Digging in Micro Cap Land

A handful of MicroCaps I have encountered this month

20 June, 2025

Hello, here are some introductory notes on four micro caps I have found recently. For micro caps I mean companies with less than $/€ 100M in market Cap and that don’t fit on institutional portfolios yet. I’m geography agnostic. Here they are!

Newlox Gold Ventures corp.

(CNSX: LUX)

Market cap. ~ CAD$6.5M

EV~ CAD$ 11M

Revenue FY24 ~ $2.8M

EBITDA. N/A

Revenue generating micro cap, which processes tailings and recovers gold from artisanal mining in Costa Rica. Newlox has two established processing plants with 80tpd and 150tpd capacity, which are located in the Abangares zone, where artisanal mining has been ongoing for decades.

Its kind of weird to be in the mining business in Costa Rica, a country well-known for being a natural paradise and a major tourist destination in Central America, but it seems the government of the country has been encouraging artisanal miners to form cooperatives, legalize their status, and to adopt more environmental-friendly practices which follow the Mining Code (Law No. 6797) & Minamata National Action Plan (2019).

The company is still not generating profits and has had liquidity issues recently.

1. The company raises capital through convertible debentures (which many have been subscribed by directors and their family members)

2. The share price got smashed below 0,15 cents, the price for the conversion to take place.

3. LUX managed to renegotiate a longer timeframe for maturity of the debentures (paying higher interests)

4. On August 4, 2024, the company got sanctioned by the regulator for not submitting the annual results on time, and was subject to a cease trade which has been in place since March 2025.

5. The cease trade made it impossible to raise new capital which created a working capital deficit and the halt of an expansion project to Colombia.

6. After the cease trade has been removed on March 25, the company has been able to repay $2M of debt and has made another debenture financing round.

The original plan of Newlox, is to export the same model of buying ore from artisanal miners and processing the gold to other latin American countries. Moreover, it targets 145k oz p/a in 5-years with 8 plants in production, which I feel is a very ambitious plan.

If your familiar with Dynacor Group (TSX: DNG) you’ll know that DNG was founded in 1996 and is currently processing 100-150k oz p/a with one processing plant. So I have trouble to visualize Newlox getting 8 plants across Latin America and outpacing Dynacor current production in only 5 years.

Old Chang Kee Ltd.

(Catalist: 5ML)

Market Cap. ~SGD$117M

EV. ~ $87M

Revenue FY24 ~ $100.9M

EBITDA FY24 ~ $26.8M

Old Chang Kee is a Singaporean business which manufactures and sells asian style food products across some 80 outlets and a catering B2B division. The outlets are in high-foot traffic zones like airports, train stations, malls and business districts, where they offer grab’n go, affordable food products.

Revenue per outlet has been growing double digit since the Covid lows in 2021 but profitability has been offset by inflationary pressures of raw materials and manpower shortages. The company has some operating leverage. In FY24 an increase of 12.4% in revenue added +17% gross profit growth and +42% operating profit growth. Same goes the other way. In FY22, cost of sales and operating expenses grew more than revenue making a -52.5% drop in operating profit. Interestingly, management stated that they want to grow the catering service division, or B2B sales, which could offset possible lower consumer traffic at some point. B2B segment has grown from 2% of sales in FY19 to 11% in FY24.

Old Chang kee has a clean Balance Sheet with current ratio of 1.8, and cash representing 86% of current assets, while leases are the main liability component. The company trades in a secondary market in Singapore while the Chairman, Han Kee Juan, owns ~65% of shares. Low multiples of 3-4X EBITDA compared to 10-11X EBITDA before the Covid era.

An issue, in my opinion, is customer satisfaction. Google reviews are mixed and the average score is kind of 3.5/5. Many complain about the food quality decreasing. Moreover, there’s not much of strategic growth plans released, although they have plenty of cash reserves. The company pays only a modest dividend (2% yield).

Calnex Solutions plc

(AIM: CLX)

Market Cap. ~£44M

EV. ~£34M

Revenue FY25 ~£18M

EBITDA FY25 ~£5.4M

This U.K-based company specializes in test and measurement instrumentation for:

1. Network synchronization (ensuring precise timing and coordination between active devices).

2. Emulation (Replicating real-world network conditions in a controlled environment to test the performance and resilience of networks and applications).

Calnex serves both, hardware & software + gives warranty support, and primarily works with telecommunication, cloud computing, data centers, and OEM’s with highly specialized technology.

The company experienced high demand since going public at the end of 2020, growing sales by high double-digit until FY24. After that, the trend started to normalize, at the same time that the telecom sector lowered its business activity. Even so, Calnex is able to maintain a gross margin > 70% due to the standard hardware they sell + the software part of the service. The company needs to spend on R&D to launch new products, and amortization of R&D costs is the main item affecting operating profit. Besides that, the balance sheet is currently in a net cash position.

The market opportunity here is:

1. Innovation to serve the 5G market and beyond.

2. Expansion of data centers and cloud computing markets.

3. Expansion of satellite and non-terrestrial network and defence applications.

MLG Oz Limited

(ASX:MLG)

Market Cap. ~AUD$ 112M

EV. ~$194M

Revenue FY24 ~ $474M

EBITDA FY24 ~$55M

Australian Company founded 22 years ago, which specializes on a broad range of mining services:

1. civil works and mining operations

2. crushing & screening

3. bulk haulage & site services

4. construction materials

MLG currently works in more than 30 sites, mostly with blue-chip or tier 2 operators, like Newmont, Bellevue Gold or Rio Tinto. Its works are 86% weighed towards gold mining, with the rest being Iron Ore, base metals and construction materials. In it’s recent presentation the company explained that it’s seeing the largest investments in processing capacity from gold miners during the last 10 years, while other metals like lithium or copper are expected to ramp-up operations in the near-term. Service contracts can span from several months to multi-year contracts. With the site services, like bulk haulage or open pit mining services, being the main driver of business volume. MLG is able to work in multiple mines from the same client, as the Australian mining landscape is consolidating towards a hub and spoke model, where large central processing facilities are fed from multiple satellite mines.

With the budget increase from gold miners, MLG has seen revenues grow +23% in FY24 vs. FY23 and an EBITDA growth of +57.8%. On a compounded annual growth rate, MLG revenue has grown +28% CAGR. since 2018. The company has plans to invest more in its fleet and equipment, and has increased its growth CAPEX way above maintenance CAPEX for the last years.

On a multiple basis, MLG has traded at 3-4X EBITDA for the last 4 years. My personal feeling, is that certain Australian equities tend to have a lot of multiple expansion from pension funds buying, if the company seems to fit their criteria. This has been not the case here for now. The company is founder-led by Murray Leahy, which owns 73.9 million shares (~45% ownership).

Disclaimer: I have no position nor I have an in-depth knowledge of these companies. This are just notes from a quick research. Not financial advise.