Wednesday, December 6th 2023

Cashed up small Small Cap bargains. Time to go shopping?

keep up to date with the latest news


Absolute carnage. Retail Clients hemorrhaging money, margin calls, inflation, higher interest rates, sterling crashes, political chaos…


…so, obviously it must be time to BUY ?


Here we try and give you a few ideas and look at a dozen Companies that have recently raised funds and currently trade around or below the placing price. 


Companies covered include :



Investors don’t need reminding of what a terrible year this has been for equities.

But to briefly recap: JP Morgan Chase reckons personal portfolios in the US fell 44pc between January and October. The S&P 500, which flew so high after the initial shock of the pandemic has lost more than 20pc so far this year, with the growth oriented NASDAQ falling by a third. UK markets have fared somewhat better due to their greater weighting towards less glamorous value stocks, such as commodities, banks, retail and utilities: LSE prices average 8.6 times next year’s earnings compared to the US’s 16.3 times.

But even so, Interactive Investor, which runs one of the UK’s largest platforms for self- directed investors, says its clients have lost an average of 12pc since the start of the year. Many investors have given up on picking individual stocks and piled into index funds: six of the top 10 most-bought funds in September on Interactive Investor were passive options from Vanguard.

Others have withdrawn their money from the markets altogether, turning to cash. But inflation makes even that a risky strategy. With prices rising by more than 10pc a year and the best fixed-rate savings accounts delivering less than 5pc, cash will halve in value within the next 15 years.

The plain evidence of stock market history is that those investors who can afford to do so should keep their money in equities. Since modern markets emerged in the 1850s equities have generated a real annual return of around 6pc, well beyond any other asset class. As veteran fund manager Richard Oldfield puts it in his book Simple But Not Easy: ‘Rather like reputations, which are built up over many years and can be lost in a trice, markets seem to stagger determinedly though haphazardly up an infinite staircase and to throw themselves precipitously down a flight or two from time to time’.

Oldfield insists that adverse market conditions offer good stock pickers with convictions – ‘of the noncriminal sort’ – opportunities to construct robust portfolios able to deliver considerably better returns than the index. Following legendary investors Benjamin Graham and Warren Buffet, Oldfield argues that value investing has a simple robust logic that ensures it always comes good – in the end. The expected return of an asset rises as its price falls, making a share price that has fallen ‘more interesting than it was before it fell’. What has come down, tends to go up. The mean reasserts itself. The logic is simple but when the going is tough its hard to embrace. Being human, investors are naturally enthusiastic about things that are doing well and gloomier about those which are doing badly. It takes discipline to pass over high-flying stocks for those that have been overlooked, even when research indicates that those neglected stocks are due for renewal. But the truth is that ‘if the company involved is essentially sound, with scope for improvement, but an unduly low valuation, then in time the value is likely to be realised.’ On average value managers have, over the long term, outperformed growth managers.

As TMS noted in an article this summer, choppy market conditions offer opportunities for smaller shares to shine due to the ’small company effect’, the capacity of the best small caps to sustain growth even in times of economic stagnation. Clearly, all businesses, large and small, tend to do better during the good times. But because of their dominant market shares the growth of larger companies is more closely correlated with economic trends. Good small companies, however, can continue to grow by taking market share during downturns. Their value is more closely correlated to the quality of their operations: they need only increase their market share at the margins to secure decent growth. They have greater opportunity to innovate, and to more quickly adjust to changing market conditions.

Our article quoted an extended nautical metaphor used by Gervais Williams in his small cap manifesto The Future is Small, that’s worth revisiting. ‘In comparison to the ocean-going vessels of the large corporation,’ Williams writes, ‘smaller companies can be likened to small boats – some are fishing craft, others are lifeboats or racing yachts. When conditions are challenging, most will struggle to some degree. Larger companies are assumed to carry lesser risk, given the advantage of their major brands and sizeable market positions; they may suffer a reduction in sales, but the genuinely small could find certain niches completely blown away … In the shallow seas of a low-growth world, there are bound to be some smaller vessels that are perfectly placed to clean up, whereas the larger drafts of most of the bigger businesses constrict their opportunity.’

Below, we pick out a few small cap stocks that, along with the rest of the market, have taken a bit of a battering this year, but that may now be in value territory:

Capital Metals


Capital Metals (AIM:CMET) continues to move closer to turning a highly prospective mineral sands project in Sri Lanka into reality, publishing data confirming the resource’s potential, and securing the all important licences crucial for securing a breakthrough off-take agreement.

CMET is focused on the development of the Eastern Minerals Project, an 84km2 strip of shoreline on Sri Lanka’s eastern seaboard with a JORC Resource of 17.2Mt, and an average grade of 17.6pc Total Heavy Minerals (THM) from surface down to a depth of three metres, making it one of the world’s highest-grade deposits: less than 10pc of the licence area has so far been explored. The company is in discussion with Sri Lankan regulators regarding the use of the nearby Oluvil port for separation and shipping operations.

