drilled, logged and cased on time and budget

· Both electric and mud logs identify and confirm pre-drill expectations of gas pay in the Centenario formation with good permeability and porosity

· The rig is now moving off location to the next well, EV-1001 at the Estancia Vieja field, Rio Negro which will take 5/6 days, with spudding currently projected in approximately 10 days

· The new well LB-1002 will now be completed with a coiled tubing unit and production slated to commence by the end of April.

Touchstone Exploration 107.5p £225.1m (TXP.L)

Completion of flowback testing of the Cascadura Deep-1 well, confirming a liquids rich natural gas discovery. Touchstone has an 80 percent operating working interest in the well, which is located on the Ortoire block onshore Trinidad and Tobago.

· Touchstone perforated the top 199 feet of the 449 feet identified as potential pay in sheet four of the overthrust Herrera formation on April 8, 2021.

· The average flowback rate during the extended 24-hour test period was approximately 4,262 boe/d , including 22.9 MMcf/ d of natural gas and 449 bbls/d of NGLs.

· Peak flowback rate of approximately 4,567 boe/d was observed, comprised of 24.5 MMcf/d   of natural gas and 477   bbls/d of NGLs.

· Approximately 48.8 MMcf of natural gas ( 8,138 boe) and 1,081 barrels of NGLs were produced during the testing period.

· Field analysis indicated liquids rich gas with no hydrogen sulfide and no produced water.

· The well is currently shut-in for a minimum four-week pressure build-up test.

Thor Mining 0.825p  £13.4m (THR.L)

Field work has commenced at it 100% owned Ragged Range Project located in the Pilbara, Western Australia.

The field program is designed to follow up previously reported success from stream sediment samples collected across the tenements, which defined a highly anomalous 13km long gold target zone, with gold values up to 2.2g/t Au (20PST 51 FA25) and 1886ppb Au (20PST 54 Au AR25) and identified three magnetic targets.

Next Steps: RC drilling program scheduled for May/June 2021 targeting gold at Sterling Central and Nickel gossan.

AfriTin Mining 6.6p £57.7m (ATM.L)

The African tin mining company with its flagship asset, the Uis Tin Mine  in Namibia, updated on its metallurgical test work programme for potential by-products to its current tin concentrate product.

▪ The Uis Tin Mine JORC(2012)-compliant mineral resource estimate includes ancillary metals with an inventory of 6,091 tonnes of contained tantalum (Ta) and 450,265 tonnes of contained lithium oxide ( Li 2 O ), grading at 85ppm Ta and 0.63% Li 2 O respectively.

▪ Major Li 2 O intersections include 86.51m grading at 1.22% Li 2 O (drill hole V1V2017) and 109.32m with an average grade of 0.97% (drill hole V1V2010).

▪ The Company is advancing a metallurgical test work programme to investigate the by-product potential of the ancillary metals. Test work for a Ta concentrate is at an advanced stage; Li 2 O concentrate test work is progressing to a second stage.

Fast Forward Innovations  10p  £21.3m (FFWD.L)

The company focusing on making investments in fast growing and industry leading businesses, has appointed Mr. Alfredo Pascual as Vice President of Investment Analysis effective 1 April 2021.

 In this role, Alfredo’s focus will be on sourcing and evaluating investment opportunities in the burgeoning European medical cannabis industry as well as supporting the growth of FastForward’s portfolio companies in the sector.

 Having worked in the cannabis space since the end of 2016, Alfredo is a well-known name in the sector across global markets.  Alfredo most recently worked as International Analyst at Marijuana Business Daily (MJBizDaily), the US-based business news and information resource, where he focussed on how cannabis markets and investments were evolving internationally.

C4X 45p £102m (C4XD.L)

The pioneering Drug Discovery company, today announces that its subsidiary, C4X Discovery Limited, has signed an exclusive worldwide licensing agreement with Sanofi (NASD: SNY, PAR: SAN), worth up to EUR414m, for C4XD’s oral pre-clinical IL-17A inhibitor programme.  Under the terms of the agreement, C4XD will receive an upfront payment of EUR7m and could receive up to a further EUR407m in potential development, regulatory and commercialisation milestones, of which EUR11m is in pre-clinical milestones, in addition to single digit royalties.

