• Aussie small cap index falls 1.4%
  • The ASX200 down 1.65%
  • Thursday is Arafura Day!

 

Down less than 2% and I think we can call that a win.

No one likes the sight of blood and after the major Wall Street indices shed more than 3.5% a piece, the fears of a morning bath failing to materialise as local stocks fell but did not extravasate all over the bathroom.

Around the grounds, however most Asia-Pacific markets were sharply lower in Thursday trade after the sudden exsanguination on Wall Street overnight.

Hong Kong’s Hang Seng led losses regionally, falling 2%, with the major Chinese tech names Alibaba and Tencent falling well over 6% the latter after revealing its quarterly profit had fallen by circa 50%.

Australia’s seasonally adjusted unemployment rate for dropped at 11.30 Sydney time and was at 3.9% for April, according to fresh but not always fabulous data from the busiest Bureau of Statistics ever.

“The last time the unemployment rate was lower than this was in August 1974,” the ABS boss of labor statistics Bjorn Jarvis said.

“I am a total legend,” the Prime Minister has been saying ever since, probably.

 

TODAY’S BIGGEST SMALL CAP WINNERS

(Stocks highlighted in yellow rose after making announcements during the trading day).

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Just going to call this one Arafura Resources (ASX:ARU) day. Not everyone is a fan of Hyundai, but I reckon ARU shareholders might do a double take the next time Mrs Edwards screams by with the two screaming mini-Edwards.

The near-term rare earths miner has signed a non-binding agreement to supply 1,000–1,500 tonnes per annum of neodymium and praseodymium (NdPr) to car maker Hyundai over a seven-year term starting in 2025.

ARU’s deal with Hyundai potentially represents just over one-third of the estimated average annual production capacity of 4,440 tonnes from the ‘Nolans’ project in the NT; that’s after an expected production ramp-up.

‘Nolans’ is a $1.05 billion capex NdPr project with the potential to supply 10% of the world’s rare earths magnet supply over a 35-year mine life.

ARU and Hyundai are working towards executing a definitive binding offtake agreement by September 2022.

Cannabis company Little Green Pharma (ASX:LGP) has signed a large-volume, take-or-pay contract with Four 20 Pharma for the exclusive supply of a new high-THC strain into Germany.

The agreement is LGP’s largest single-strain offtake quantity contract to date, with a minimum take or pay commitment of $7.5 million over 30 months.

The contract is for LGP’s recently-developed high-THC (25% THC) SMS strain, and will further expand LGP’s traction in Germany following the exclusive deal it signed with Demecan in April.

“We’re very excited by our new SMS strain as well as the opportunity to be partnering with Four 20 Pharma, one of the largest medicinal cannabis operators in Germany,” said LGP CEO Fleta Solomon.

“They have a highly successful track record of supplying its 420 Natural brand cannabis products into the German market,” she added.

Australia’s only ASX-listed accounting software firm Reckon (ASX:RKN) reckons it has $100 million in the pocket after it agreed to sell Accountants Practice Management Group to the UK-based Access Group for $100 million in an all-cash deal.

The Reckon board has recommended the all-cash sale to shareholders and will return proceeds via a special dividend once the deal is complete.

The deal takes in Reckon’s APS Practice Management software for larger firms and Reckon Elite for smaller firm.. Most of the proceeds are proposed to be returned to shareholders via a partially franked special dividend.

Following the transaction, $100m market cap Reckon “would be a focused, cloud-based business with exposure to high growth markets in Australia and the United States that delivered ~$50 million in revenue and EBITDA of $17 million in FY2021,” the company says.

It’s day two as a listed concern for Aurora Energy Metals (ASX:1AE) and the newcomer is entirely unconcerned by the quasi-rout on the local bourse, its shares are up about 30% above its Wednesday IPO of 20 cents. 

The $35 million mkt cap uranium and lithium play is exploring south-eastern Oregon with the $8 million it raised and is trading about 7% higher on a tough Thursday. So well done.

 

TODAY’S BIGGEST SMALL CAP LOSERS

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ANNOUNCEMENTS YOU MAY HAVE MISSED

First starter out of the gate is news from Emerald Resources (ASX:EMR), claiming a victory in its quest to seize control of the Bullseye Mining Board and operations. Emerald has upped its ownership to 50.56%, increasing its voting power and direct equity ownership in Bullseye. Emerald’s offer to shareholders has been extended for two weeks, and is urging Bullseye shareholders who have not yet accepted its offer to get in before the door slams shut at 5pm WST on Friday 3 June 2022.

Aeris Resources (ASX:AIS)  has informed the market that the retail component of its fully underwritten 1 for 4.22 pro-rata accelerated non-renounceable entitlement offer has run its course, raising a shade over $25 million at $0.105 a share. Roughly 234 million of the 247.4 million new shares have been allocated to the underwriters, with the balance scooped up by eligible retail shareholders.

Duke Exploration (ASX:DEX)  is positively beaming, after the company brought Geointerp data guru Leigh Rankin in to have a poke around its Bundarra Project area. After poring over the Queensland Geological Survey and Duke geophysical data, Rankin’s report shows additional potential copper fluid pathways and fluid sources that have eluded all other exploration at the site to date.

 

TRADING HALTS

Locality Planning Energy (ASX:LPE) – trading halt, pending the release of an announcement in relation to a change in Queensland wholesale electricity market conditions

Austral Resources (ASX:AR1) – trading halt, pending the release of an announcement in relation to an ASX Price and Volume Query

Desert Metals Limited (ASX:DM1) – trading halt in its securities pending the release of exploration results

Aston Minerals Limited (ASX: ASO) – trading halt, pending an announcement regarding a metallurgical update for the Edleston Project

BikeExchange (ASX:BEX) – trading halt, pending the expected release of an announcement relating to a proposed material equity capital raise

Invictus Energy (ASX:IVZ; OTC:IVCTF) – trading halt, pending an update in relation to a capital raising

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