CMET achieved a major breakthrough last year with the approval of an Environmental Impact Assessment (EIA), granted on condition of CMET’s commitment to an environmentally sensitive mining procedure that will minimise its operational footprint, integrating land rehabilitation into the mining process. The shallow depth of the Project’s mineral sands deposits will allow them to be mined using relatively unobtrusive surface mining methods, and topsoil, subsoil and clay will be removed, stockpiled, and relayered after mining.

There have been other promising developments this summer. A Development Study and Preliminary Economic Assessment undertaken by an independent analyst indicated ‘exceptional economics resulting in a high margin operation, enabling a short payback period’. The report’s base case scenario projected total revenues of $645m, operating cashflows of$391m and net profit of $262m over an initial 10-year project life. The report assumed a conservative 3.5 year, four-stage development with production expansion funded through operations, and 3.7 year payback period. This staged development would allow the project to pay for itself after reaching an initial funding threshold of $37.3m, much less than if the full development capex of $81m was to be required from the outset. The summer also saw the granting of the Project’s first two Industrial Mining Licences, paving the way for the conclusion of discussions with offtakers, debt providers and other strategic funding parties. Analysts are developing a Metallurgical Process Test Work Study to enable the confirmation and refining of process flowsheets defined in the IHC Development Study, and which will provide updated product specifications to assist with ongoing discussions with off-takers.

CMET says Sri Lanka’s ongoing political and economic turmoil has not affected the company’s current programme or its future plans. The company believes Sri Lanka’s financial problems highlight the importance to the country of securing international investment in initiatives such as the Eastern Minerals Project, commenting that it ‘expects that recent political changes should enable change to occur more rapidly with increased international cooperation and an overriding requirement to encourage foreign investment and job creation in the country.’ The company’s cash balance at 31 March 2022 was $1.776m.

CMET’s stock is down 60pc over past year to 4.6p at time of writing, taking the company’s market cap to £8.56m. That is well below the most recent placing price (February) of 7.5p.

Contango Holdings


Contango Holdings (LON:CGO) is making progress towards unlocking the potential of its coking coal project in Zimbabwe with the award earlier this year of its first offtake agreement.

CGO acquired a 70pc interest two years ago in the Lubu Coal Project in the Karroo Mid Zambezi coal basin in Hwange, a well established Zimbabwean mining district. A NI43-101 report projects some 1.25 billion tonnes, with 702Mt Indicated and 510Mt Inferred. The Project’s high grade 28CV metallurgical coal – which can be ‘cooked’ to produce the coke used by steel and ferro-alloy makers – will be sold to producers across southern Africa.

Production commenced in March in pursuit of an initial stabilised mining rate of 5,000 tonnes per month. Production through Q2 this year will be stockpiled pending installation of a wash plant, ensuring sufficient feedstock to ensure continuous supply. CGO is targeting margins of at least $300 per tonne in ongoing discussions with potential off-takers. Earlier this summer CGO achieved a significant breakthrough by securing its first offtake agreement, with AtoZ Investments, a specialist coal trading company based in South Africa. AtoZ will buy 10,000 tonnes of Lubu’s washed coking coal each month, paying Zimbabwe’s prevailing market price of $120 per tonne. CGO says it will be able to deliver on its first sales – scheduled for Q4 2022 – at a rate of 10,000 tonnes of washed coal per month. It intends to expand its processing facilities to 300,000 tonnes per annum in H1 2023, funded through internal cash flow.

Shortly after taking its stake in Lubu CGO acquired the Garalo Gold Project in Mali, a $1m purchase consolidated by the £0.75m acquisition of the adjoining Ntiela licence, on Garalo’s western boundary. A NI43-101 report published early last year identified several new exploratory zones in addition to the resource’s headline G1 and G3 targets, allowing the resource to be upgraded to the 1.8 to 2Moz range. The report, which indicated gold structures similar to the nearby 2.8Moz Kalana deposit operated by Endeavour Mining. Exploration has clarified the prospect’s geological structures and potential for resource expansion, with a view to establishing a large standalone gold mine with multiple open pit operations across both permit areas.

CGO is producing coke for a world that is still developing the technology necessary to move away from coal-driven steel production. Established steel making processes are going to take some time to green, mills continuing to rely on carbon-intensive blast furnaces loaded with mineral, lime and coke. The defined southern African markets CGO is targeting, and Zimbabwe’s regulated market price, shelter it somewhat from the the inherent volatility of the coking coal sector, which ebbs and flows with the health of the global economy.