Independent Oil & Gas 20.85p £102m (IOG.L)

The UK gas company targeting high returns via an infrastructure-led hub strategy announced the spudding of the Elgood development well, 48/22c-H1. Elgood is the first of five planned development wells in IOG’s Phase 1 project and is expected to take approximately three months to drill and complete, after which the rig will move on to Blythe in early Q3.

 The Noble Hans Deul jack-up rig mobilised from the Cromarty Firth on 1 April and reached the Elgood field location early on 4 April. After preparation and jacking-up the Elgood well spudded at 1730 hrs on 9 April.

What’s cooking in the IPO kitchen?

Semper Fortis Esports* recently announced its intention to IPO onto the Access Segment of the Aquis Stock Exchange Growth Market.  Semper is a multi-operational Esports organisation focusing on gaming technology solutions, brand enhancement and high growth team infrastructures.  The company plans to raise £2.5m to develop their three core areas of establishing an esports team, forming partnerships with brands for sponsorship and B2B consultancy services.  The Board are highly experienced in sports and corporate deal making (Keith Harris, former Chairman of The Football League), technology and electronic gaming (Nolan Bushnell, founder of the pioneering company, Atari), esports and game tech (Kevin Soltani and Jassem Osseiran).  Target Admission Date of 26 April 2021

Darktrace plc. Announcement of Intention to Publish a Registration Document and Potential IPO on the main market of the London Stock Exchange.  Darktrace was founded in 2013 with a mission to fundamentally transform the ability of organisations to defend their most critical assets in the face of rising cyber threats. Darktrace is a world-leading provider of AI for the enterprise, with the first at-scale in-the-enterprise deployment of AI in cyber security  Timing TBA

musicMagpie   is a leader in re-commerce in the UK and US in the circular economy of consumer technology (including smartphones, tablets, consoles and personal computers), books and disc media (including CDs, DVDs and video games).  Expected 28 April.. Offer details TBA

Wickes to demerge from Travis Perkins and list on the Main MarketExpected 28 April.

Advance Energy to complete an RTO on AIM indirectly acquiring up to 50% of Carnarvon Petroleum Timor  which holds a 100 per cent. working interest and is the contractor under the Buffalo PSC, offshore Timor-Leste. Carnarvon Petroleum Timor is a subsidiary of ASX listed company, Carnarvon Petroleum Limited. The net proceeds of the Placing of approximately £20.01m (approximately US$27.51mm) will be used to fund the Acquisition.  Due 19 April.

NFT Investments plc is an investment company that specialises in non-fungible tokens (NFT). Has applied for admission to the Access segment of the AQSE Growth Market. No funds being raised. Due 16 April.

Thor Explorations (TSXV:THX) seeking a secondary listing on AIM. The Company is targeting Admission during Q2 2021.   Segun Lawson, President & CEO, stated: “Thor Explorations has advanced significantly, in both project development and capitalisation since the acquisition of Segilola in 2016. This year, the Company is well positioned to achieve two major milestones with the commencement of gold production at Segilola in Nigeria and a maiden resource at Douta in Senegal, as well as continuing to progress our highly prospective Nigerian exploration portfolio on the Ilesha Schist belt.”

MAST Energy Developments (MED) is to IPO on the Standard List on 14th April 2021 under the ticker MAST.  The company has raised £5m giving a market capitalisation on listing of c. £23m.  MED is currently a 100% subsidiary company of AIM quoted, Kibo Energy*.   MED was established to acquire and develop a portfolio of flexible power plants in the UK and become a multi-asset operator in the rapidly growing Reserve Power market.

PensionBee has confirmed its intention to float on the High Growth Segment  of the Main Market of LSE.  The online pension provider had approximately 130,000 Active Customers and £1.5bn of assets under administration, in each case as at 28 February 2021.  The Offer will comprise new Shares raising gross proceeds of approximately £55m and existing Shares to be sold by certain existing small minority  shareholders of up to £5m. None of the founders, directors or members of senior management of PensionBee are selling any existing Shares. Expected in April.  

