Horizonte Minerals (HZM) & Union Jack (UJO): 2 AIM stocks to buy now

Highlights 

  • Horizonte Minerals reported strong H1 2021 interim results and received approval from export credit agencies for project financing.
  • Union Jack Oil acquired an additional 15 per cent stake in the Biscathorpe play.

There has been a flurry of earnings announcements with the start of the new week that have been keeping the markets buzzing for the day. The blue-chip index FTSE 100 has bounced back and is up by around a per cent, at the same time, the mid cap index FTSE 250 has also gained around half a per cent. However, FTSE AIM All-Share index was reeling in red, down by over half a per cent.

Let us take a deeper dive into two stocks listed on the FTSE AIM All-Share index, which have defied the broader index movement and risen on positive earnings announcement, Horizonte Minerals Plc (LON: HZM) and Union Jack Oil PLC (LON: UJO):

  1. Horizonte Minerals Plc (LON: HZM)

Horizonte Minerals is the world’s leading nickel mineral exploration and development company. It reported its FY 2021 interim results and the approval from two export credit agencies (ECAs) for project financing of its ferro-nickel project Araguaia, in Brazil.

The company received approval for a senior debt facility of US$146.2 million in tranche A guaranteed by ECA, while trance B will be provided by several international financial organisations.

Its H1 2021 cash position was at £22.2 million, from £10.9 million in H1 2020 following the completion of an £18 million equity-based capital raise earlier this year.

Image description: Horizonte Minerals stock performance

(Image Source: Refinitiv)

Horizonte’s shares were trading at GBX 8.53, up by 6.56 per cent on 13 September 2021 at 08:48 AM GMT+1. The FTSE AIM All-Share index was trading at 1,290.17, down by 0.38 per cent.

The company has a market cap of £136.01 million and has netted shareholders 24.21 per cent in returns in one year as of 13 September.

  1. Union Jack Oil PLC (LON: UJO)

Union Jack Oil is UK based oil and gas company focused on onshore production, development and exploration and other activities.

The company’s shares jumped after reporting its H1 2021 results today. It reported oil production from its Wressle play contributed about US$300,000 net between 19 August to 9 September to Union Jack just from test production.

It also acquired an additional 15 per cent stake in the Biscathorpe play, thus bringing the company’s interest in the project to 45 per cent.

Image description: Union Jack Oil stock performance

(Image Source: Refinitiv)

Union Jack’s shares were trading at GBX 27.50, up by 3.77 per cent on 13 September at 10:06 AM GMT+1. The energy sectoral index was trading at 5,125.88, up by 0.98 per cent.

The company has a market cap of £26.26 million as of 13 September.

Bottom Line

Nickel is expected to be a forward-facing mineral as the world aims to transition towards a more sustainable future. Also, given Horizonte Mineral’s improved cash position and recent project financing update, the company is well positioned to benefit from the upcoming boom in demand.

Oil based stocks performance is highly sensitive to the prevailing tight supply in oil, thus investors considering investing in Union Jack must track OPEC’s supply output trends to gauge impact.

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