OMG! Tuesday 22 June: Summary of last week’s newsletter

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The OMG newsletter recommends at least 15 companies each month, using the writers’ experience of small caps to give you a winning edge. Last week they wrote about Castillo Copper and Falanx. Read about these Opportunities 4 Material Gains!

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Mid-week Tip Wednesday 15 th  May

Castillo Copper (LSE: CCZ) recently raised £6.4m at 2.3p (with a 4.4p warrant), the funds are to ramp-up its base metal exploration, which is focused on copper in Australia and Zambia. The copper price is near 10-year highs, driven by green stimulus and greater take-up of electric vehicles and there are ample for its exploration with test-drilling on multiple copper targets.

The key development is the Mt Oxide Prospect in Australia where there are three projects; Big-One Deposit, Arya and Sansa Projects and any one could be transformational. The logistics are in place and the work is set to start on a comprehensive drilling campaign primarily at the three prospects. At the ‘hopefully named’ Big One Deposit it’s within an historical mining lease where around 4,400t of supergene ore was mined, with an average achieved grade of ~3.5% Cu.  A 26 drill-hole campaign for 2,828m has been finalised and designed to extend known mineralisation proximal to the 1,200m strike event. Regulatory approval has been secured to drill at the Arya Project, which is potentially a large interpreted massive sulphide bedrock conductor found by Geoscience Australia in 2019Then at the Sansa Project an expanded programme is being formulated to fully drill-test all known shallow and deep bedrock conductors. There are certainly ample copper projects and with £7m available for development the news should flow.

 

Results Preview 21st June 

Last September £1.25m was raised by Falanx (Aim: FLX) at 1p supported by Amati Funds who now have 16%, Directors and  Stifel Nicolaus Europe, appointment as the new broker, who are part of the listed US listed  Investment Bank. The funds raised are forecasts to provide sufficient working capital for at least until September 21.  FLX is a global intelligence and cyber defence provider working with blue chip and government clients. he Interims to September 2020 reported revenue a moderate 7% lower at £2.46m of which £1.6m is reoccurring and a reduced loss of £0.63m.  Costs increased due to Covid although the management have made permanent salary sacrifices and have   been rewarded with  as their options  are for around 13% of the company at just under 2p, a mighty incentive. We anticipate a better second half performance and an improving pipeline.

 

Reviews from 13th June

DRV – 56p  On the Slip road

SGM – 201p – Recommended bid

DEST – 134.5p – Director share sale

XPD – 63.5p – Freight growth

ANX – 138.5p – Vehicle hires increase

W7L – 160.5p – UK sales jump

PHD – 74p – New bid, same price

FDBK – 1.03p – Increasing Bleepa interest

ITX -13.75p – Revenues increase by two-fifths

AVCT – 259p – EU registration for flow test

GHS – 1490p – Board truce

LUCE – 349p – EPE Special opportunities trims stake.

 

Finally

Purchasers Managers Index (PMIs) are the economic plot spoiler alerts but there are quite a number of these forward-looking indicators. In the US, on Wednesday Manufacturing is a relatively important PMI and  is likely to ease to 61.5 so marginally reducing inflation concerns.

 

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