SMALL CAP MOVERS: A global rare earths champion emerges from AIM

Daily Mail​

9 hours ago

Rare earth elements are not rare in the Earth's crust, but they are seldom found in concentrated forms, making them expensive and environmentally challenging to extract.
This group of 17 metals, with names like neodymium, dysprosium and lanthanum, might sound obscure, but they underpin much of modern life.
Their best-known use is in the magnets that power electric vehicles and wind turbines. Neodymium, for example, drives the tiny but powerful magnets found in everything from Tesla motors to iPhone speakers.
Lanthanum is used in camera lenses and hybrid batteries. Others are essential for polishing glass, refining oil and even colouring TV screens.
In the age of artificial intelligence, rare earths are increasingly strategic. Data centres and advanced computing systems rely on efficient cooling and high-performance hardware, both of which often use rare earth materials.
But the global supply chain is lopsided. China controls over 80 per cent of processing, giving it enormous geopolitical leverage.
Against this backdrop, a new international rare earths champion has emerged from AIM, though it won't remain on the junior market for long.
Mkango, which recycles rather than mines these elements, saw its shares jump 77 per cent this week after announcing a merger that will create a dedicated global rare earths company listed on Nasdaq, with a valuation of $400million.
In a flat week for blue-chip stocks, the AIM All-Share outperformed again, rising 1 per cent to 775.57.
Risk appetite can be gauged by the buoyancy of the small-cap index, but another measure is fundraisings, with investors showing confidence by putting up cold, hard cash.
It may be too early to declare AIM's renaissance, but green shoots are appearing in abundance.
Last month saw around 50 (modest) investment rounds in the form of share placings, retail offers, direct subscriptions and more exotic structures such as convertible loan notes.
The biggest beneficiary was The Smarter Web Company, whose backers got behind its Bitcoin treasury strategy with more than £70million of new investment.
July began with a bang, and Thursday, in particular was a big day with fewer than seven companies top up their coffers.
While crypto was inevitably a theme, the action spread across sectors. Miner Rockfire Resources and media tech firm Blackbird raised £2million each. Other beneficiaries were in oil and gas and gold.
Among the risers was something of a mystery (at least to this grizzled market reporter) as shares in 4GLOBAL soared 150 per cent.
The rally came despite the sports data firm confirming in June it would de-list from AIM on 7 July, citing rising costs, regulatory burdens and limited access to fresh capital.
The company, which helps plan large-scale sporting events using data analytics, has issued no updates to explain the spike.
Thruvision Group, the walk-through security specialist, ended the week a third higher.
The catalyst was a fundraiser set to bring in at least £2.5million, extending its cash runway from year-end to 2027 and giving it room to scale up commercial plans.
Now to this week's booby prize winners.
Versarien, the graphene materials specialist, is nearing the end of its cash runway.
It warned that without new financing it would be unable to pay its debts by August without taking 'additional restructuring action and raising further funds'. The shares tumbled 55 per cent.
Crism Therapeutics is bringing in fresh funding, but at a cost. Shares were heavily discounted to 12p, down from 21p a week earlier. The resulting dilution from the £870,000 equity raise saw the stock plunge nearly 48 per cent.
Finally, Solvonis Therapeutics has more than doubled in value since acquiring Canada-listed Awkn Life Sciences last month.
Under CEO Anthony Tennyson, the business has been transformed from a failing polymers firm into a vibrant life sciences group working on cutting-edge treatments for conditions such as post-traumatic stress disorder.
Its chief scientific officer is Professor David Nutt, one of the UK's most eminent researchers.
There is an argument that the market is only just beginning to recognise Solvonis's true potential. It has a phase III asset developed to treat alcohol use disorder, one of society's most pernicious threats.
Watch this space.