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Can Xcite Energy Limited, Amur Minerals Corporation And AFC Energy plc Provide Big Small-Cap Gains?

Small-cap companies can turn into big winners, but you often need steely nerves to ride out their volatility. Different investors see things differently (and I’m sure some of my Foolish colleagues would disagree with me), but here are three that I’m looking closely at:

Slumping oil

Xcite Energy (LSE: XEL), the oil explorer based in the North Sea, has seen its shares crash by 70% since their peak in May 2014, to just 27p today. And it’s not hard to see why. North Sea oil has significantly higher extraction costs than some regions of the world, and with a barrel of crude selling for around $65, margins can be a bit thin.

Xcite is not flush with cash either, with just £32.5m on the books at 31 December, after the firm secured new debt financing during 2014. But its resources are valuable, so how can it progress from here? Well, the firm told us it’s collaborating with Statoil, Shell and EnQuest in order to “evaluate potential development and operational synergies“. Might we even see a takeover attempt?

Cheap metals

If you shy away from recovery prospects, how about Amur Minerals (LSE: AMC), whose share price has trebled over 12 months to 12.75p? Amur mines for base metals in Eastern Russia, and boasts some of the lowest discovery costs in the world for nickel.

Amur is not delivering profits right now, but a resource update this month estimated some impressive riches at the company’s Kubuk project, with indicated resources thought to contain 23,400 tonnes of nickel and 6,100 tonnes of copper.

The downside? Well, it is under Russian rule, and they’re not our best political friends right now. And with no profits, there are no financial metrics yet. But the City seems to like the shares.

A five-bagger

Energy storage is big business, and you might expect “the world’s leading developer of low-cost alkaline fuel cell technology” to be doing well. And it is, at least in terms of its share price — AFC Energy (LSE: AFC) has five-bagged in just a couple of months! Bear in mind, though, that today’s 49p is still down on the heady heights the shares reached in 2010 before a slump set in. What’s behind the turnaround?

An agreement for a 50MW fuel cell development in South Korea in early March gave the shares a big boost, which the firm told us “confirms AFC Energy’s transition from research and development to a global energy company“. AFC will hold 40% of the joint venture, which is expected to generate revenue of $1bn over 10 years. Then came news of a 10MW development in Thailand, followed by a 300MW project in Dubai!

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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.