Venturex Resources Ltd

Venturex raises $3.65 million in Institutional placement, dilutes equity: Venturex Resources Ltd (ASX: VXR) recently made an institutional placement of approximately 16.6 million shares raising $3.65 million at an issue price of 22 cents per share.Also, Northern Star Resources would convert the remaining one million of the loan to the company, increasing their shareholding to ~ 19.88 percent. The funds raised would be used to progress the sulphur springs project implementation plan, undertake new drilling program and to meet its working capital needs.

The company recently issued its consolidated interim financial report for the half year ended 31 December 2018. It reported total revenue of $855,903 in 1HFY19 vs. a total revenue of $115,440 in 1HFY18. The revenue increase was aided by other income of $850,000 in 1HFY19 vs. $5,888 in 1HFY18.  The total loss after income tax attributable to the owners of the company came in at $949,511 vs. loss of $1,028,901 in 1HFY18.

The company’s cash and cash equivalents at the end of the half year was at $2,512,687 as compared to $2,622,074 at the end of June 2018.


Consolidated Profit and loss statement (Source: Company Report)

The stock has delivered a YTD return of 41.18% while in the past one year, the stock has moved up by 14.29 percent. The company has reduced its cash reserves, has a cash conversion cycle of 375 days in FY18 vs industry median of 46.4 days and the company is diluting its shares.

The stock is currently trading close to its 52-week high, hence, we give an “Expensive” recommendation on the stock at the current market price of A$0.240 per share (up 4.348% on 22 March 2019).
 

Hot Chili Ltd

HCH reports one of the most significant sets of copper-gold porphyry discovery: Hot Chili Limited (ASX: HCH) recently published its half yearly report. The company reported a loss from continuing operations for the half-year after providing for tax at $589,253 in 1HFY19 vs. $3,098,961 in the same period of the previous year.


Statement of Profit or loss (Source: Company Reports)

On the operational front, the company highlighted that it has secured an option to acquire 100% interest in a major, privately-owned, copper-gold porphyry discovery, named Cortadera which is adjoining the company’s Productora and El Fuego copper projects, located on the Chilean coastal range.This is an important development for the company as it has potential to provide immediate critical mass required to develop a substantial copper mine. This project could potentially transform Hot Chili into a premier ASX listed copper developer. 

As a validation to this claim, the Cortadera’s results are considered as one of the most significant sets of copper-gold porphyry discovery drilling intersections since the discovery of SolGold’s Cascabel deposit in Ecuador. Project level funding discussions are reportedly advancing with key stakeholders, and technical due diligence with potential funding partners is underway.

Meanwhile, the stock price has delivered a return of 19.48% in the past six months. Interestingly, the shares have moved up by 150.90% in the past 3 months which hints that the stock is volatile. Therefore, we have a watch stance on the stock at the current market price of A$0.023 per share (down 11.538% on 22 March 2019).
 

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