Toro Energy Limited (ASX: TOE)

TOE is a uranium exploration company with its flagship Wiluna Uranium Project located in Western Australia.  Besides uranium, TOE holds exploration interest in Namibia, Africa, and investment in Strateco Resources in Quebec, Canada. TOE holds a market capitalization of $89.63 million as of March 15, 2022.

Financial and Operational Updates: On March 2, 2022, TOE commenced a diamond drilling campaign at its 100% owned Dusty Nickel project located in Yandal Greenstone Belt. During the quarter ending December 31, 2021, TOE successfully integrated Vanadium resources into the Lake Maitland uranium project which results in an updated mineral resource estimate of 14Mlbs of V2O2 along with the 26.4Mlbs of U3O8 estimated already at a 200ppm U3O8 cut-off at the Lake Maitland. The company hired SRK Consulting to re-optimize the proposed Lake Maitland mine based on the new data sets. At the Yandal Gold project, the company is conducting sampling of rock chips and analysing the mapping results. With nil revenues, the company posted operating cash outflows of $311k in Q2FY22. It had closed the period with a cash balance of $4.03 million as of December 31, 2021.  

For the full-year FY21, TOE posted a net loss of $6.51 million owing to impairment of its fixed asset offsetting gains on fair value changes. The company had an adequate cash balance of $10.38 million (~33% of total assets) and a positive net worth of $20.31 million as of June 30, 2021.

Technical Analysis: TOE prices broke the downward sloping trend line by upside on 10th March 2022 and since then prices are trading above its trend line breakout level that indicates the stock is trading in a short-term bullish trend. Prices have recently come down to its downward sloping trend line support level from where fresh buying might initiate. RSI (14-period) is hovering at ~51.30 on a daily chart that indicates bullish price momentum for the stock. Immediate support levels are AUD 0.018 and AUD 0.016 while immediate resistance levels are AUD 0.025 and AUD 0.028.

Considering the integration of Vanadium resources into the Lake Maitland and expected lift-up in mineral resource estimate for uranium, the commencement of diamond drilling at its nickel project, adequate cash balance, positive net worth despite losses, and current trading levels, investors with a high-risk appetite might consider a ‘Speculative Buy’ position. The stock was analysed as per the closing market price of AUD 0.020, down by ~13.04% as of March 15, 2022. However, the risk levels are high considering risk of the projects delays and ongoing Ukraine and Russia war, and its cascading effect on global uranium prices.

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.  

TOE Daily Technical Chart, Data Source: REFINITIV  

RooLife Group Ltd (ASX: RLG)

RLG operates as a digital marketing company. Through Artificial Intelligence, the company drives online sales and provides targeting marketing for its clients. It offers an online shopping platform to Chinese travellers. It also caters to Chinese payment processing services. RLG holds a market capitalization of $9.03 million as of March 15, 2022.

Recent Financial and Operational Highlights: As announced on March 15, 2021, RLG proposed to issue 7.2 million ordinary shares as part of a bonus issue to its employees, 20 million under unlisted performance options, and 14.33 million performance rights shares. It had appointed Novus Capital Limited for corporate advisory services in Australia and overseas.

On March 1, 2022, RLG realized cash receipts on its sale of wool garments into China for the first time. It had received $310k from the sale of Merino & Co. products in February 2022 and is expected to contribute to the strong sales in the March 2022 quarter. In H1FY22, RLG posted revenues of $8.10 million, an increase of 304% over PcP aided by the launch of new e-commerce stores in China and Southeast Asia and the opening of Pinduoduo fresh food store in China. Its losses narrowed to $865.3k in H1FY22 in comparison to a net loss of $1.48 million in PcP.

Technical Analysis: RLG prices are currently trading in a primary downward trend. Prices are also trading below its trend following indicators, 21-period and 50-period SMA on a daily chart that further showing weakness in the stock prices. RSI (14-period) is hovering at ~31.32 level on a daily chart that further indicating bearish price momentum. Immediate support levels are AUD 0.009 and 0.0065 while immediate resistance levels are AUD 0.0176 and AUD 0.020.

After considering the substantial exposure to China which is currently witnessing a spike in the Omicron virus strain, and continued losses, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.012 per share, as of 15^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.

RLG 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.

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 unless those persons comply with certain safeguards, procedures, and disclosures.

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.