CGO is currently funded for its programmes to bring Lubu into production and undertake drilling at Garalo-Ntiela. The company raised around £2m through a Convertible Loan and the exercise of warrants last year, and a further £2.5m by way of a November placing. CGO’s most recent interims, to the end of November 2021, stated cash of £2,419,266.

CGO’s shares are down 17pc over the past 12 months to 6.10p at the time of writing, taking its market cap to £19.18m. That is just above the company’s last placing price, 6p, last November.

Empire Metals


Exploration and development company Empire Metals (AIM:EEE) has continued to consolidate its presence in Western Australia this year, working to open up what it hopes will prove a rich seam of new gold and copper prospects. 

EEE has shifted focus over the past two years, turning from the Caucasus to building a portfolio in Western Australia’s prolific mining regions. The company acquired a 75pc interest in the Eclipse Gold Project in 2020, a mine located 55km north-east of Kalgoorlie that has recorded historic production of 954 tonnes at 24.6g/t gold, and has has an agreement with Maher Mining Contractors to explore, develop and mine within a granted area on Maher’s Gindalbie Gold Project, located near the historic gold mining town of Gindalbie, adjacent to Eclipse. Gindalbie was an active gold mining centre around the turn of the last century: total recorded production to the end of 1913 was 44,622 tonnes of ore for 40,643oz gold (at an average grade of 28.33g/t gold). 

Earlier this year EEE was able to report encouraging intercepts following 1,676 metres of drilling at Gindalbie and positive assay results from drilling at Eclipse indicating that gold mineralisation associated with targeted shear zones extends 300 metres further from the previously reported extent of mineralisation along the Eclipse shear. Five of the six holes intercepted mineralisation within the shear, and results indicated that the Eclipse lode remains open at depth.

EEE further extended its Australian footprint this year by acquiring a 70pc interest in three prospective copper-gold projects from Century Minerals. In April EEE raised £1.7m to support exploration across the three projects, and ongoing drilling at Eclipse and Gindalbie. Exploration at the new prospect’s Pitfield Project got underway in June, geophysical surveys confirming strong magnetic stratigraphy and alteration within the project area. The survey indicates ‘a significant structure’ along the western boundary of a magnetic anomaly that closely aligns with a surface copper feature stretching over seven kilometres, offering ‘potential for the presence of magnetite which could be associated with a regional scale alteration event.’ EEE notes that ‘Pitfield is located immediately adjacent to the historic Baxters copper mine at Arrino which produced 106 tonnes of copper at a grade between 20-30pc.’EEE has continued reverse circulation drilling at the combined Eclipse-Gindalbie Gold Project, where four of 13 holes reported significant intercepts with the best of the drill holes intersecting three new mineralised zones.

EEE’s most recent interims to 30 June 2022 reported a net cash balance of £2.4m. The company’s share price is currently 0.8p, down 52pc over past 12 months, taking its market cap to £3.4m.



EQTEC (AIM:EQT) is making a novel contribution to the energy transition by generating green power through ingenious transformation of waste.

The company designs facilities able to process dozens of waste feedstocks to generate synthetic natural gas – ‘syngas’ – that powers the production of thermal energy, electrical power, hydrogen, SNG, chemicals and liquid fuels. EQT’s clients include manufacturers with captive waste with the potential to be transformed into electrical power; utility companies selling power to businesses and households; and municipal authorities providing electricity for their communities.

EQT designs and operates Market Development Centres (MDCs) – working plants that produce and serves as showcases for its technology in commercial environments – in the UK and across Europe. This year the company progressed work on two new MDCs: one in Italy, due to begin operations this autumn; the other in France, which will process feedstock including wood, contaminated wood and Refuse Derived Fuel (RDF), and expected to be the country’s largest ever gasification project for combined heat and power. Final funding is being sought to complete the commissioning of another in Croatia.

EQT is advancing three UK projects: a multi-technology plant for Municipal Solid Waste (MSW)-to-biogas and power at Deeside, Flintshire; a multi-technology plant for MSW-to-biogas and hydrogen at Southport, Merseyside; and RDF-to-combined heat and power and hydrogen at Billingham, Teesside. 

EQT’s revenues have increased with the roll out of new plants, increasing five-fold in H1 2022, €2.98m, over H1 2021, €0.48m, and an increase in gross profit from €0.07 to €0.24m. With revenue dependent on funding sufficient to meet project milestones, the company anticipates its total revenues for 2022 to be in the range of €10 to 12m. EQT has yet to move into profit, forecasts an EBITDA loss in the range of €2 to 3m (2021: €3.8m).

EQT raised £3.75m in July, at a placing price of 0.5p per share (following the securing of a loan facility for up to £10m in March.) Despite operational progress, the company’s shares are well down in 2022, falling 75pc over the past 12 month, taking its market cap to £28.05m.