Imperial X (AQSE:IMPP) to join the Main Market (standard). It is also proposed that on Admission to the Official List, the Company will change its name to Cloudbreak Discovery Plc.  With effect from Admission, Imperial X will hold equity positions and royalties in a variety of projects in the natural resources sector across multiple jurisdictions, primarily in the Americas and Africa. The Company is proposing to raise up to £1.5m by way of placing of new Ordinary Shares to support further prospect acquisitions. Current Mkt cap £4.7m Expected April 2021.

Proposed move to AIM from the main market (standard)  by Emmerson (EML.L)  to provide Emmerson with access to a market and environment which is more suited, in the Board’s view, to the Company’s current size and strategy ahead of pivotal period for the Company with the commencement of mine construction at the Khemisset Potash Project expected by end of 2021. Follows recent award of Mining Licence granting Emmerson exclusive right to develop and mine the potash deposit and £5.5m raise to fund ongoing project development work.  

NextEnergy Renewables  to launch an IPO on the Main Market. NREN is a differentiated renewables investment Company that aims to capture the most attractive private renewables and energy transition infrastructure investment opportunities globally.  Targeting a £300m raise.   NREN is targeting total returns of 9-11 per cent. per annum (net of all fees and expenses but including the Target Dividend and capital appreciation) . The Company’s target dividend yield for the first full financial year to 31 December 2022 is 5.5 pence. Due Early March 2021.

Digital 9 Infrastructure launch an initial public offering  on the Specialist Fund Segment of the Main Market of the London Stock Exchange, by way of an initial placing and offer for subscription for a target issue £400m. Digital 9 Infrastructure plc is a newly established, externally managed investment trust. The Company will invest in a range of digital infrastructure assets which deliver a reliable, functioning internet. The IPO Prospectus is expected to be  published in March 2021.

Fix Price announces its intention to float on the Main Market of the London Stock Exchange.  Fix Price is one of the leading variety value retailers globally and the largest in Russia, with more than 4,200 stores. Fix Price has revenues of RUB 190.1bn, RUB 142.9bn and RUB 108.7bn for 2020, 2019 and 2018, respectively. Adjusted EBITDA for the same years was RUB 36.8bn, RUB 27.2bn and RUB 14.2bn, respectively. The Offer would consist of an offering of GDRs by certain existing shareholders of the Company.

Great Point Entertainment Income Trust PLC announced its prospectus has been approved by the FCA.  Great Point Entertainment Income Trust PLC is a newly established, externally managed closed-ended investment company. The Company will provide project finance to content makers and commissioners in the global television and film production industry via senior loans secured against pre-sold intellectual property (IP) rights. GPEIT’s investment objective is to provide Shareholders with dividend income and modest capital growth through exposure to media content finance.

*A corporate client of Hybridan LLP

This document has been prepared by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment objectives, financial situation or needs of any specific entity and is not a personal recommendation to anyone. Recipients should make their own investment decisions based upon their own financial objectives and financial resources and, if any doubt, should seek advice from an investment advisor. The information contained in this document is based on materials and sources that are believed to be reliable; however, they have not been independently verified and are not guaranteed as being accurate. This document is not intended to be a complete statement or summary of any securities, markets, reports or developments referred to herein. No representation or warranty, either express or implied, is made or accepted by Hybridan LLP, its members, directors, officers, employees, agents or associated undertakings in relation to the accuracy, completeness or reliability of the information in this document nor should it be relied upon as such. Any and all opinions expressed are current opinions as of the date appearing on this document only. Any and all opinions expressed are subject to change without notice and Hybridan LLP is under no obligation to update the information contained herein. To the fullest extent permitted by law, none of Hybridan LLP, its members, directors, officers, employees, agents or associated undertakings shall have any liability whatsoever for any direct or indirect or consequential loss or damage (including lost profits) arising in any way from use of all or any part of the information in this document. This document is sent to you as market commentary only. As market commentary this document does not constitute any of (i) investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments for the purposes of the UK retained version of section B of annex I to Directive 2014/65/EU (“MIFID II Directive”); or (ii) investment research as defined in the UK retained version of article 36(1) of Commission Delegated Regulation 2017/565/EU made pursuant to the MIFID II Directive; or (iii) non-independent research (as such term is defined in the Financial Conduct Authority’s Conduct of Business Sourcebook).

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