Greenland Minerals Limited (ASX: GGG)

GGG owns uranium and rare earth mining projects in Australia. It currently develops the Kvanefjeld rare earth project located in the southwest of Greenland. GGG was ASX listed on 20^th June 2006. It holds a market capitalization of AUD 112.90 million as of 6^th January 2022.

Financial and Operational Updates: On 16th December 2021, the stock of GGG was put on a trading halt following the clarification on a ban of exploitation license related to the development of its Kvanefjeld project in Greenland. Under the new Greenland Parliament law, the company’s existing exploitation license would not be granted. Henceforth, it has to comply with adhering to less than 100ppm uranium threshold limit to apply for a fresh license towards the development of the Kvanefjeld project. In view of radiation hazards, the government is imposing a ban on licenses to uranium projects with over 100ppm. GGG is currently looking to negotiate with the government and appointed Clifford Chance as its legal adviser.

Under the newly appointed Managing Director Daniel Mamadou, GGG is considering new opportunities in technology metals and minerals. It had a cash balance of over A$31.6 million as of September 30, 2021, to support the growth plans. As per the quarterly cash flow report, it had nil revenues for the nine months year-to-date ending September 30, 2021 and posted operating cash outflows of A$1.50 million.

Technical Analysis: After a major crash in November 2021, GGG price are consolidating in a range between AUD 0.077 and AUD 0.088 levels. Prices recently trading near to its long term downward sloping trend line, but still there is no breakout signal yet. RSI (14-period) is hovering at ~52 level further indicating indecision in the stock. Prices are trading below to its 50-period SMA that also suggests that the prices are trading in a bearish trend. Immediate resistance levels are AUD 0.095 and AUD 0.103, while immediate support levels are AUD 0.077 and AUD 0.069.

 Considering the recent legal pronouncement on licence ban at its uranium project in Greenland and its serious implications on the strategic direction, and nil revenue-generating assets, investing in this stock at such uncertain levels should be taken with a calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.088 per share, up ~4.76% as of 6^th January 2022.

Daily Technical Chart – GGG

Source: REFINITIV

Norwest Energy NL (ASX: NWE)

NWE is an oil and gas exploration company involved in the development of petroleum resources in Perth Basin, Western Australia. It holds exploration permits in Western Australia that includes EP368 & EP426, TP/15 and EP413. NWE was ASX listed on 19^th September 1997. It holds a market capitalization of AUD 147.40 million as of 6^th January 2022.

Financial and Operational Updates: On 6^th January 2022, the company provided an update on cementing operations at the Lockyer Deep-1 conventional gas discovery well. The company is on track to perform testing operations. It is expected to commence testing before the end of February 2022. In the earlier announcement, the Lockyer Deep-1 exploration well has confirmed significant conventional gas discovery. The appraisal plan is slated to commence in CY2022, and development drilling and FEED & FID at four wells are targeted to complete by 2023.

On 26^th November 2021, NWE issued about 191 million fully paid ordinary shares related to unlisted options at an exercise price of AUD 0.0341. As per the quarterly report, the company is preparing for 2D and 3D seismic campaigns across Lockyer Deep and adjacent wells. On August 30, 2021, it had raised A$2.75 million via share placement with sophisticated and professional investors. As of September 30, 2021, NWE had a cash balance of A$6.04 million. In addition, the exercise of listed options upon the expiry on January 24, 2022 will increase liquidity by A$3.84 million.

Technical Analysis: NWE prices are currently hovering in a range between AUD 0.027 and AUD 0.021 from past 12 weeks further indicating no clear price direction. RSI (14-period) is trading at ~61.76 that indicates that the prices are trading in a positive momentum. Immediate support levels are AUD 0.023 and AUD 0.021, while immediate resistance levels are AUD 0.027 and AUD 0.030.

 Considering the nil receipts from customers, ongoing cash outflows towards the development of natural gas projects, and current trading levels, investing in this stock at such uncertain levels should be taken with a calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.026 per share as of 6^th January 2022.

Daily Technical Chart – NWE

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Yellow colour line represents the Trendline.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

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