Greatland Gold


Greatland Gold (AIM:GGP) continues to work towards bringing the highly prospective Havieron project in Western Australia to production, boosted by a funding arrangement that promises to secure the funds the company needs to meet its share of the cost of developing a working mine.

The Havieron discovery, close to Newcrest’s Telfer mine and Rio Tinto’s Winu discovery, propelled GGP’s share price into the stratosphere back in 2020, quadrupling in value to break through 40p and push the company’s market capitalisation over £1bn. Soon after the discovery GGP entered into a joint venture partnership with Newcrest, the terms of which commit the Australian giant to shoulder $50m of the cost of exploring Havieron in return for the right to earn up to a 70pc interest. Subject to a positive Feasibility Study, due to be published later this year, and a subsequent decision to mine, Havieron’s ore will be toll processed at the nearby Telfer mine.

The most recent Mineral Resource defined a total 85Mt at 2.0g/t Au and 0.26pc Cu for a total of 5.5Moz of Au and 223kt of Cu. Drilling is underway to test regional geophysical targets outside of the main Havieron system. GGP said the ‘schedule for first ore continues to be reviewed and will be updated with the release of the Feasibility Study, which remains on track for completion during the December 2022 quarter.’ A Stage 1 Pre-Feasibility Study (PFS) on the South-East Crescent of the Havieron deposit released last October, indicated – in GGP’s words – ‘the tip of the Havieron iceberg with a fraction of the initial resource supporting the total capex of the project’, and signposted ‘a globally unique opportunity for bringing a low risk, low capex tier-one gold-copper mine into production’. The company has now secured debt and equity agreements that promise to bring in AUD$340m to enable the company to fully fund its 30pc share of the cost of bringing Havieron into production.

GGP has become synonymous with Havieron over the past few years, but the company has other interests in Australia and Tasmania, most notably the Juri Joint Venture, also with Newcrest, and, again, in the Paterson region. The Venture consists of two exploration licences, Paterson Range East, and Blackhills. GGP currently has a 49pc stake, but Newcrest has the right to earn up to 75pc interest by spending up to AUD$20m in total as part of a two-stage farm-in over five years. Drilling last year identified several promising targets for this year’s follow up programme, which got underway in June, focused on the drilling of three high-priority targets. 

GGP has several fully-owned projects, notably the Scallywag and Rudall and Canning projects, both prospective for copper and gold, and both adjacent to Havieron. Drilling at Scallywag has intercepted 2.6m at 0.19g/t Au from 35.4m and 3m at 0.19g/t Au from 430m at one hole, and anomalous gold and pathfinders at three further holes. A maiden exploration drill programme is underway at Rudall and Canning.

The shine has come off GGP’s share price over the past year, down around 53pc to 8.24p at the time of writing, taking the company’s market cap to £412m. Its current price is just above the 8.2p used for a $25m August fundraise.

Ince Group


The Ince Group (AIM:INCE), a legal and professional services business with offices across Europe, Asia and the Middle East, seeks to take advantage of the trend to increasing consolidation in the UK legal services market. The company, which has integrated 14 firms, offers the services of more than 700 lawyers providing accounting, financial services, consulting and pensions advice to clients ranging from the world’s oldest and biggest businesses to ultra-high net worth individuals.

Since listing on AIM five years ago INCE’s revenues have increased four-fold as the company has grown. In 2018, then known as Gordon Dadds, it became the UK’s largest listed law firm by revenue after acquiring Ince & Co for £43m. But INCE’s ambitions have been checked somewhat over the past year, facing financial challenges aggravated by the pandemic, and reputational damage when regulators objected to an attempt to take over the company that was serving as its Nominated Advisor.

INCE’s trading update for the end of the financial year on 31 March 2022 stated overall revenue of £97m for 2022, below that of the previous year, which the company attributed to the severe impact of the pandemic on its Hong Kong and China offices, the resurgence of Covid in the UK last winter, the impact of the Ukraine conflict on shipping, one of the company’s key markets, and a cyber attack at the end of FY22, when the company was mid-way through IT system migrations in Asia.

An update this autumn outlined progress under a strategy developed by a new management team to dispose of non-aligned businesses within the group, and de-leverage its balance sheet. Fresh cash collection procedures were making inroads into a £11.8m outstanding UK debtor book in the UK, and the trade and assets of CW Energy, a specialist tax consultancy business within the group, had been disposed back to the original vendors, saving nearly £3m. INCE said it continued to experience ‘difficult trading conditions’ in the period to August 2022, but that revenues had continued to recover to near 2021 levels. Travel restrictions that had hit its Asian business were beginning to ease. The company had cash of approximately £3.5m but net debt of approximately £15m. INCE said ‘third party debt funders remain supportive of the Group and the new management’s strategy for cost reductions, rationalisations and a more sector and specialism focussed strategic approach to future growth.’ The following month INCE reported it had ‘taken action to reduce its annual run rate cost base in total by at least £7.2m.’ A July placing had brought in £9.1m.

