AVZ Minerals Limited

AVZ Details

Agreement with Congolese Government: AVZ Minerals Limited (ASX: AVZ) is engaged in mining and exploration activity and offers full-fledged mining operations in Manono, Democratic Republic of Congo. On 19 February 2020, the company has informed about its collaboration with the Congolese Government regarding the Memorandum of Understanding to establish a Special Economic Zone in Manono, Tanganyika Province, DRC. The Special Economic Zone is poised to seek economic benefits for the development and profitability of the Manono Lithium and Tin Project, including exemptions on corporate taxation and duty taxes.

Recently, the company updated regarding the Roche Dure JORC Resource, wherein the company reported 400 million tonnes of minerals, wherein 107 million tonnes is measured, 162 million tonnes has been indicated and 131 million tonnes has been inferred.


Operational Update (Source: Company Reports)

Updates from the Manono Lithium & Tin Project: The business owns 65% stake in the project, containing 6 known pegmatites spread out across a gross strike length of 13.5km on PR13359. As per the recent update, Phase 1 metallurgical test work was executed on 5 complete PQ sized core holes within the area designated at a JORC Measured Resource category. The company also reported 85% completion of its Phase 2 test work in progress.

Cash Flow Updates as on 31 December 2019: For the six-months, the company reported net cash used in operating activities of $5.89 million, including $4.72 million used for exploration and evaluation, and administrative and corporate costs of $0.80 million. The company reported net cash used in investing activities at $0.781 million. Net cash used in financing stood at $0.043 million followed by cash and cash equivalents of $2.164 million as on 31^st December 2019.

Stock Recommendation: The stock of AVZ is trading at $0.088 with a market capitalisation of ~$216.77 million. The stock is trading towards the upper band of its 52-week trading range of $0.038 to $0.105.

The company is looking for its major step forward for the Manono Lithium and Tin Project and the business intends to convert into a full-fledged mining company. The stock has generated exuberant returns of ~123% and ~80.77%, respectively in the last three months and six-months, respectively. The stock is quoting at a price to book value multiple of 3.3x on its trailing twelve months (TTM) basis, as compared the industry median (Basic Material) of 1.6x.  Considering the current trading levels, price movement and valuation, we are of a view that most of the positives are factored in at the current levels and the stock might see a correction. Hence, we recommend a “Sell” rating on the stock at the current market price of $0.088 per share, down 6.383% on 19 February 2020.

 
AVZ Daily Technical Chart (Source: Thomson Reuters)
 

Galan Lithium Limited

GLN Details

Confirmed Drilling of High-Grade Lithium at Pata Pila: Galan Lithium Limited (ASX: GLN) is engaged in the exploration activities for lithium and other metals. Recently, the company informed about the appointment of Mr Richard Homsany as the interim Non-Executive Chairman, following the retirement of Mr Nathan McMahon.

Cash Flow Highlights for the Period ended 31 December 2019: GLN announced its half yearly cash flow highlights, wherein the company reported net cash used in operating activities of $4.443 million, while net cash used in investing activities stood at $0.002 million. The company reported exploration & evaluation costs of $3.659 million during the period. Net cash from financing activities stood at $2.483 million and cash and cash equivalents as on 31 December 2019 stood at $0.876 million.


Cash Flow highlights for the Period ended 31 December 2019 (Source: Company Reports)

Quarterly Highlights for the Period ended 31 December 2019: The company reported high grades of >900 mg/l Li confirmed from drilling at Pata Pila. The company expects to provide Maiden Resource estimate for the Western Tenements by Q1FY20. At Rana de Sal a, the company reported a 72-hour air lift test sample that returned 1,010 mg/l Li over a >330m interval confirming outstanding grade average for drillhole RS-01-19.

Stock Recommendation: The stock of GLN is tradingat $0.250 with a market capitalisation of ~$36.65 million. The stock has generated solid returns of 35.29% and 43.75%, respectively in the last three months and six-months, respectively. The stock is available at a price to book value of 2.2x on TTM basis, as compared to the industry median (Basic Materials) of 1.6x. During the December quarter, the company successfully completed its drilling campaign at Pata Pila and Rana de Sal and focused on the commencement of scoping studies for Candelas. Considering the price movement and valuation, we are of the view that most of the positives are discounted at the current juncture and the stock might see a correction. Hence, we recommend a “Sell” rating on the stock at the current market price of $0.250 per share, up 8.696% on 19 February 2020. 

 
GLN 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.