Northern Minerals Limited (ASX: NTU)

Incorporated in 2006, NTU is involved in mineral exploration and development, mainly rare earth elements. Its projects are Browns Range Project, John Galt Project, and Boulder Ridge. It holds a market capitalization of ~$252.76 million.

H1FY22 Financial Update: During the period, NTU reported a net loss of $13.18 million (FY20: $5.59 million), primarily driven by increased exploration activities and commencement of feasibility study for a complete beneficiation plant. Total revenue and other income slipped; however, a $2.38 million contribution was made from rare earth concentrate sales. Research and development refundable tax decreased from $5.03 million in FY20 to $2.98 million. The company’s cash outflows from operating activities stood at $8.78 million. Key inflows include the receipt of outstanding R&D rebates of $4.33 million.

Technical Analysis: NTU prices were consolidating in a range between AUD 0.049 and AUD 0.053 from past 2 months. However, prices are now getting upside momentum with moderate volumes that is supportive for the stock price. RSI (14-period) is hovering at ~59.78 level that indicates bullish price momentum for the stock. Prices are also trading above its 21-period SMA that is also support our bullish stance. Immediate support levels are AUD 0.049 and AUD 0.047 while immediate resistance levels are AUD 0.056 and AUD 0.063.

Considering the current technical levels, investors with a high-risk appetite might consider a ‘Speculative Buy’ position. The stock was analysed as per the current price of AUD 0.053, 10:30 AM (GMT+10), Sydney, Eastern Australia as of 18^th March 2022. However, the risk levels are high considering exploration delays and dearth in budget following the quantitative tightening by the government. 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. 

NTU Daily Technical Chart, Data Source: REFINITIV 

Auroch Minerals Limited (ASX: AOU)

AOU is an Australia-based company engaged in exploring and developing mineral properties covering copper, cobalt, nickel, gold, zinc, and lithium ores. The company holds a 100% stake in Arden, Bonaventura, and Torrens East Copper projects, located in South Australia.

H1FY22 Financial Update: The total comprehensive loss for the period stood at $882,034 relative to $873,182 in FY20. Cash and cash equivalents surged to $9.17 million as of 31 December 2021, relative to $3.07 million as of 30 June 2021. The company completed an equity placement for $8 million via the issue of 50 million fully paid ordinary shares at the cost of $0.160/share. During the period, the company claimed $727k in cash via the exercise of 7.27 million unlisted $0.10 options. In the recent developments, its drilling at Saints Nickel project showed high grade of nickel sulphate.

Technical Analysis: AOU prices are trading in a primary bearish trend. Prices are currently trading in a short consolidation range between AUD 0.100 and AUD 0.135 with no clear sign of future price direction. RSI (14-period) is trading at moderate zone i.e. ~49.46 level that indicates indecision in the stock. Immediate support levels are AUD 0.100 and AUD 0.085 while immediate resistance levels are AUD 0.122 and AUD 0.135.

After considering the widening of losses and directionless movement of stock, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.1150 per share, as of 18^th March 2022.

Investors can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.

AOU Daily Technical Chart, Data 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 analysis has been achieved and is subject to the factors discussed above alongside support levels provided.

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.

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

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