Last October INCE was embarrassed when the LSE blocked the company’s £10m bid to take over Arden Partners, the stockbrokers serving as its NOMAD. Regulators require that consultants providing day-to-day monitoring must demonstrate total independence from their clients. The matter was resolved earlier this year, the acquisition going ahead on the condition that Arden will no longer provide such services, INCE stating that ‘Arden’s reputation is primarily built around its ability to raise money for its clients and provide other broking and advisory services, and therefore the loss of its Nominated Adviser licence should not materially impact Arden’s brand and ability to engage new clients’.

INCE’s difficult year has seen its shares fall 90pc to 5.36p, just above its July placing price of 5p, taking the company’s market cap to £14.37m.

Keras Resources


Keras Resources (AIM:KRS) is ramping up its presence in the US organic fertiliser market, seeking to take advantage of a global trend towards indigenous supply of commodities.

Forecasts suggest the North American fertiliser industry is due to grow by some 8pc per year in volume terms, and 14pc on a value basis. KRS produces a high-grade, premium phosphate product under the PhosAgri brand that supports soil health, regenerative agriculture from the company’s fully owned Diamond Creek phosphate mine in Utah. A dispute with former co-operator Falcon Isle had caused issues, including a temporary shutdown of the plant, but KRS now has full control of mine to market activities, promoting a product that, with its high calcium content, it says has the highest available phosphate in the US.

KRS achieved a 40pc increase in sales for August 2022 to 700 tons (t) against a 500t forecast, and repeat forward orders, allowing the company to set out sales guidance of between 7,500t and 8,000t for the period from September 2022 to June 2023 at an all-in sustaining cost (AISC) margin of between $80 and $100 per ton. After two phases of summer mining the company extended this year’s mining season to meet demand. A total of 3,000t of phosphate ore (500t more than targeted) was mined, crushed and will now be hauled to the processing facility before the end of the mining season, which formally ends this month. The company is ‘now fully stocked for the coming months with ore available to meet committed demand as well as plenty of material to process bespoke orders.’ A drilling programme to further define the ore reserve at Diamond Creek will begin next spring. KRS is now targeting 25,000 tons per annum of phosphate product as medium-term annual sales objective.

KRS also has an interest in the Nayéga manganese deposit in the Republic of Togo, an element used as a steel, iron and aluminium alloy. The Republic’s government has published a decree granting the right for large-scale mining of the resource, the terms and associated protocols for an Exploitation Permit have been agreed, and KRS’s Togo subsidiary has been converted from a private to a public company in compliance with the country’s Mining Convention. KRS continues to work to secure the Permit required for operations to begin.

KRS raised £1.95m through an April placing to support continued drilling and production: the company recorded a loss of £0.467m for the six months to 30 June 2022, a loss partly attributable to the legal costs incurred in its dispute with its former co-operator. KRS says that although ‘our reserves are low we do not believe that we will need to come back to the market for funding for our current development plan.’ The company’s share price is currently 4.5p, down 54pc, taking its market cap to £3.59m.

KEFI Gold and Copper


KEFI Gold and Copper (AIM:KEFI) continues to push forward projects in the frontier jurisdictions of Ethiopia and Saudi Arabia. 

The company has a 70pc stake in the Tulu Kapi Gold Project, which would be Ethiopia’s first industrial scale mine development for more than 30 years. The Project has moved forward with the gradual modernisation of the country’s regulatory system, overseen by a government seeking to build a modern minerals sector in the midst of continued political turmoil.

KEFI acknowledges that ‘It is obvious to anyone that follows us closely that the Company has to work hard to traverse various frontier market risks including still-being-developed regulatory regimes and security challenges.’ Civil war broke out in Ethiopia two years ago, damaging the economic progress of country that, in the 15 years to 2019, driven by investment in agriculture, industry and infrastructure, had grown on average by 7pc per year, one of the fastest rates in the world. Although still relatively poor, with a nominal per capita gross domestic product of roughly $950 in 2020, years of growth had put Ethiopia’s 114 million population on the cusp of lower middle-income status. Fighting broke out again in August after a fragile ceasefire, but as KEFI noted last month it seems the rebel leadership has requested another truce. The company said the Tulu Kapi project is ‘currently clearing the last regulatory processes required ahead of the expected signing of binding project financing documentation at the end of October 2022, enabling project launch to proceed and release of funds as standard conditions precedent are met.’

