Tribune Resources Limited

TBR Details

September Quarter ends with $62.41 million in Cash: Tribune Resources Limited (ASX: TBR) is engaged in the exploration, development and production activities at its East Kundana Joint Venture tenements.

Proceedings against Northern Star Resources: The company has recently come up with legal proceedings against related corporate entities of Northern Star Resources Limited with respect to some discrepancies pertaining to the 49% owned East Kundana Joint Venture Agreement. 

Proceedings have been filed against EKJV Management Pty Ltd, Northern Star (Kanowna) Pty Limited and Gilt-Edged Mining Pty Limited for committing breaches in relation to the joint venture agreement, which persuaded the company to take them to the Supreme Court of Western Australia. As per an announcement dated 23^rd December 2019, Northern Star Resources Limited stated that the proceedings brought forward were not material to the company. Tribune Resources will continue to provide the market with further updates on the above matter.

September Quarter Highlights: During the quarter ended 30 September 2019, the company processed 236,766 tonnes of EKJV ore at the Kanowna Plant. In addition, 30,454 tonnes of EKJV ore and 0 tonnes of R&T ore was processed at the Greenfields Mill.Rand and Tribune Bullion Accounts were credited with 25,016 ounces of gold and 3,550 ounces of silver, with Tribune’s share at 75%. Net cash from operating activities amounted to $2.43 million, with receipt from customers amounting to $34.78 million. Cash and cash equivalents at the end of the quarter amounted to ~$62.41 million. In the coming quarter the company expects cash outflows to be ~$35.40 million.


Forecasted Cash Outflows (Source: Company Reports)

Stock Recommendation: The stock of the company generated negative returns of 14.39% over a period of 1 month. Currently, the stock is trading below the average of its 52-weeks trading range of $3.661 - $8.800. The company is focused on exploration, development and production activities on its existing projects and intends to further acquire suitable projects for exploration. FY19 was a crucial year with respect to exploration at the EKJV project. The company will continue with in fill and extensional drilling at the prospect to test the extents of the Falcon trend. The stock has a price to cash flow multiple of 1.4x, lower than the industry median (Basic Materials) of 17.7x. Considering the aforesaid factors and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of $5.500, down 2.655% on 02 January 2020.

 
TBR Daily Technical Chart (Source: Thomson Reuters)
 

Bellevue Gold Limited

BGL Details

Significant Drilling Results from Deacon:Bellevue Gold Limited (ASX: BGL) is primarily engaged in the exploration activities in relation to the Bellevue Gold Project. The company recently reported significant drilling results along the 1,800 metres of defined strike at Deacon, with a focus on the previously untested DHEM plates within the mineralised shear corridor. As per the update, broad spaces step-up drilling at Deacon discovery delivered the following Gold results:

1. 2.3 m @ 39.0 g/t from 819 m in DRDD273

2. 3.0 m @ 10.4 g/t from 587.5 m in DRDD295

3. 0.8 m @ 69.2 g/t from 577.8 m in DRDD290

4. 3.0 m @ 12.0 g/t from 571 m in DRDD313

5. 1.1 m @ 22.2 g/t from 658.9 m in DRDD106 ext

Highlights of the Quarter Ended 30 September 2019: During the quarter, JORC Resource estimate with respect to the Bellevue Gold Project was upgraded to 1.8 MOZ @ 11.1 g/t gold inferred category, making it one of the fastest & highest-grade gold discoveries across the globe. On the financial front, the company strengthened its balance sheet through a fully underwritten institutional placement that raised ~$18.5 million, at a per share price of $0.57. At the end of the quarter, the company had a cash balance of $32.8 million, up from $19.8 million at the end of the previous quarter.
Outlook: Drilling at Bellevue is focused on de-risking the current inferred resources into the higher level indicated category. The company is also targeting new areas of strike extension aimed at growing the global Bellevue Resource in 2020. The company has begun early site works to establish the required infrastructure to dewater the Bellevue mine, starting from Q1FY20. Cash outflows for the December quarter have been estimated at $10.38 million.

Estimated Cash Outflows (Source: Company Reports)

Valuation Methodology: Price to Book Value Multiple Approach

Price to Book Based Valuation (Source: Thomson Reuters)

Note: All the forecasted figures are taken from Thomson Reuters, NTM: Next Twelve Months

Stock Recommendation: The stock of the company generated positive returns of 11.46% in the last one month. Currently, the stock is trading close to the average of its 52 weeks trading range of $0.390 - $0.735. The company has recently reported high-grade gold results from extensional drilling at Deacon and expects to grow the global Bellevue Resource in the New Year. Considering the recent drilling results, performance in the September quarter, strong cash position and current trading levels, we have valued the stock using Price to Book based relative valuation method and arrived a target price with lower double-digit upside (in % terms). Hence, we give a “Speculative Buy” rating on the stock at the current market price of $0.535 as on 02 January 2020.

 
BGL Daily Technical Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.