Great Boulder Resources Limited
A Look at Rights Issue Offer:Great Boulder Resources Limited (ASX: GBR) is involved in mineral exploration with a primary focus on exploration for gold. It has a market capitalisation of ~A$3.8 Mn as on 20th September 2019. Recently, the company, through a release dated 19th September 2019 provided an update to market regarding its Western Australian gold and nickel projects, wherein it stated that after the recent acquisition of the Whiteheads gold project north of Kalgoorlie, it is now planning its first round of RC drilling on priority targets. It added that the program of work approvals have been lodged for Whiteheads. The company is intending to start drilling in the 2H of October with an initial 2,000m RC program. As per the release dated 18th September 2019, the company has dispatched the non-renounceable rights issue prospectus together with the accompanying personalised entitlement and acceptance form.
Under the rights issue prospectus, GBR is making a pro-rata offer of shares to eligible shareholders in order to raise around $1.3 Mn before costs. It added that the eligible shareholders would be entitled to apply for one new share for every three shares held on the record date, at an issue price of $0.04 per new share.GBR has also recently wrapped up the placement of 17,500,000 shares to sophisticated and professional investors, at an issue price of $0.04 per share, to raise $700,000. The primary purpose of the Rights Offer and the placement are to provide the company with funds for the conduct of exploration by the Company of tenements comprising the Whiteheads Gold Project, ongoing exploration of its Yamarna and Tarmoola projects as well as for working capital purposes. The following picture provides an indicative timetable for placement and rights issue:
Indicative Timetable (Source: Company Reports)
What to Expect:The company’s strategy revolves around establishing a substantial regional copper-nickel-cobalt operation via consolidation of prospective projects within trucking distance to the Yamarna Project.
Stock Recommendation:At the quarter ended 30th June 2019, the cash balance of the company stood at $0.66 Mn. The current ratio of the company stood at 16.99x in 1H FY19 as compared to the industry median of 1.88x. This implies that the company is in a better position to meet its short-term obligations as compared to the broader industry. As per ASX, the stock of GBR is trading closer to its 52-week lower levels. Hence, considering the above-stated facts and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.045 per share (up 18.421% on 20th September 2019 as the company announced an update on progress at its Western Australia gold and nickel projects, including the approval which has been lodged for priority targets at the recently acquired Whiteheads Gold Project.).
Kyckr Limited
Completion of the Placement:Kyckr Limited (ASX: KYK) is involved into the provisioning of corporate data with a market capitalisation of A$45.86 Mn as on 20th September 2019. Recently, the company with the help of a release dated 20th September 2019 announced that it has successfully wrapped up the placement amounting to A$5.2 Mn (before costs) via the issue of around 78.35 Mn new fully paid ordinary shares at a price of 6.6 cps to new and existing institutional and sophisticated investors. The Tranche 2 of the placement has resulted in the issuance of 46 Mn fully paid ordinary shares, by which KYK raised A$3.1 Mn and was approved by shareholders at the Extraordinary General Meeting held on 13 September 2019. The company further stated that capital raising led by prominent technology entrepreneur Mr Richard White, who participated in Tranche 1 and Tranche 2 of the placement. The company welcomed Richard as a cornerstone investor with a substantial holding of 19.6%. The funds raised will be used to accelerate the company’s commercialisation plans. The following picture depicts an overview of FY19 results:
Revenues from Ordinary Activities (Source: Company Reports)
Future Aspects:For FY20, the company will continue to focus on driving strategic partnerships, including with global data providers and credit bureaus, in addition to increasing online growth from the new Kyckr.com digital platform. It added that the enterprise business remains a key priority amongst current and prospective enterprise clients, and KYK has currently several partnership discussions underway with enterprise grade prospective customers. KYK would be strengthening its business development as well as account management capability in support of this priority.
Stock Recommendation:The company remained positive on its long-term outlook and focused on strengthening its offering across global customers and markets. As per ASX, the stock of KYK is trading closer to its 52-week higher levels. It can be said that KYK might witness some corrections moving forward. Therefore, we advise that investors should wait for better entry levels. As a result, we have a watch view on the stock at the current market price of A$0.240 per share (up 20% on 20th September 2019). It seems that the upside in the stock is primarily due to the completion of placement and as KYK welcomed WiseTech Global founder Richard White as a cornerstone investor with a substantial holding of 19.6%.
Alice Queen Limited
Trading Halt:Alice Queen Limited (ASX: AQX) is in mineral exploration and development of its projects at Horn Island, Queensland and in New South Wales. It has a market capitalisation of A$13.75 Mn as on 20th September 2019. As per the ASX release dated 20th September 2019, the securities of the company have been placed under a trading halt because of the request made by Alice Queen Limited, pending it releasing an announcement related to the capital raising. The securities of the company would remain in a trading halt until the earlier of the commencement of normal trading on 24th September 2019 or when the announcement is released to the market. As per the release dated 19th September 2019, the company advised the market on enhanced prospectivity of its North Molong Belt projects, EL8646 Yarindury and EL's 8565, 8469 Mendooran in light of a recent announcement by Alkane Resources Limited. It was outlined that Alkane's discovery hole, KSDD003 lies within 700m of Yarindury.
It added that the drilling of its existing Yarindury porphyry Cu Au targets would commence shortly. The following picture provides an idea of net cash used in operating activities for the quarter ended 30th June 2019:
Cash Flow Statement (Source: Company Reports)
Future Guidance:The ability of the company to continue as a going concern is dependent upon the company raising additional capital sufficient to meet its exploration commitments.
Stock Recommendation:The company added that, subsequent to the end of June quarter,the company raised $400,000 from investors (before costs) via a placement of 33,333,334 Mn new fully paid ordinary shares at $0.012 per share.The funds raised from the placement would be used to fund working capital requirements. As per ASX, the stock of AQX is trading closer to its 52-week higher levels of $0.030. Hence, we advise investors to closely watch the stock at the current market price of A$0.027 per share (up 42.105% on 20th September 2019) and wait for better entry levels.
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