KEFI has a 30pc interest in a cluster of Saudi Arabian ventures, notably the Hawiah Copper-Gold and Jibal Qutman Gold projects. Hawiah is ranked as one of the top three base metals projects in Saudi, with a JORC resource of 24.9Mt at 0.9pc copper, 0.85pc zinc, 0.62g/t gold and 9.81g/t silver. Jibal Qutman, where the initially contemplated development project has been enlarged, is now believed to be capable of supporting a 500,000oz production plan for extraction over 10 years based on a conventional open pit process. The projects, which are at Preliminary Feasibility Study (PFS) and Definitive Feasibility Study (DFS) stage respectively, have progressed in accordance with the Saudi Government’s initiatives to welcome international expertise and fast-track the development of its mining sector.

KEFI has reported ‘considerable progress’ for the first half of 2022, on track to begin construction at Tulu Kapi – where the final proposed project finance plan has now been circulated for formal sign off – and deliver the PFS for Hawiah in Q4 2022. Jibal Qutman’s DFS, mining licence and financing work is being fast-tracked ahead of a planned launch in 2023. The successful launch of Tulu Kapi and Jibal Qutman should see first gold pour for both at the end of 2024. KEFI estimates combined production of around 400,000oz gold or gold-equivalent per annum by 2026, and offers an indicative NPV of its three main assets of £306m on the basis of consensus long-term price forecasts.

KEFI supported its ongoing work through an £8m fundraise in April, at a placing price of 0.8p per share. That was rather higher than the company’s current price of 0.59p, down 42pc over the past year, taking its market cap to £23.38m.

Mobile Streams


Mobile Streams (AIM:MOS), which has recorded rapid revenue growth this year by entering the fast evolving market for sports related non-fungible tokens – NFTs – seems well positioned to benefit from the advent of World Cup fever, thanks to a deal to become the exclusive supplier of the blockchain-generated tokens on behalf of the Mexican national football team.

A mobile content and data intelligence company that has been listed since 2006, MOS has undergone something of a reinvention over the past two or three years, wholeheartedly embracing the metaverse, blockchain, NFTs and other cutting edge digital marketing technologies. MOS continues to distribute games and other content tailored to mobile devices to an international client base, with a particularly strong presence in Central and South America. But the company began the process of shifting its focus in late 2019, launching Streams, a data insight and intelligence platform based on the KrunchData online platform, now owned by MOS, which uses AI to help customers assess how their content is being consumed.

But the MOS’s recent momentum has been achieved through its commitment to the rapidly evolving market for sports related NFTs, unique digital tokens verified by blockchain technologies. NFTs have been embraced by the sporting world more quickly and comprehensively than any other sector. Earlier this year MOS secured a deal to become the exclusive global producer and provider of NFTs for top Mexican football club Pumas, through which the company is targeting revenues of around $14.5m over the course of a five year contract. The first NFT ‘drop’ for Pumas sold out in minutes, earning more than $50,000: the NFT royalty framework ensures MOS will retain 5pc of any resales. 

But the company went on to top that last month by becoming the exclusive producer and provider of collectable trading card NFTs for the Mexican National football team. Under the terms of the three year contract, which mirror those of the Pumas deal, MOS will earn revenue of 5 to 10pc on the sale of each NFT, and royalties every time they are traded thereafter. The tokens will be sold primarily through a marketplace MOS is creating for the Mexican national team accessible through team digital touch points, such as the Mexican Football Federation website and social media accounts. The deal comes in the lead up to the World Cup, which is expected to be watched by some five billion people. Mexico, backed by a population of 130 million, and 60 million other supporters in the US and across the world, is currently the ninth ranked team in the world.

MOS has been been able to post a series of positive financial updates this year on the back of rapid revenue growth generated by its focus on NFTs, which has reducing the company’s dependence on big South American economies such as Argentina. Revenue for the year to 30 June 2022 reached £1.1m, an increase of approximately 180pc over the previous year’s figure of £0.395m. The half year to June generated revenue of £0.81m, a 270pc increase on the figure for the previous year. MOS said: ‘The Company expects revenue to continue to grow strongly throughout calendar year 2022 and into 2023, with particularly fast revenue growth from its NFT business which, based on internal forecasts, has the potential to exceed all other revenue streams by the end of the financial year 2023.’

The market, however, remains to be convinced: MOS’s share price is currently 0.19p, down 70pc over the year, and only just above its most recent placing price of 0.18p, taking its market cap to £7.76m.

Panther Metals


Panther Metals plc (LON:PALM), focused on gold, copper, nickel and Platinum Group Metals (PGM) prospects across a cluster of Canadian and Australian assets, has forged ahead with another round of drilling programmes this summer.

