MARKET MINNOW: Bluejay Mining - backed by Ian Hannam - is one to watch on AIM

FEW characters divide the City more than Ian Hannam, the former JPMorgan banker.

At the peak of his powers in the late Nineties and early Noughties, he worked on nearly every major natural resources deal from the merger of BHP and Billiton to the creation of Kazakhmys. But controversy was never far from his door, and in 2012 he was fined £450,000 for disclosing to a client inside information about a potential takeover of an oil and gas company called Heritage.

Most recently, he has re-emerged on the small-cap market, building up a steady list of clients including miners Stratex, RockRose Energy, Rainbow Rare Earths and Echo Energy. Hannam’s latest client win is AIM-listed Bluejay Mining. Last month, Bluejay raised £17 million to support its ilmenite project in Greenland.

Ilmenite is used to make titanium dioxide, a pigment that is a component of white paint. Titanium dioxide is also a colouring in sunscreens, make-up and food, and has a variety of industrial uses.

The funds raised will be used to start a feasibility study and complete licensing agreements, with site works due to start in the second quarter of this year and construction scheduled for 2019. John Meyer, an analyst at SP Angel, said: “Bluejay is fortunate to have discovered the world’s largest-known, high-grade ilmenite mineral resource. The sheer scale and consistency of the high-grade mineralisation is extraordinary and while the location in Greenland presents challenges, these appear relatively easy to overcome from an engineering and production perspective.”

The share price has risen steadily since March 2016 and analysts have set a target price of 37p. The current price is 23.5p.

But there are, as always with small-cap miners, plenty of risks. The firm operates along 20 miles of coastline in north-west Greenland, where the weather is brutal and environmental laws are strict. It also must still apply for an exploitation licence.

Bluejay also needs about £50 million to bring the Pituffik project to fruition, and cash on the balance sheet stands at £18 million after the fundraising.

No doubt Hannam will find a finance solution. Analysts say this problem could be solved if refiners and chemical companies sign offtake deals, giving Bluejay upfront capital in return for a fixed amount of ilmenite at a set price over an agreed period of time.

This stock is definitely worth a punt, even if the prospect of a Greenland-located miner gives investors a chill.