The Black Cat Syndicate Ltd (ASX: BC8) share price was a standout performer on the ASX today, catching the eye of small-cap ASX investors with an intra-day rise of as much as 46.94%.

Black Cat shares shot up after being reinstated to official quotation in afternoon trade. Shares eventually simmered down somewhat to close out the day 30.61% higher at 64 cents per share. This brings Black Cat’s current market capitalisation to around $54 million.

Black Cat Syndicate is a small-cap ASX gold miner. Its primary focus is on advanced exploration and development of the high-grade Bulong Gold Field, which is located 25km east of Kalgoorlie, Western Australia. Bulong is the result of the consolidation of a number of small-scale, high-grade mines and is comprised of around 82 square kilometres of mainly granted tenements, all 100% controlled by Black Cat.

Why the Black Cat Syndicate share price rocketed today

On Tuesday morning, Black Cat requested its shares be suspended from official quotation, pending the release of an announcement regarding a potential acquisition.

That announcement came this afternoon, when Black Cat revealed it had entered a binding agreement to acquire 2 gold projects from Silver Lake Resources Limited (ASX: SLR), subject to the satisfaction of certain conditions.

The 2 projects are:

• The Fingals Gold Project which comprises ~64 square kilometres of land and is located 30km south-east of the Bulong Gold Project; and
• The Rowe’s Find Gold Project which comprises ~41 square kilometres of land and is located 100km east of Bulong.

Upon completion of the acquisition, Black Cat’s landholding will increase from 168 square kilometres to 233 square kilometres.

Additionally, Fingals and Rowe’s Find have a combined JORC Mineral Resource Estimate of 5.2 million tonnes at 2.5 grams per tonne (g/t) gold for 425,000 ounces. This is expected to increase Black Cat’s total resources by 145% to 8.7 million tonnes at 2.6 g/t gold for 716,000 ounces.

Under the terms of the acquisition, Black Cat will pay a non-refundable deposit of $50,000. It will also issue around 8.4 million ordinary shares to Silver Lake, making Silver Lake a substantial shareholder in Black Cat.

The acquisition is conditional upon the completion of due diligence by Black Cat by 27 June 2020. Subject to the satisfaction of the conditions, the acquisition is expected to be completed in early July 2020.

Commenting on today’s update, Black Cat’s managing director Gareth Solly said:

“Fingals and Rowe’s Find have clear synergies to our Bulong Gold Project. The new projects contain 44 tenements of which 28 are Mining Leases with minimal barriers to mining. With this acquisition, we will increase our Resources by 145% to 719,000oz, add high quality exploration targets as well as near term mining opportunities. All this without significantly impacting Black Cat’s cash position.”

“We will complete due diligence and rank the exploration and mining opportunities accordingly. We also look forward to welcoming Silver Lake as a substantial shareholder upon completion of the Acquisition,” he added.

More reading

• 7 roaring ASX mid-cap shares last week
• ASX 200 finishes up 1.4%, gold miner share prices surge
• Why the best performing ASX stock might have more room to run higher
• These were the top 10 ASX 200 shares over the last year

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The bulls are back! The S&P/ASX 200 Index (Index:^AXJO) jumped a further 1.3% on Thursday – pushing the benchmark to a 12 week high.

We are likely to see more gains in the short-term too despite the market’s 29% gain since it hit a bear market bottom in late March.

More room for bulls to run

There are a few reasons for this, including an expected string of positive data from the gradual reopening of the global economy after the COVID-19 shutdown.

ASX shares certainly aren’t as cheap as they were in recent past, but there’s still value to be found for those who are yet to join in the party.

Testing positive in a good way

Testing and certification services provider ALS Ltd (ASX: ALS) is one that makes the cut, according to Morgans.

The broker reiterated it’s “add” recommendation on the stock after management posted its full year results yesterday.

“FY20 underlying financials met guidance despite COVID headwinds in Feb-Mar, suggesting Life Sciences [business] was tracking ahead of our expectations,” said the broker.

“We think the stock can keep running in-line with the re-opening of the global economy, and as it approaches the late July AGM where a critical trading update will be provided.”

The 6.1 cents a share dividend was also a positive surprise, although that was offset by a $90 million write-down of some underperforming businesses.

However, Morgans thinks the FY21 outlook for ALS is looking relatively bright considering the uncertainty caused by COVID-19.

The broker’s target price on the stock is $8.28 a share.

Strength in numbers

Meanwhile, JP Morgan reiterated its “overweight” rating on TPG Telecom Ltd (ASX: TPM) today as it believes there is good revenue upside potential for the telco post its merger with Vodafone Australia.

“There are a variety of revenue synergies that the company can pursue as a result of the merger and all are additive, with some potentially yielding as much as 30% further upside on a standalone basis,” said the broker.

These opportunities include fixed wireless broadband solution, fixed wireless data offload (used to cover holes in NBN coverage), cross selling NBN to Vodafone customers and cross selling mobile to TPG’s customers.

“While we currently don’t incorporate any of these opportunities in our estimates, adding them all together yields up to 85% further potential upside to our current DCF valuation,” added JP Morgan.

The broker’s current price target on the stock is $8.65 a share.

More reading

• Another sign the ASX 200 bull run is justified
• RBA governor says economy “doing better than was earlier feared”
• Why now could be a better time to buy the underperforming CSL share price
• ASX 200 bull market! Why this ASX fundie is getting nervous
• ASX 200 up 2.4%: Blackmores raises $92m, big four banks jump, Nearmap rockets

Motley Fool contributor Brendon Lau owns shares of TPG Telecom Limited. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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