Great Boulder Resources Limited

Two Large EM Anomalies Highlighted at Mt Carlon Project: Great Boulder Resources Limited (ASX: GBR) is a mineral exploration company with primary focus on exploration of gold. The market capitalisation of the company stood at $4.2 million as on 1^st October 2019.

Great Boulder Resources Limited has announced that an aerial electromagnetic (AEM) survey has highlighted two strong, large anomalies at its Mt Carlon Project in WA. Mt Carlon is 60km south of Great Boulder’s Mt Venn copper-nickel-cobalt project. The company has completed the acquisition of the project from Gold Road Resources (ASX: GOR) in August and has moved quickly to establish its exploration potential.

The two priority anomalies are the “Eastern Zone” anomaly and the “Western Zone” anomaly. The “Eastern Zone” anomaly is a 3.5km-long linear zone of IP (induced polarization) effect coincident with ultramafic rocks and a zone of elevated nickel identified in previous aircore drilling by Gold Road and the “Western Zone” anomaly is a 3.7km linear conductive zone coincident with a mapped banded iron (BIF) unit.


Anomaly Locations (Source: Company Reports)

Company Is Planning for The First Round of RC Drilling: The company has presented an update on progress at its Western Australian gold and nickel projects. After the recent acquisition of the Whiteheads gold project north of Kalgoorlie, the company is now planning its first round of RC drilling on priority targets. In addition to this, preparations are underway for the next round of drilling at Tarmoola while planning is continuing for further work at Winchester and Mt Carlon. Program of Work approvals has been lodged for Whiteheads. Great Boulder Resources Limited intends to commence drilling in the second half of October with an initial 2,000m RC program.

Key Highlights During FY19: Great Boulder Resources Limited maintained its tight capital structure, with 81.6 million ordinary shares on issue as at 30 June 2019 and no debt.Subsequent to end of the financial year (EOFY), the Company has completed a placement and is undertaking a 1:3 rights issue to raise a total of $2 million.

The company continued to progress its Copper-Nickel-Cobalt projects at Yamarna and Winchester, with additional RC and diamond drilling at Mt Venn, initial RC and diamond drilling at Eastern Mafic and a first-pass RC program at Winchester. In addition to this, the company tested gold targets at Tarmoola, and regional aircore programs at Tarmoola and Winchester which added to the knowledge of the stratigraphy and litho-geochemistry in both areas.

Stock Performance:On the stock’s performance front, it produced negative returns of 26.32% and 23.77% in the last one month and three months, respectively. Currently, the stock is trading near the 52 weeks low levels of $0.035, indicating a decent opportunity for accumulation. It is a debt-free company with an asset to equity ratio of 1.02x. Since the company has a debt-free position, it can be said that the company has a stable balance sheet, and it can focus on its long-term growth. Hence, in view of aforesaid parameters and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.050 per share (up 19.048% on 1^st October 2019, as the company announced thatan aerial electromagnetic (AEM) survey has highlighted two strong, large anomalies at its Mt Carlon project in Western Australia).
 

Gage Roads Brewing Company Limited

Highlights of FY19: Gage Roads Brewing Company Limited (ASX: GRB) is into the business of brewing of craft beer, lager beer, cider and other beverages. The market capitalisation of the company stood at ~$101.78 million as on 1^st October 2019. In FY19, the company reported a revenue from continuing activities of $39.7 million, up by 20%, which was primarily driven by growth in sales of higher-margin brands. In line with the company’s strategy, the own-brand portion of the total sales mix has grown from 39% in FY18 to 61% in FY19. This shift in sales mix towards their own brands has improved total gross profit from 61% in FY18 to 64% in FY19.

The combined proprietary sales and contract brewing volumes resulted in a total throughput of 13.2 million litres and generated an unaudited EBITDA of $5.5 million for FY19, an improvement of 25% over FY18. This result represents 46 cents EBITDA per underlying litre (total volume less brand-in-hand volume) and is up from 39 cents EBITDA per underlying litre in FY18.


 FY19 Highlights (Source: Company Reports)

Update on Matso’s Acquisition and Good Drinks: On September 20, 2018, the company acquired 100% of Matso’s Broome Brewing Pty Ltd. Since on-boarding the brands, the company has improved the growth in sales rates of Matso’s flagship product Matso’s Ginger Beer and have reversed the decline of Matso’s Mango Beer.Thecompany has also started a new and innovative brand, Matso’s Hard Lemon. The acquisition has delivered to date on its volumes and earnings expectations with Matso’s brands on track to achieve circa 2m litres on an annualised basis.

Outlook for FY20: Good Drinks brands growth and 5-year strategy is on track to deliver margin growth and earnings targets for FY20 and beyond.The company continues to explore potential acquisition targets and international opportunities.

Stock Performance:On the stock’s performance front, it produced negative returns of 5.15% and 2.13% in the last one month and three months, respectively. Currently, the stock is trading lower than the 52-week low high average of $0.087-$0.130, indicating a decent opportunity for accumulation. It is a debt-free company with an asset to equity ratio of 1.24x, and current ratio of 1.89x in FY19. The company’s revenue has grown at a CAGR of 12.95% between FY15- FY19. Hence, in view of aforesaid parameters and current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of $0.095 per share (up 3.261% on 1^st October 2019).

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