Pre-Budget Hiatus

Perhaps it was the approach of the half-term holidays or, more importantly, the Budget, but the small-cap end of the stock market appeared quieter than usual this week. Indeed, where there were highlights, they were to the downside in terms of share price movements. For instance, former stock market darling Guardian Metal Resources Plc | GMET:LN  continued to lose ground. 

Having peaked at over 300p in April, the shares ended the week at 77p. This is quite a fall from grace, given that the market cap in the spring would have been over £0.5bn. When I noted this among a group of stock market investors during the week, it was suggested to me that the company had been “over-hyped”. I think this is somewhat unfair, as, to my mind, the company was very well promoted and did so at the right time in the explorer/developer cycle. That said, the driver here is that the company would be one of those addressing the US critical-metals supply chain and its security. At the end of the day, the only way to do this is through production, not just exploration and proving up assets. But perhaps just as relevant—and something that CEO Oliver Friesen will be aware of—is that the Lassonde Curve has kicked in. Although my favourite curve is the Laffer Curve, no one in government currently appears to believe in it. The Lassonde Curve, however, has almost god-like credibility, so much so that there are mining companies I know that are keen to suggest they have been able to escape its peaks and troughs.

Source: Visualcapitalist.com

But in the case of Guardian, looking at the Lassonde graphic, it can be seen that the share price has very much entered the Orphan Period. The question now, with the shares down by more than two-thirds from their peak, is whether current levels represent the floor ahead of a big bull run as it moves towards becoming an operating company.

This Week’s Movers

As I have said, this week’s price action tended to be notably to the downside rather than the upside. Catenai Plc | CTAI:LN fell on news regarding the Klarian loan, although one might suggest that the reaction in the shares was overdone. The identification of wide gold and copper zones at Red Setter was not enough to prevent shares in Wishbone Gold Plc | WSBN:LN  from falling 37%. More understandable was a £25m fundraise pulling the rug from under Invinity Energy Systems Plc | IES:LN , with Cornish Metals Plc | TIN:LN  down 25% in the wake of a chunky £135m cash call.  Georgina Energy Plc. | GEX:LN fell as the incessant negative coverage it has received resurfaced, presumably because the company has continued to confound the bears. This kind of victimisation really has to stop.

That said, it was the decline in well-followed stocks that caught the eye: Mkango Resources Ltd. | MKA:CA , Kendrick Resources PLC | KEN:LN  and RC365 Holding | RCGH:LN were among them. One wonders whether this is merely seasonal profit-taking or something more serious?

As far as the relatively small number of risers were concerned, four out of five of Friday’s risers are stocks that have been successfully charted here in the recent past: Eurasia Mining | EUA:LN , MedPal AI Plc | MPAL:LN , Huddled (HUD) and the biggest riser of all, Critical Metals (CRTM). The latter must be one of my best charting calls of the year, and it has been soaring since the beginning of last month. 

As far as Medpal (MPAL) is concerned, it would appear that the last of the IPO investors are out and the shares are ready for a fresh leg to the upside. The ongoing charting call here was, and perhaps still is, 10p by the end of October. A punchy call, but then again, it is a punchy stock. I look forward to my next Mounjaro delivery and can only praise the very efficient New Health service, which has helped me achieve my 25kg weight loss.

Bradda Head 

One of the advantages I have as an actual financial journalist of over 25 years’ standing (NUJ) is that I have interviewed hundreds of CEOs in my time. This is unlike most of the fly-by-night people on the financial PR/IR scene, where the barrier to entry these days is minimal: set up a website, buy followers/views and then hoodwink CEOs with a pushy sales technique and a matey demeanour. Given my experience, it is all the easier to know when I meet the real deal—someone who can steer a listed company in the right direction. Indeed, now in my seventh decade, I am making it more of a mission to meet companies face to face.

This week, I attended the Gentile Mining & Metals Show in London. It was brilliantly organised, and not only did I speak to several companies, but I even dared to ask a “difficult” question during the panel discussion. Later in the week, I met Ian Stalker of Bradda Head Lithium (BHL). And what an eye-opener it was. I am familiar with Ian, but hearing about the company, his other investments and his companies was actually as much an inspiration as anything else. And I do not say that often. The CV of the management team is key to a company’s success, and one would expect this and other factors to prevail at BHL. If there is a sizzle to look at here, it is not just the flagship Whistlejacket Lithium Project but also the bargain-basement purchase, announced last month, of six Tanzanian uranium assets for just $1.8m. Oh, and by the way, Ian and I both hail from Glasgow and are devoted Beatles fans.