Stellar Diamonds was by far and away the top riser in London this week after the junior miner told investor investors it is in “advanced negotiations” over a possible takeover offer from Newfield Resources.
AIM-listed Stellar said the possible bid, as it currently stands, would see each shareholder receive approximately 0.76 of a Newfield share for each Stellar share held.
Given Aussie-quoted Newfield’s stock closed at A$0.29 on Wednesday, the offer would represent a whopping of 452 per cent premium to Stellar’s closing price of 2.3p the day before the bid.
Stella Diamonds is in “advanced negotiations” with Newfield Resources over take-over bid
The offer is conditional on Newfield securing underwriting for a A$30 million rights issue, the funds from which would be used to advance Stellar’s Tongo-Tonguma project in Sierra Leone into production.
Stellar wheeled out the usual “there can be no certainty of any offer” line, but investors still poured in. Shares surged 150 per cent to 5.75p across the week.
It can sometimes be tricky, to put it politely, for foreign companies operating in Russia to get a mining licence for their projects in the country.
There is a whole host of governmental bodies involved in the process and it can be laborious and time-consuming maze to navigate. Eurasia Mining is faring far better than most, though.
The junior miner – which, importantly, has experience of successfully gaining a mining permit in Putin’s playground – is well on its way to securing another, this time for its Montechundra project on the Kola peninsula which is estimated to be host to 2 million ounces of palladium equivalent.
Eurasia revealed on Friday that things are coming along even quicker than expected, with Russia’s mining body, Rosnedra, having approved a draft of the permit. That has now been forwarded on to the ministry of defence and Federal Security Service to get their go-aheads.
The market cheered the quick progress, with shares up more than a quarter to 0.37p.
Given all of the column inches devoted to data hacks recently – Yahoo, Equifax and the WannaCry bug that brought down the NHS – you’d think cyber security companies would be coining it.
Defenx provides protection for smartphones, desktop PCs and laptops
Not at Defenx. The company – which has offices in London, Switzerland and Rome – plummeted back in October when it said revenues for the year to December 31 would be “materially below” those generated in prior year and that it would record a “significant” full-year loss.
That warning was due to delays to a few high value contracts, while the delivery of product updates to address certain performance issues also took longer than expected.
On top of that, several customers owe it money and Defenx said on Monday that it has struggled to recoup what it is owed over the past two months or so, despite going down the legal route on some occasions.
Should this cash collection remain weak and new orders fail to materialise, the firm won’t be able to draw down any of the funds from its various debt facilities and thus “may be required to seek additional funding” in the next quarter.
That sparked a bit of a sell-off, with shares plunging 23 per cent to 18.1p, although a slight rally on Friday helped to pare the weekly losses to 7 per cent with the stock changing hands for 22p.
Defenx was more reflective of the overall junior market this week, as the AIM All Share dipped 0.4%, or 4.7 points, to 1,068.6.
That was still significantly better than the blue chips though, with the FTSE 100 slumping 2.5%, or 197.4 points, to 7,468.5 as a result of the strengthening pound and rising bond yields.
One of those holding the junior market back was Image Scan Holdings which saw more than a third wiped from its value.
The x-ray screening systems supplier told investors only in December that it had started its new year with a “record order book”, although it did note that delivery dates for some of those had yet to be confirmed.
Image Scan Holdings is a supplier of x-ray screening systems
Well, one of those deliveries still hasn’t been confirmed by the customer so Image Scan is now negotiating terms for the cancellation of the order.
Unfortunately for the company and its shareholders, that deal was worth around £1 million – an awful lot of money for a company now valued at just over £5 million.
As a result, bosses said its results for the current year would fall “materially below” current market expectations.
While bosses reckon they’ll still be able to sell the portable X-ray products that made up the order, they’re not convinced they can do this in the current year. The shares plunged 38 per cent to 4.4p.
January is rarely a good month for alcohol companies, what with Dry Jan and empty wallets after Christmas.
Bargain Booze owner Conviviality reported its interim results at the end of the month, and margin pressure had the share price going down swifter than a can of Special Brew.
Bargain Booze owner Conviviality
Results were mixed with the wholesaler and off-licence stores operator reporting a 9.2 per cent year-on-year increase in revenue to £836.3 million and a 1.7 per cent increase to £23.2 million in adjusted underlying earnings (EBITDA).
But the gross margin ebbed to 12.5 per cent from 12.8 per cent due to an increase in sales to large national account customers in the period, leading to a 1.6 per cent fall in pre-tax profits which came in at £12.3 million.
The interim dividend was given a slight uplift to 4.5p and full-year guidance was maintained, but the stock still sunk 13.5 per cent across the week to 308.5p.