Altura Mining Limited

Altura Mining Limited (ASX: AJM) with a market cap of $382.28m operates its world-class project, Altura Lithium Project, located at Pilgangoora in the Pilbara region of Western Australia. Commencement of mining at the site took place in May 2017. From May 2017 till date the progress towards the development of the project right from the breaking of the ground to the production and shipment has laid decent foundation for AJM growth and can deliver strong returns over the coming years while the stock was under pressure since beginning of 2018 with lithium sector volatility.

Binding Offtake Agreement with GFL:AJM has announced a Binding Offtake Agreement with a subsidiary of Ganfeng Lithium and the pre-payment from GFL for 2019 shipments will provide funding relief. This will also provide a strong set of diversified customer base and will lock production from the Altura Lithium Operation located at Pilgangoora. GFL being the global leader in the production of battery materials, will continue its expansion for both lithium carbonate and lithium hydroxide production capacity. This new binding agreement will increase the supplier base of GFL that will provide an option to increase the supply through its access to 50% of stage2 expansion production from Altura Lithium production facility. The offtake is for a minimum of 70,000 dmt per annum out to December 2021, with an option to extend for five years.

Fundamentally, the group has to improve on its financial performance that tethers on operational and production success. AJM reported that the group net operating loss grew from $6,165,006 in FY17 to $12,816,965 in FY18. The loss was mainly attributed to the net foreign exchange loss and the administrative and the corporate cost paid by the group. ROE also changed from -15.1% in FY17 to -17.1% in FY18, and Debt to equity ratio increased to 1.57 in FY18 from 0.28 in FY17. With Lithium project under construction phase, the non-current assets were recorded significantly higher in 2018.Refinancing of AJM’s US$125m high interest debt facility looks to be under focus.
Technically, the scrip after making 52 week high in the month of January at the levels of $0.50 has remained in downtrend. On a 3-month chart with daily candle interval, the closing price has remained below the 50-day EMA (Exponential moving average). In the current month, the scrip has shown some upside move but there still prevails some weakness.
Altura with its agreement with the existing offtake partner, JRO (J&R Optimum Energy) will get more flexibility after the restructuring of JRO and expansion of customer base. The new offtake replaces the existing offtake with Shaanxi J&R Optimum Energy Co. to some extent and JRO’s minimum offtake has been reduced from 100,000dmt to 50,000dmt. The BOA with GFL along with agreement with JRO will help AJM and mitigate the prevailing uncertainty to some extent, and thus, we give a “Hold” on AJM at the current price levels of $0.21.

ANTIPA MINERALS LIMITED

Antipa Minerals Limited (ASX: AZY) with a market cap of $43.33m, owns 5795 km2 of tenements in the Paterson Province of Western Australia, and this tenement also includes a 1,335km2 package of prospective granted tenements known as the Citadel Project. AZY has an additional 1,310km2 of granted exploration licenses, known as the North Telfer Project which hosts the high-grade gold-copper Minyari and WACA Mineral Resources.

Positive drilling updates  confirm the potentiality of the area:The recent updates on drilling operations conducted at Minyari Dome and Chicken Ranch have been provided on November 15, 2018. AZY has completed RC programme at Chicken ranch, and the results along with the high grade-drill intersections confirmed the high grade potential of the area which is located just 25kms south of its existing Minyari Dome Mineral Resources.

The group has now commenced an airborne electromagnetic (“AEM”) survey at the Citadel Project under the $60M farm?in by Rio Tinto Exploration Pty Limited. This has boosted the stock.

Fundamentals show some weakness in financials reported under FY18:Revenuedropped from $289,601 in FY17 to $57,810 in FY18. Net cash (outflow) from operating activities increased to $1,393,347 in FY18 from $833,274 in FY17. As at 30 September 2018, the Company held cash of $5.23 million. Meanwhile, ROE also reported a drop and cash and cash equivalents at the end of the year reported were at $7,973,984 against $6,051,389 in FY17.

Technically,the scrip has overall downtrend, but in the current month of November, it has shown good upside move and has made new 52 week high at the levels of $0.033 on November 11, 2018. On a 3-month chart with daily candle interval, the closing price for the month of November has remained above the 50-day EMA (Exponential moving average). Relative strength index indicates some more upside.

AZY has a market cap of $43.33m and beta in negative zone. Weaker financials while drilling updates have been positive indicate for a watch signal while the stock traded at the current price levels of $0.026, up 8.33% on November 20, 2018.