PALM went public with two prospects in Western Australia, the Marrakai and Annaburroo Gold Projects, covering a total area of 160km2. Both are situated within the Palaeoproterozoic Pine Creek Orogen, which hosts more than 250 gold occurrences and several operating gold mines, including the Rustlers Roost deposit containing 51Mt at 1.0g/t Au (1.6 Moz). PALM went on to acquire the Merolia Gold Project, its first post-discovery opportunity in the region, a 145km2 tenement package close to the prolific Granny Smith, Sunrise Dam and Wallaby gold mines, which together have produced nearly 20Moz gold. Merolia is also prospective for nickel-cobalt sulphide mineralisation: a JORC Exploration Target sets a tonnage range of 30-50Mt at 0.6 to 0.8pc nickel and 400 to 600ppm cobalt. Last year PALM listed the company’s Australian operations as Panther Metals Ltd – to be referred to for everyday purposes as ‘Panther Australia’ – on Australia’s ASX, a move designed to delineate more precisely PALM’s respective operations in Australia and Canada. PALM continues to hold a 36.6pc in the subsidiary.

On joining the LSE PALM also had a significant Canadian asset, the Big Bear Gold Project in Ontario, subsequently extended through the acquisition of the Dotted Lake Property, a cluster of contiguous claims close to Barrick Gold’s prolific Hemlo mine, which has produced more than 22 Moz of gold over the past 30 years. Analysis published last November indicated several gold anomalies, including a particularly promising 1.3 km long shear-related gold feature, helping PALM sell Big Bear to Fulcrum Metals for £0.2m (PALM will retain a significant interest through 20pc ownership of Fulcrum’s share capital and a 2pc net smelter return royalty.)

Last year the company significantly expanded its Canadian portfolio by taking a near exclusive exploration holding over the Obonga Project, also in the Thunder Bay region, prospective for gold, copper, lead, zinc, silver, and PGM deposits. Phase 1 drilling early this year at Obonga confirmed the discovery of a volcanogenic massive sulphide (VMS) mineral system at the Project’s Wishbone Prospect. PALM has also gained access to another Ontario greenstone belt through an agreement to buy the Shear Gold/Manitou Lakes Project encompassing the West Limb and Glass Reef gold properties on the Eagle-Manitou Lakes Greenstone Belt – an immediately adjacent project owned by Manitou Gold was sold for CAN$7m.

Back on the other side of the globe, Panther Australia defined a JORC Exploration Target for nickel and cobalt at the Coglia Nickel/Cobalt Project on the southernmost area of the Merolia project tenements, with a tonnage range of 30 to 50Mt at 0.6 to 0.8pc nickel and 400 to 600ppm cobalt. Final assay results for the Project reported ‘the highest-grade intercepts of Nickel and Cobalt in the entire Coglia drill programme’, including 1m at 3.97pc nickel and 1m at 7,900ppm cobalt. Attention has now turned to defining a JORC 2012 compliant maiden Mineral Resource Estimate.

In July the company reported ‘very high grade gold drill intercepts and visible gold in reverse circulation drilling chips’ at shallow depths at the Burtville East Gold Project and Eight Foot Well prospect in Western Australia, paving the way for a follow-up programme, including both diamond core and reverse circulation drilling, which has returned further high-grade gold drilling intercepts. A technical update for Dotted Lake published in September detailed the Project’s potential for ultramafic intrusive hosted nickel mineralisation. And there have been positive findings from a gold focused soil geochemical sampling programme conducted at the Shear Gold/Manitou Lakes Project. PALM is now looking ahead to exploration diamond drilling at the Obonga Project, supported by a £1.148m August placing.

PALM’s most recent interim report, for the six months to 30 June 2022, stated total cash reserves of £71,517 (31 December 2021: £100,586), and a net asset value of £2,631,492. The company recorded a loss for the period of £65,793, down from £97,599 for the equivalent period for 2021. 

Despite PALM’s a busy summer the company’s share price has drifted down to just below 5p at the time of writing, a decline of 66pc over the past 12 months, taking the company’s market cap to £4.28m. That is lower than the most recent placing price of 5.5p, set for an August fundraise.

Pineapple Power Corporation


Pineapple Power Corporation (LON:PNPL) listed two years ago as a SPAC, raising gross proceeds of £1.3m with ‘the intention to acquire renewable or clean energy technology companies and to finance, develop and promote those environmentally sound projects internationally’.

