Directors are confident of commodity prices recovering. Pic: Getty Images
Director Trades
Directors of several companies have been making the most of continued volatility in equity markets in 2024 to top up stakes in their companies, buying shares via on-market trades or participating in capital raisings.
For eagle-eyed investors, this can often be seen as a positive sign because it implies the director is not-so-quietly-confident in the company’s projects when they put some of their own cash into the kitty.
It’s by no means a guarantee the company will do well or is worth investing in but, if a director has some personal wealth tied to the company’s success, it could lead to greater accountability and decision-making that’s in the best interest of shareholders.
While tech was the winner of the sectors in February, up more than 19%, materials saw a ~6% decline for the month and is down ~10% YTD, as the sector feels the pinch of falling commodity prices.
But if recent director buy ups are anything to go by it seems directors of ASX resources companies are confident of a turnaround.
Green hydrogen developer Provaris Energy (ASX:PV1) has seen its directors strongly support their recent placement.
In an ASX announcement PV1 says at a general meeting of shareholders on February 27 2024, tranche 2 of the placement comprising the issue of 5.75 million ordinary shares to company’s directors at an issue price of 4 cents/share were approved, raising a further $230,000.
Total funds raised from the placement is $1.9m. Furthermore, shareholders also approved the issue of 23.75m options attached to the placement of shares, which have an exercise price of 7.5 cents/share with an expiry date of March 1, 2026.
PV1 says that the funds raised through the placement will be used for construction activities and testing in Norway of a prototype tank designed for its proprietary H2Neo hydrogen carrier.
The successful testing of the prototype is pivotal in obtaining final class approvals, representing a significant milestone in mitigating risks and enhancing the preparedness of PV1’s shipping and storage solutions.
PV1 says the increasing attention and strategic focus on compression positions the company as a key player in delivering low-cost gaseous green hydrogen, crucial for meeting Europe’s ambitious goal of relying on 10 million tonnes per annum of imported volume by 2030.
Lithium-focused explorer GreenTech Metals (ASX:GRE) has seen its executive director Thomas Reddicliffe pony up for 225,000 shares directly on market for ~$55k.
GRE originated as a spinout of Artemis Resources (ASX:ARV), which gained prominence as a gold junior riding the Pilbara’s ‘conglomerate gold’ rush in 2017.
The explorer holds a 51% interest in the Osborne lithium JV with ARV where exploration at the Osborne pegmatite trend is evolving into an exciting target over its ~700m strike length showing high lithium grades of up to 2.36% recently.
Established in 2022, the JV initially focused on substantiating copper and nickel targets but refocused after discovering promising high-grade lithium pegmatite trends.
“We’ve got a fantastic slice of a lithium corridor just down the road from what is looking like a world class lithium pegmatite discovery by Azure Minerals (ASX:AZS) so we couldn’t get a better address,” Reddicliffe told Stockhead.
While showing signs of a small recovery, lithium has been in bear market over the past few months with a price plunge in the battery raw material.
“We think the lithium sector has been oversold and the lithium price will come back and when it does will be reflected in the value of explorers,” Reddicliffe says.
“It’s very early days for our project but we do have lithium bearing pegmatites and I think as we go forward this is a signal to our shareholders that management is confident in the prospectivity of our project and the chances of success.”
The new board of medical devices company ImpediMed (ASX:IPD) have shown their confidence in the company. Non-executive director Janelle Delaney purchased 1,137,634 ordinary shares in IPD indirectly on market for $99,591 between February 28 and March 4.
Non-executive director Andrew Grant purchased 230,000 shares between February 28 and 29 for ~$19,600, while new chair Christine Emmanuel-Donnelly purchased 167,857 for ~$14,000 on-market on February 28.
IPD focuses on secondary lymphoedema, which is predominantly caused by damage to lymph nodes due to cancer or treatment for cancer. The condition causes swelling of certain parts of the body, usually arms or legs.
The company’s SOZO device, incorporating its trademarked L-Dex technology and bioimpedance spectroscopy (BIS), non-invasively, accurately, and quickly measures and monitors fluid status.
IPD’s leadership has told Stockhead they are focused on preventing painful lymphoedema that can affect many cancer sufferers and generate future value for shareholders putting behind last year’s boardroom stoush.
The company now has a completely new board of five.
READ: ImpediMed’s new leadership team looks to grow the company
The largest rare earth producer outside China, Lynas (ASX:LYC) has seen its non-executive director John Beevers buy the dip. Beevers added 27,787 ordinary shares totalling ~$162,000 to his holding on February 29.
Lower prices for rare earths saw LYC’s NPAT tumble from $150.1m in H1 FY23 to $39.5m in H1 FY24, matching revenue and EBITDA slides from $370m to $234.8m and $189m to $62.6m, respectively.
As Stockhead’s Josh Chiat reported, LYC had lower sale costs, down from $185m to $159m, but saw its closing cash fall from $934.2m to $686.1m YoY, having invested $347m in capex over the December half, mainly on the construction of its Kalgoorlie cracking and leaching plant and expanding its Mt Weld mine near Laverton.
LYC’s production output was also hampered by a six-week shutdown of its Malaysian refinery, where its separation capacity was scaled up to 10,500tpa.
In February LYC confirmed speculation it was in discussions around a merger with MP Materials but announced the talks were not ongoing.
The deal would have created a single global ex-China rare earths major with two of the world’s largest sources of light rare earths in Lynas’ Mt Weld and MP Materials’ Mountain Pass mine in California.
The LYC share price is down ~16% YTD.
In a show of confidence in the embattled aquaculture company Seafarms Group (ASX:SFG), non-executive director Ian Trahar purchased 6,115,294 ordinary shares for $24,730.21 on market on February 29.
On February 22 the Federal Court ruled SFG subsidiary Project Sea Dragon Pty Ltd (PSD), which is operating a prawn project on a Northern Territory cattle station, is insolvent pending an appeal.
CEO and executive director Rod Dyer said the judgment delivered by the Federal Court was surprising,
“On review of the judgement, our view is that it contains significant errors in both fact and law,” he said in an ASX announcement.
“Those significant errors provide a sound basis for an appeal that ultimately, we believe, will be successful.
“Despite the judge’s decision to the contrary, we remain of the view that PSD is solvent because it is paying all of its debts as and when they fall due.”
SFG entered a trading halt on February 21 and on February 27 released its H1 FY24 results including revenue from its Queensland operations up 28% to $20,324,04 on pcp.
The group’s net loss after tax of $6,003,711 was 52.5% lower than pcp, which SFG says was primarily due to a reduction of construction expenditure on PSD.
Total production of 697 tonnes was up from 594 tonnes on pcp. Cash and cash equivalents at the end of H1 FY24 were ~$6.8 million, down from ~$8.45 million at the end of H2 FY23, with the cash outflow attributable to continued expenditure on prawn farming operations in Queensland and PSD.
The SFG share price is down ~33% YTD.
Rare earths explorer Lindian Resources’ (ASX:LIN) independent non-executive director Alwyn Vorster bought 300,000 ordinary shares indirectly costing $45,000 in an on-market trade on February 29.
Education company NextEd Group (ASX:NXD) has announced chair Cass O’Connor has purchased 70,000 ordinary shares for $21,900 indirectly on-market on February 28. Non-executive director Sandra Hook bought 40,000 ordinary shares indirectly for $16,000 in an on-market trade on March 1.
At Stockhead, we tell it like it is. While Greentech Metals is a Stockhead advertisers, they did not sponsor this article.
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