South Harz Potash Limited (ASX: SHP)

Formerly known as Davenport Resources Ltd, SHP was incorporated in 2011. It deals in potash mining projects involving three perpetual licenses Ohmgebirge, Ebelebenand Muhlhausen-Nohra, and two exploration licenses, Kullstedt and Grafentonna, in the South Harz Potash District in north-western Thuringia, central Germany. Its market capitalization stood at AUD 68.78 million as of 12^th November 2021.

Financial and Operational Updates: As per the Quarterly Report released on 29^th October 2021, permit of drilling of first two planned holes was allotted at the flagship Ohmgebirge Mining License Area, of which 2^nd hole drilling is expected to be completed in mid-Q1 CY22. Its sales receipts for 1QFY22 were reported as nil and cash balance at the end of 30^th September 2021 was reported at ~AUD 7.63 million versus ~AUD 8.24 million at the end of 30^th June 2021. It is worth to mention that the company had nil debt as of 30^th September 2021. As per the Annual Report released on 29^th October 2021, its Total Comprehensive Losses after tax increased from ~AUD 1.90 million for FY20 to ~AUD 2.27 million in FY21. A scoping study for Ohmgebirge was launched and it is expected to be completed by the end of 1Q CY22.

Technical Analysis: SHP’s stock prices are trading above trading above 21-period SMA and 50-period and continuously taking support at AUD 0.130 on the weekly chart. Moreover, the momentum oscillator RSI (14-period) is gaining momentum and trading at ~71.123 levels, indicating bullish momentum. Prices which may act as a crucial support and resistance levels are placed at AUD 0.140 while the key resistance level is placed at AUD 0.180, respectively.

Along with the recent licences and permits granted and expected bullish momentum in the price levels, it is prudent suggest the investors with a high-risk appetite a ‘Speculative Buy’ stance along with incorporating the support and resistance as one of the tools while analysing the investment opportunity. The stock was analysed as per the current market price of AUD 0.155 per share, as of 12^th November 2021, 11:47AM (GMT+10), Sydney, Eastern Australia. However, the risk levels are extremely high in view of the prospective findings, its development and related saleability.

Weekly Technical Chart – SHP

Source: REFINITIV

Geopacific Resource Limited (ASX: GPR)

GPR was founded in 1986 which is involved in gold-copper development having portfolio assets located mainly in Asia-Pacific. Its main projects include Woodlark Gold Project and Kou Sa Copper/Gold project. Its market capitalization stood at AUD 124.61 million as of 12^th November 2021.

Financial and Operational Updates: As per the Announcement on 11^th November 2021 a delay has been expected till Q1/Q2 CY22 at the Woodlark Gold Project due to spreading of COVID-19 near Papua New Guinea and deterioration of ground conditions because of unseasonal inclement weather. On 29^th October 2021, Spheria Asset Management Pty Ltd reduced its shareholding from 11.18% to 10.11%. Its sales receipts for 3QFY22 were reported as nil and cash balance at the end of 30^th September 2021 was reported at ~AUD 238.910 million versus ~AUD 255.944 million at the end of 30^th June 2021. As per the Half Yearly Report released on 10^th September 2021, the net losses after tax reduced to ~AUD 2.887 million for 1HFY21 as against ~AUD 3.753 million in 1HFY20. 

Technical Analysis: GPR stock prices are trading above the horizontal trend line support zone at AUD 0.205 on the weekly chart. Moreover, the momentum oscillator RSI (14-period) is trading in an oversold zone at ~29.59 levels, which indicates the possibility of rebound in the stock from the current levels. However, prices are trading below 21-period SMA and 50-period which may act as a crucial resistance level for the stock. An important support level for the stock, is placed at AUD 0.205 while the key resistance level is placed at AUD 0.26.

It is wise to suggest A ‘Watch’ stance, after considering its RSI trading in oversold zone and nil cash receipts from customers. The stock was analysed as per the closing price of AUD 0.230 per share, down by ~4.167% as of 12^th November 2021.

Weekly Technical Chart – GPR

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 reflects the Trendline, which shows whether the direction of the scrip is upwards or downwards.

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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.