A SPAC is a ‘Special Purpose Acquisition Company’ that goes public with nothing but cash and the aspiration to acquire one or more private companies. Such ‘cash shells’ offer opportunities for companies seeking capital to secure investment without having to go through a lengthy and costly IPO process. Importantly, PNPL has sought to clarify the implications of revised FCA rules requiring companies to list with a minimum market capitalisation of £30m, noting that the revisions, introduced last December, do ‘not apply to PNPL in relation to its first reverse takeover, provided that it makes a complete submission to the FCA for an eligibility review for listing and a prospectus review relating to that reverse takeover which does not lapse and is not withdrawn, prior to 4pm on 1 December 2023.’ PNPL therefore remains ‘one of a very limited number of special purpose vehicles able to conduct future reverse takeover transactions on the LSE with valuations of less than £30m’, and following completion of a reverse takeover would be eligible to re-list with a market capitalisation of £0.7m or more provided that it does so within the specified timeframe.

PNPL’s prospects ultimately depend on the clean energy sector’s continued capacity to generate promising new ventures of the right size, price and ambition. The year’s events serve as a visceral reminder of the urgency to develop clean energy infrastructures that do not depend on Siberian oil and gas, which supplies two-thirds of Europe’s energy. 

There has been much excitable commentary on the prospects both for clean energy and SPACs over the past few months. But as the dust settles, it would seem clear that the drive towards an environmentally sustainable energy infrastructure remains the global economy’s most significant mega trend – underlined by passage of the Biden administration’s green friendly Inflation Reduction Act – and that special acquisitions vehicles are maturing as a useful framework for opening promising new companies to investors keen for access to innovation.

PNPL is still well positioned at the intersection of those two vectors. The company has work to do to find a new prospect, but with money in the bank, and a window open till December 2023, it has time on its side. Pineapple Power Corporation may be one for small cap energy investors to watch this year, particularly since its price is down 65pc over the past 12 months to 1.64p, taking its market cap to £1.17m.

Poolbeg Pharma


Poolbeg Pharma (AIM:POLB) continues to make progress this year towards defining three new candidate biotechnologies, and an array of other initiatives.

POLB is another sciences small cap to emerge from the Raglan Capital stable run by health care entrepreneur Cathal Friel, following in the footsteps of Open Orphan (AIM:ORPH) and Amryt Pharma (AIM:AMYT). The company aspires ‘to become a “one-stop shop” for big pharma to find Phase II ready products for development and commercialisation’. ORPH made waves at the height of the pandemic when it worked with the Government’s vaccines task force to organise the first Covid ‘human trial challenge’, in which volunteers were inoculated against the virus under controlled conditions. POLB aims to commercialise ORPH’s extensive clinical data repository, developed through 20 years of challenge trials testing how the body’s immune system can be boosted to overcome influenza, RSV, HRV, and now SARS-CoV-2. POLB is organised according to an innovative ‘capital light clinical model’ designed to position the company to bring products to market quickly and cheaply where they can potentially be monetised through licensing to the pharmaceutical majors.

POLB 001, the company’s flagship candidate technology, is a ‘Phase II-ready p38 MAP Kinase inhibitor’ offering an effective treatment for inflammation suffered by patients with severe influenza. Unlike current treatments POLB 001 directly addresses hyperinflammatory episodes. If licensed POLB 001 would also offer potential for applications beyond influenza, including certain covid cases. POLB 001 has passed Phase I trials confirming its safety for human use, and, as of May, patents for both the European and US markets have been secured. Significant progress has been made towards Phase II trials, after which POLB would be able to begin the licensing process, which the company estimates might take some 18 months.

POLB achieved a significant breakthrough a few weeks later when the company received ethics and competent authority approval to begin trials assessing POLB 001’s effectiveness in dampening the robust immune response to LPS which acts as a surrogate for the hyperinflammatory response associated with severe influenza and other diseases. Results are expected ‘in Q4 2022’ at which point the company ‘intends to rapidly monetise by out-licensing/partnering with pharma and biotech companies for further development of POLB 001.’ 

While progressing POLB 001 the company has advanced POLB 002, a novel, ‘first-in-class’ RNA-based immunotherapy for respiratory virus infections spun out from research at the University of Warwick. POLB has secured an exclusive licence to the dual antiviral prophylactic and therapeutic candidate, which is at a late-pre-clinical development stage, and which targets pan-respiratory virus infections, which could include influenza, respiratory syncytial virus, covid and others. Respiratory virus infections are a notorious worldwide killer, contributing to more than three million deaths each year. POLB has also signed an Option Agreement to with University College Dublin to licence POLB 003: MelioVac, a vaccine for melioidosis, an infectious disease commonly found in the soil and surface groundwater of tropical and subtropical regions. Also known as Whitmore’s disease, melioidosis is widespread in south-east Asia, northern Australia and India, and, through climate change, is spreading to South America.

POLB’s share price since going public has reflected the pattern of the wider biotech sector. The company’s stock performed strongly through much of 2021, rising from its IPO price to touch 13p this time last year, but is down 35pc to 6.71p over the past 12 months, taking the company’s market cap to £33.55m.