Minotaur Exploration Limited (Minotaur) (ASX: MEP)

MEP operates into mineralisation and evaluation of tenements, achieved through surface sampling, drilling, and geophysical surveys. Its projects are Pyramid Gold, Breena Plains Joint Venture (JV), Eloise project, Jericho project, and Great White project. The company’s market capitalization stood at AUD 107.82 million as of 1^st February 2022.

2QFY22 Financial Updates: As per its Quarterly Report released on 31^st December 2022, with the nil sales receipts in 2QFY22, it closed the quarter with a cash balance of ~AUD 2.29 million at the end of 30^th December 2021 versus ~AUD 4.24 million at the end of 30^th September 2021. The company incurred ~AUD 2.2 million as an exploration expenditure and ~AUD 439k towards operating cash outflows.

ADN’s Takeover Updates:

• As per the 10^th November 2021 initial release, ADN intended to acquire MEP with 1.15 new Andromeda shares offered for every one share of MEP. The offer values MEP at 20.8 cents per share representing:

• 59.8% premium to last close of MEP’s shares on 8^th November 2021 (last close prior to the announcement).
• 55.1% premium to 5-day VWAP

• 67.6% premium of 30-dat VWAP

• As at 31^st January 2022, a total of ~74.97% MEP’s shareholders have accepted Andromeda Metals Limited (ADN’s) takeover offer, subject to minimum of ~90% acceptance.
• The offer has been extended till 14^th February 2022.
• Another condition attached was the demerger of Demetallica from MEP, and it will prepare for its IPO (Initial Public Offering) anticipated in April 2022.

Technical Analysis: MEP stock prices are trading above its trend-following indicator 50-period SMA but still struggling to surpass 21-period SMA on a daily chart, which indicates an indecisive attitude on current price levels. Moreover, the momentum oscillator RSI (14-period) has also bounced back from the lower levels and currently trading in a mid-range at ~47.76 level, supporting the uncertainty. Immediate support levels for the stock are placed at AUD 0.185 while resistance level is at AUD 0.230.

Considering its demerger & takeover updates, technical analysis, and after comparing the current price levels with the offer price in ADN takeover offer (mentioned above), investing in this stock at such trading levels becomes risky and should be taken with a prudent strategy, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.205 per share, up by ~2.500%, as of 1^st February 2022.

Daily Technical Chart – MEP

Source: REFINITIV

Widgie Nickel Limited (ASX: WIN)

WIN is involved in mining, exploration and development of mineral deposits (nickel) in Western Australia. It operates Mt Edwards Project. The company’s market capitalization stood at AUD 72.53 million as of 1^st February 2022.

Financial and Operational Updates: As per its Quarterly Report released on 31st January 2022, its Maiden drilling program at Mt Edwards Project was started in December 2021 quarter as per the schedule. Its initial program is focussed on extension and infilling of mineralisation at Gillett Resource and the results are expected to come in March quarter 2022. A total of 10,437m Reverse Circulation Drilling in 69 holes have been completed so far. With the nil sales receipts in 2QFY22, it closed the quarter with a cash balance of ~AUD 22.16 million at the end of 30^th December 2021 versus ~AUD 23.04 million at the end of 30^th September 2021. As per its Annual Report 2020, it reported an increase in its net losses from ~AUD 22k in FY19 to ~AUD 51k in FY20.

Technical Analysis: As the stock is a novice on ASX platform and had started trading on 22^nd September 2021, it is difficult to analyse on its technical front.

Due to inability of interpretation of technical information due to insufficient data and its operations at novice levels, investing in this stock at such uncertain and premature levels should be taken with calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.34 per share, up by ~17.241%, as of 1^st February 2022.

Weekly Technical Chart – WIN

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.

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