SMALL CAP MOVERS: The Stars Align for Phoenix Copper After Fully Subscribed Bond Issue

The Virgo moon is in harmony with Venus and Uranus this Friday, says a randomly selected online horoscope.

True or not, what is clear is that the stars are aligned Phoenix Copper Ltd after seeing an $80 million copper bond issuance this week fully underwritten by one investor.

The bonds will be redeemed in phases as construction begins on Phoenix’s Empire Open-Pit Mine in Idaho, US.

Copper is undoubtedly hot at the moment, having soared to a new record high this week – and was indeed the catalyst for BHP’s rejected £34bn jump to Anglo American.

Phoenix executive chairman Marcus Edward-Jones said: “Uncertainties around the Chinese and US economies meant that it took longer for electrification drivers and supply issues to reassert their influence on copper prices. It now appears that the penny has finally dropped.’

“Despite several delays and disappointments, we are hopeful that our stars have finally aligned,” he added.

Shares in Phoenix rose 33 percent on news of the bond subscription. They have since bounced back, but they managed to end the week a respectable 8 percent higher.

The shipbuilder from Belfast was less fortunate Harland & Wolffreportedly turning down a £200 million government funding round.

Chief executive John Wood denied the reports but the negative coverage continued until Friday, with The Telegraph reporting today that a £1.6 billion Ministry of Defense contract won in 2022 is at risk.

At the time, Wood called the contract “a truly defining moment.” It’s no wonder Harland & Wolff’s share price fell 26 percent last week.

In terms of the broader situation for small-cap stocks, the AIM All-Share Index was relatively flat all week, opening about 0.3 percent higher on Friday afternoon.

However, the junior market outperformed the FTSE 100, which fell 0.3 percent despite briefly hitting another record high on Wednesday.

Put it down to the fact that some of the biggest stocks, including Shell, BP, GSK and Unilever, have gone ex-dividend.

FireAngel Safety Technology Group was one of the biggest weekly gainers, with shares rising more than 50 percent on Friday alone and nearly 75 percent across all five days.

The rally came after the Secretary of State approved Intelligent Safety Electronics’ (ISE) £28m takeover bid for the group.

The bid required approval under the National Security and Investment Act 2021. In December, the bid timeline was suspended due to unfulfilled conditions, to date.

Orchard financing is also about to exit the junior market, but in less desirable circumstances.

Legal and regulatory requirements plus associated admission costs, low liquidity levels and the inability to attract institutions given the significant discount to net asset value were all reasons given for the potential delisting. The shares flopped 13 percent.

Zotefoams rose 22 percent after announcing “technical milestones” achieved with the ReZorce beverage carton product.

In a keynote presentation on Wednesday, CEO David Stirling said the progress is “indicative of the increasing momentum for this project.”

He said: ‘Retailers and brand owners understand the need for a sustainable alternative to LPB cartons and ReZorce meets that need: it is fully recyclable through mainstream collections, contains recycled material in accordance with the thresholds set out in the EU Packaging Directive and packaging waste. and has a lower ecological footprint.’

Cornish metals gave us the head scratcher of the week. Despite rising 17 percent on Friday, the stock fell by a third over the five-day period, without any discernible catalyst.

“The company is not aware of any reason for the selling pressure on the Cornish Metals share price this week,” interim CEO Ken Armstrong said.

In contrast to the decline in valuation, Armstrong highlighted a positive Preliminary Economic Assessment (PEA) for its South Crofty tin project in Cornwall.

The PEA estimates an after-tax net present value of $201 million and an internal rate of return of 29.8 percent, confirming the project’s viability and 14-year lifespan.

There appeared to be a broader repricing of small cap mining stocks Fixed Resources plc discount of 27 percent, Metal Exploration plc discount of 23 percent and Touchstone Exploration Inc discount of 18 percent.

Active Energy Group was also a laggard after confirming that it is in discussions with a ‘number of parties’ about the possible sale of its CoalSwitch technology which allows wood waste to be burned cleanly and effectively for energy supply.

In the update, AEG also said it is looking for ways to preserve cash and other possible divestitures. Shares fell 44 percent Friday afternoon.