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Proactive news summary: Tissue Regenix, North River Resources, Kirkland Lake Gold, Deltex Medical, Ncondezi Energy

Last updated: 12:13 12 Dec 2013 EST, First published: 13:13 12 Dec 2013 EST

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Tissue Regenix (LON:TRX) was among the top risers in London as another punchy broker recommendation for Tissue Regenix (LON:TRX) highlighted that a key point in the medtech company’s short history is rapidly approaching.

The regenerative medical group today announced the appointment of a 40-strong sales team in the US ahead of the launch of its first product, a skin replacement for use in chronic wounds, early next year.

It sent the share price jumping by over a quarter to a new all-time high, valuing it at £144mln.

That looks a heady price for a company yet to sell anything, let alone in commercial quantities, but it reflects the fact that medical device giants are prepared to pay heavily for entry into a new market expected to show exponential growth.

Tissue’s speciality is a washing process, dCELL, which removes existing cells and DNA from donor human tissue but leaves it in a condition where the patient’s own cells can re-populate it, effectively eliminating the risk of rejection and speeding up healing.

Products under development include heart replacements, knee cartilages and blood vessels but the first product will be Dermapure, a skin replacement for repairing serious external wounds

This is a growing market. In the US alone annual sales are about US$1.5bn and rising 6% annually driven by donor organ supply shortages and the expense of treating bad wounds.

Broker Panmure Gordon said it had been impressed so far with the way the company had gone about tackling the US market.

Describing the sales appointments as “terrific news”, it should allow a strong entry into the US market it said, adding it was “disruptive technology, taking on the incumbents head on”.

Investors in North River Resources (LON:NRRP) are starting to see the value return to the stock.

The company, whose shares rose 12% on Thursday, posted a resource upgrade well in excess of its own internal forecasts for the Namib lead, zinc and silver project in Namibia.

Overall, it has increased by 129% to 1.53mln tonnes, with 917,000 tonnes added to the fresh ore resource. The company also unveiled a maiden tailings resource of 610,000 tonnes at 2.1% zinc.

There was also a substantial movement of resources from the inferred to indicated category. In fresh ore, indicated resources have increased from 80,000 tonnes to 659,000 tonnes.

The upgrade to the indicated resource pleased managing director Martin French the most.

“Indicated [resources] can be converted into reserves, which are the important thing if you are trying to get bank financing – it’s what everyone looks at,” he told Proactive Investors.

He says the company will have to raise more funds at some point as it looks to reach production before the end of next year.

French also dismissed comments from SP Angel, which questioned the validity of the upgrade under JORC rules.

He pointed out that the company dumped the broker recently due to a lack of activity on its part and suggested the negative write-up had a hint of sour grapes about it.

Kirkland Lake Gold (LON:KGI) shares fell on Thursday as it warned full-year gold production would be at the lower end of its prior 150,000 to 180,000 ounce target.

The company said its strategy is to gradually increase production in the coming years whilst remaining focused on managing costs.

Following last month’s appointment of George Ogilvie as the group’s new chief executive, Kirkland Lake has decided to cut back spending, with measures including a reduction in exploration, contracting and the shut-down of lower-grade mining.

Deltex Medical (LON:DEMG) edged higher as it established a joint venture in Canada with Provincial Medical Supplies (PMS), the first partnership it has set up with one of its international distributors.

The blood flow monitoring specialist said the move is designed to speed up growth and will mean margins pooled between the two companies instead being split as was the previous arrangement. 

Deltex Medical will own 51% of Deltex Medical Canada and have a majority on the five-strong board. It acquired the customer list from PMS for £185,000 before setting up the venture.

Finally, Ncondezi Energy (LON:NCCL) finished 2% higher after it agreed the ownership structure of a 300 megawatt power plant to be built next to its coal deposit in Mozambique’s Tete region. 

The idea is to give the state power company and the Mozambican people equity stakes as well as bringing in local and overseas investors.

Under heads of terms outlined on Thursday, Electricidade de Moçambique will receive an initial 5% of the project vehicle with the option to acquire a further 10% on “commercial terms”.


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