SMALL CAP MOVERS: Mining sector defies wider market gloom

The funding drought has been – and in many ways continues to be – the biggest problem for British growth markets in 2023.

But if this week’s events are anything to go by, there could be a glimmer of hope that the era of austerity is coming to an end, at least for the mining segment.

Starting Monday was Metals of the Empirewhich secured £3m to expand its drilling plans in Western Australia.

Empire said the placing was “significantly” oversubscribed at the strike price of 4 pence per share, which is a 10 per cent discount to the previous week’s close.

On Wednesday, Rainbow Rare Earths did the same with a £4.5m private placement with a 3 per cent discount offer of 15p.

However, the crown surely went to a uranium investment company. yellow cakethe mid-cap pillar of the AIM top 10.

On Thursday, Yellow Cake sold 18.7 million new shares in another oversubscribed offering representing 9.4 per cent of outstanding capital at 550 pence per share.

That was for a discount of just 2 per cent, and the £103m fundraising was one of the largest in the junior market this year.

In a year of disastrously desperate discounts in the upper 60 percent range, these paltry discounts were more or less a premium comparatively speaking.

In the biotech space, N4 Pharmaceutical suffered a 30 per cent hit to its share price, although this was due to a placing of £350,000 in 35 million new ordinary shares to finance the acquisition of a majority stake in Nanogenics, a company developing management technology “complementary” based on lipids and peptides.

Shield Therapeutics also jumped on the fundraising bandwagon with a share placing and a $7.5m (£6.1m) retail offering at an 18 per cent discount.

This is in addition to a $20 million debt issuance to support the development of Accrufer, its treatment for iron deficiency. Shares fell 30 percent following the fundraising announcement.

The AIM All-Share Index drifted lower for most of the week until the market rebounded higher on Friday morning.

Whether buoyed by the weekend or delighted by an upward revision to economic growth figures emerging from the Office for National Statistics, the index bounced from weekly lows below 724 points to reclaim the 727-point line.

According to the ONS, UK GDP rose an unrevised 0.2 per cent in the second quarter of the year, although the estimate for the first quarter was revised upwards to 0.3 per cent from 0.1 per cent. .

In terms of production, growth in the last quarter was driven by a 1.2 percent increase in the productive sector, while the household savings rate grew by 9.1 percent, up from 7.9 percent. cent of the first quarter.

However, AIM still had a net negative week, falling 1.4 per cent at the time of writing, compared to just 0.6 per cent losses for the blue-chip FTSE 100 index.

Much of the decline in the junior market was felt this week in the media and entertainment sectors.

small construction I had a bit of a surprise. The video game publisher of the Hello Neighbor stealth horror franchise lost 40 per cent of its value after acknowledging its difficulties in achieving profitability for the rest of the financial year, having suffered huge pre-tax losses in the first half.

Sticking to the video game sector, Offer group was also in the line of fire after the in-game targeted advertising group released its tentatives on Friday.

As a result of shrinking revenues and margins, the company’s shares fell more than 40 percent. VidendumThe provider of production and creative solutions to the film industry, plummeted by almost half after revealing the impact that the Hollywood strikes have had on the company.

In Videndum’s interim results call, the group revealed that writers’ strikes caused interim revenue to fall 24 per cent, generating a loss of £50m compared to a profit of £16.4m a year before.

Tasty Shareholders were angered following the restaurant group’s interim results on Wednesday. Clearly, inflationary pressures have hit the group hard, with higher labor, food and utility costs affecting its finances.

Underlying profits fell nearly 60 per cent to £1.1m and revenue only rose 0.9 per cent to £21.7m.

As a result, shares fell more than 30 percent.

Finally, IPOs at the lower end of the market have been a rarity in 2023, with a risk-averse attitude freezing all but the most determined entrepreneurs.

However, Substrate Artificial Intelligence, led by Iván García, has decided to press the “go” button. It is considering an imminent listing on the Aquis Exchange and then a promotion to AIM.

Substrate is carving out a unique space in the crowded field of artificial intelligence.

What it says sets it apart is its patented, biologically inspired learning technology, the brainchild of co-founder and CTO Bren Worth.

To limit the downside, Substrate has acquired businesses in the areas of fintech, energy, agtech, human resources and healthcare where it can apply its AI.

The good thing about this approach is that Substrate generates revenue, currently to the tune of €12m (£10.4m) annually.

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