Small caps movers: Deltex Medical booms as it bags new customer in the States

By Tom Howard / January 21, 2018 / www.proactiveinvestors.co.uk / Article Link

Budget cuts within the NHS have crippled Deltex Medical in recent years, leading the blood-flow-monitoring technology firm to try and seek its fortune elsewhere.

One territory where it has shifted its focus towards is the US and this week it secured a "major" new hospital across the pond as a customer - news which sent the shares soaring.

The hospital - supposedly among the top ten in the States - will now use Deltex's oesophageal Doppler monitoring probes after a successful trial period just before Christmas.

Importantly, the hospital is part of a six-centre healthcare system, all of which will be introduced to the ODM this year.

The stock jumped 50% this week to 1.65p. That was a welcome surge for investors who had to endure a poor set of full-year results and subsequent share price plunge earlier this month.

KEFI Minerals also shone after it upgraded the value of its Tulu Kapi gold project in Ethiopia.

The junior, though, has ended its relationship with infrastructure group Oryx, which had previously agreed to provide US$135mln of project finance to build and operate the gold mine.

KEFI said the structure for the development of Tulu Kapi would remain the same even with Oryx's exit with the other existing consortium members still in place.

At a gold price of US$1,300 per ounce, Tulu Kapi's net present value has risen to US$109mln pre-construction from US$92mln and to US$175mln (US$151mln) post-construction.

KEFI expects to hold a 55% stake in the project once the dilution from funding deals etc has been taken into account, which means its interest is worth around US$96mln, or around ?69mln.

With a market capitalisation of just over ?10mln, you can see why traders were ploughing into it this week, sending the stock 35.8% higher to 3.67p.

Fellow junior miner Greatland Gold was left battered and bruised after industry giant Newmont Mining decided to walk away from the former's flagship Ernest Giles project in Western Australia.

The two had signed an agreement last summer which granted Newmont access to the tenements and exploration database of the project for six months.

But it confirmed on Monday that it wouldn't be going any further with the project because of other "current corporate priorities", leading to a swift sell-off. The shares lost 27.6% to 0.67p.

Overall it was a steady week for the small caps, with the AIM All Share adding 0.4%, or 4.4 points, to 1,069.4.

That was significantly better than what the blue chips which were hampered by the pound's resurgence. The FTSE 100 closed the week down 0.6%, or 49.3 points, to 7,726.7.

HaiKe Chemical Group was one of those holding the junior market back.

The Chinese specialty chemical business saw almost a third eroded from its market cap after said it was mulling the possibility of cancelling its AIM listing.

Full-year profits more than halved to ?0.73mln in the 12 months ended 31 December (2016: ?1.91mln), despite revenues rising to ?96mln from ?82.2mln a year earlier.

HaiKe blamed a "critically difficult market" for the dive in profitability, as well as a reduction in output due to plant shutdowns for upgrade purposes.

"In light of the poor performance, the company said it is exploring all of its future options, including the possibility of delisting from the junior market and continuing as a private company," it told investors.

The shares fell 25.4% to 20.1p.

Balancing that out was the sharp rise for Galantas Gold - another gold explorer - which headed 50.7% higher to 6.6p after an encouraging update from its project in Omagh, Northern Ireland.

The Northern Ireland Environment Agency has been monitoring operations at the site and on Thursday it published a report stating that there was no evidence that the development activities were having a detrimental effect on the chemical quality of the groundwater around the site or of the Kerr Burn.

On top of that, Galantas also received some "very positive" exploration results for some of its Republic of Ireland licences.

A couple of old drill cores were found in a barn at one of the sites which contained intersections of high-grade copper, silver, lead, antimony and zinc and the company said it was figuring out how best to take the licences forward and maximise their value.

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