Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Catalyst Metals Limited (ASX: CYL) is an Australia-based company engaged in the mineral exploration, evaluation, and production of gold. The company’s projects include Whitelaw Gold Belt, Tandarra Gold Project, Raydarra Project, Four Eagles Project, Macorna Bore Project and Sebastian Project.

1.2 The Key Positives, Negatives, Investment Highlights, and Risks

1.3 Top 10 Shareholders: The top 10 shareholders together form ~56.92% of the total shareholding. St Barbara Ltd and Gold Exploration Victoria Pty. Ltd. hold a maximum stake in the company at ~12.89% and ~12.69%, respectively.

1.4 Key Metrics: CYL reported low cash cycle days, around 11.9 Days during FY22 compared to the industry median of 34.1 days. Further, the company had low leverage in FY22 as it reported a debt-to-equity ratio of 0.04x compared to the industry median of 0.19x. Below is captured the trend of the asset turnover and asset-to-equity ratio:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Updates:

2.2 Insights of 2QFY23: During 2QFY23, the company sold silver of around 6,373 oz at a realised price of AUD 34.0 per oz compared to 4,753 oz of silver at AUD 28.1 per oz during 1QFY23.   

2.3 Production Overview: The mining performance was improved by sustained improvement in the development rates. During 2QFY23, the mine grade improved to 4.0 g/t versus 3.3 g/t during 1QFY23.

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary:

The stock has witnessed a fall of ~0.37% in 3 months, and over the last 9 months, it has decreased by ~15.62%. The stock has a 52-week low and 52-week high of AUD 1.035 and AUD 2.000, respectively and is currently trading slightly below the average of a 52-week high-low average.

4.2 Stock Summary

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is February 21, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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