SMALL CAP MOVERS: Gemfields bemused by share price surge

Gemfields was the top-performing small-cap performer this week, somewhat to the bafflement of the company’s management.

“The company notes the recent increase in its share price and confirms that there is no disclosable unpublished price-sensitive information relating to the company at the present time,” the company said in a stock market announcement on Friday.

Gemfields is closely monitoring the global COVID-19 situation and observed that its operations in Mozambique and Zambia remain materially uninterrupted by the pandemic. The company presently expects to hold three further gemstone auctions this year.

Gemfields is closely monitoring the global COVID-19 situation and observed that its operations in Mozambique and Zambia remain materially uninterrupted by the pandemic

“Notwithstanding the welcome increase in the company’s share price, Gemfields still trades at a significant discount to its net asset value,” the company noted.

The shares rose 46 per cent to 13.35p.

Sector peer Cora Gold rose 43 per cent after it announced a “world-class intersection” at its Sanankoro gold project in Southern Mali.

The company said there were 31.56 grams of gold per tonne from a 19-metre intersection revealed by drilling in Zone A of the project. Other noteworthy intersections from Zone A included 21 metres @ 5.75 grams per tonne gold (g/t Au); 7m @ 2.44 g/t Au; and 19m @ 2.07 g/t Au.

The results of the drilling programme to date have been extremely encouraging with good widths and high-grade results in generally shallow oxides ore, Cora said.

Another mining stock on investors’ shopping list this week was Orosur Mining, up 39 per cent at 19.5p.

The shares soared after the company signed a letter of intent with Canadian firm Meridian Mining on a proposed joint venture on Meridian’s Ariquemes tin project in Brazil.

Orosur has 90 days to complete due diligence and to finalise a joint venture proposal, after which its exclusivity period ends. Orosur said the broad terms of any joint venture have already been discussed between the parties.

Away from the mining sector, Ridgecrest, which sounds like it should be a mining company but which is an AIM-listed cash shell, jumped 31 per cent to 1.15p before trading of its shares was suspended, pending a reverse takeover by Airline Invest, which owns the Blue Air Romanian low-cost airline.

Assuming the deal goes ahead, the current owners of Airline Invest will end up with 95 per cent of Ridgecrest’s shares. It is proposed that the company’s name will change to Blue Air Group on completion of the deal.

As names of airlines go, Blue Air is particularly appropriate as it’s likely many airline passengers will be turning the air blue this summer…

A trading update from Yu Group was well-received by the market.

Shares in the independent supplier of gas, electricity and water to the UK corporate sector were up 16 per cent at 277.5p after it boasted of strong growth in bookings and revenue in the first half of the year.

Once the final numbers are totted up, Yu expect first-half revenue will have grown 42 per cent year-on-year to about £65million, resulting in the group posting an underlying profit (EBITDA) compared to a loss of £1.8million in the same period of 2020.

Recovery play Chamberlin was 13 per cent firmer at 10.75p after HSBC Bank announced on Thursday it has a 6.2 per cent stake in the company.

On Friday, the company said it would report a loss for the year to the end of May but is confident that with the bulk of its restructuring costs and non-cash write-downs behind it the current fiscal year will see it well-placed to make a strong recovery.

Evgen Pharma was the week’s biggest faller after disappointing results from the interim safety and futility assessment readout of the first 100 patients treated in the STAR COVID-19 trial.

Evgen said analyses did not meet the interim futility hurdle required to continue the study and that active treatment would not be likely to show an overall statistically significant improvement. Recruitment into the trial will therefore be halted.

Animalcare, the international animal health business, slid 16 per cent to 297p after it placed 13.9 million shares at 285p a pop.

The newly issued shares represent around 23 per cent of the company’s existing share capital.

Another stock marked down after the company issued shares was UK Oil & Gas (UKOG), which raised about £5million by placing shares at 0.18p, which was roughly a 22 per cent discount to the share price on the day before the placing was announced.

The funds raised will finance UKOG’s remaining share of the Turkey Basur-3 appraisal well’s drilling, completion and testing costs and planned 2D seismic data acquisition.

Shareholders will get the chance to buy shares at the same price (0.18p) through an open offer although as the shares are currently trading at around 0.175p – down 27 per cent this week – this is of marginal benefit.