While there may not be great breadth in terms of the number of small caps “blowing the doors off”, the companies that are doing so are certainly breath-taking. An apt phrase, “ the stronger the trend, the rougher the ride” certainly applies to the recent rally in Remote Monitored Systems (RMS), with the shares sporting a 148% rise to start the week, on top of a recovery from the mid 0.3p’s in just a few weeks. The explanation of the ongoing rebound has been Remote Monitored’s move into anti-viral masks, something which at the end of the day may prove to be of as much use as a COVID-19 tests – which have so inspired small cap investors since the pandemic began.
Stock market traders are familiar with the “read across” concept. However, with Braveheart (BRH), the 27% rise in the share price was perfectly understandable, given the chunky stake the company has in Remote Monitored Systems, and the prospects for its Pataytec COVID-19 test. Given that the two companies between them have a couple of the best trader cat nip offerings of the moment, it is not surprising at the surges in respective share prices. Arguably, the Braveheart share price has not fully factored in the RMS gain, given how fast and how high it has been.
Perhaps the most esoteric “read across” of the day was bottom fishing in recurring revenue play Dukemount Capital (DKE), with the result being a 7% rise. Traders were suggesting that it could be the next low ball valuation play, in the same way that Remote Monitored Systems (RMS) and Braveheart (BRH) were just a few weeks ago. In terms of actual news, last week Dukemount said it was “entering into talks with regards to securing further long dated income opportunities,” with investors taking the view that these could be more signficant than the projects Dukemount has been involved with thus far.
Shares of Ferro Alloy Resources (FAR) managed to stretch recent gains by another 3%, as the vanadium mining and processing company, focused on Southern Kazakhstan, announce that it has made its first commercial production and sale of calcium molybdate. The speculative reason for excitement here has been the spread between the present market cap at £37m and the prospect of off-take agreements regarding the potential production of 14 tonnes of calcium molybdic oxide per month, and a £2bn NPV figure.
While the rally in Vela (VELA) was rather more modest than that of Remote Monitored Systems, at 36%, it was arguably the stock which most captured the imagination of traders. This is because it had the magic combination of being not only one of the latest COVID-19 plays, but one of the cheapest in terms of market cap. On this basis of course, logic is that the potential upside should all go well, is that for Vela it would stretch from the present £13m to the tens of millions or more, of existing plays. All of this comes after last week’s announcement that Vela had raised £1.25m to make a £2.35m investment in a late-stage Phase II therapeutic project to develop a potential coronavirus treatment for diabetics.
A couple of TR1s from separate stakebuilders so far this month was the rather obvious reason for the 26% rise in Canadian / Australian minerals explorer, Panther Metals (PALM). The stock has already found backing from key Fintwit cognoscenti, given its modest £6.4m market cap. Other plus points, and the background behind the latest move higher for the shares was the company announcing earlier this month that it had commissioned a high-resolution Airborne Electromagnetic and Magnetics geophysics survey over the Dotted Lake Property, north of Ontario, Canada earlier this month. The processed results are expected to be available for planning the 2021 programme of works over the turn of the year.
Another trading day, and more newsflow from natural resources investor Gunsynd (GUN). The shares managed a 7% gain off the back of an announcement from ASX listed Malachite Resources, regarding the acquisition of Kolosori Nickel, a company in which Gunsynd has an investment. Gunsynd’s Hamish Harris said that the company will hold shares in an ASX listed company with an enlarged position in high grade nickel assets in the Solomon Islands with the potential for near term mining given the historic drilling that has taken place on both tenements.
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