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I keep an eye on the most popular UK shares among Stocks and Shares ISA investors each month. And in September, 80 Mile (LSE: 80M) made a storming entrance, zooming up the charts seemingly from nowhere. In fact, it even topped the interactive investor list of most-bought ISA stocks in the week ended 25 September.
With a market cap of a bit under £64m and a share price less than 1.2p, it’s very much in the penny stock category. And it was worth a fair bit less just a couple of weeks ago, since when the price has rocketed by 75%. So what’s happened? Well, it’s all about the US, Denmark… and Greenland!
Rare minerals access
The geopolitical angle makes all the difference, as 80 Mile is an AIM-listed mining company, with projects across that big icy island that Donald Trump likes so much.
In an company announcement, we heard:
Our joint venture with Greenland Energy Company provides investors with exposure to one of the world’s last remaining untested hydrocarbon basins. […] We believe the strengthening relationship between Greenland, Denmark and the United States represents an important positive development for responsible resource investment. Greater geopolitical stability, closer defence cooperation and a clearer long-term strategic framework should enhance investor confidence and support the development of energy as well as critical mineral supply chains.
Roderick McIllree, Executive Director, 24 September
New developments
It came as part of an announcement regarding exploration rights associated with 80 Mile’s Jameson joint venture agreement and its cooperation with Greenland Energy.
Greenland Energy will take responsibility for all permits and licenses for the Jameson Project 1 and Project 2. And the dates for exploratory drilling have been extended to December 31, 2028. As part of the deal, Greenland Energy will pay 80 Mile £500,000 in cash upon signing.
The joint venture terms remain otherwise unchanged. Does this signal an apparent renewed urgency in developing Greenland’s largely untapped mineral wealth? It sounds like it just might be.
Caution needed
Investors need to remain aware of one key thing. This announcement made it clear that regulatory, environmental, and community factors still lie in the path ahead. And the Greenland authorities have the final say.
At the moment, 80 Mile isn’t profitable. In the first half of this year, the company posted a £1.46m pre-tax loss. And it ended the period with net cash of just £286,000. As for analyst forecasts, I can’t find any.
But that might soon become meaningless, as the company is in potential merger talks with Greenland Energy, listed in the US.
What should we do?
Are there attractive prospects here now that Greenland looks like opening up? I really do think so, yes. But I’ll wait at least until we hear how the merger talks go before I make any decision. I suggest other investors might consider doing the same.
And if I buy, it will only be within my key Stocks and Shares ISA goal of diversification. Fortunately, I see plenty more top investment opportunities for achieving that…
Should you invest £5,000 in 80 Mile Plc right now?
When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.
And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if 80 Mile Plc made the list?
Alan Oscroft does not hold any positions in the companies mentioned.
This story originally appeared on Motley Fool
