Metals X Limited

Decent Financials: Metals X Limited (ASX: MLX) has an engagement in operation of tin and copper mines in Australia; and exploration and development of base metals projects in Australia. The company recently announced a change in its interest in the company named Nelson Resources Limited (Formerly, Mongolian Resource Corporation Limited) where its voting power reduced from earlier 11.26% to 9.94%. MLX announced about Renison (50% owned by MLX) resource update. It reported an increase in the contained tin (Sn) in mineral resource by 22% to 263,000 tonnes. The total Mineral Resource grade increased by 14.5% to 1.50% Sn from 1.31% Sn.

March’19 Quarter Key Highlights: The Company reported closing cash and working capital of $74.3 Mn, as compared to $74.7 Mn at the end of the previous quarter. It shipped 3,890 tonnes of contained copper with a value of ~ $31 Mn, with a commencement date of March 31, 2019 and dispatch date of April 2, 2019. It initiated various company-wide business improvement program, which can be reflected from the Nifty quarterly cash costs.

MLX reported record production of 2,061 tonnes of Tin contained in concentrate at an All-In Sustaining Costs (AISC) of $15,701 per tonne of tin, as compared to the production of 1,798 tonnes at $17,436 per tonne in the previous quarter. Its Tin division EBITDA and net cash flow were reported at $12.9 Mn and $10.1 Mn, as compared to $8.1 Mn and $5.2 Mn, respectively, in the previous quarter.

The Company reported production of 3,985 tonnes Copper contained in concentrate, as compared to 5,177 tonnes in the previous quarter. Its Copper division EBITDA was reported at ($5.2) Mn as compared to ($6.2) Mn in the previous quarter, which reflects reduced cost base.


H1FY19 P&L Statement (Source: Company Reports)

H1FY19 Financial Performance: Revenue from ordinary activities increased by 13% pcp to $92.51 Mn. Net loss from ordinary activities after tax attributable to members increased by 96% pcp to $36.15 Mn.

Stock Recommendation: MLX’s current ratio for H1FY19 stands at 2.57x, which is better than the industry median of 1.87x, which implies the company is in a better position to address its short-term obligations than its peer group. Its debt-equity ratio for H1FY19 stands at 0.06x, which is lower than the industry median of 0.11x. Moreover, its EV/Sales and PB multiple for TTM stands at 0.6x and 0.9x, respectively. It is presently trading close to its 52 weeks low levels of $0.205.Hence, considering the aforesaid facts and current trading level, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.250 per share (up 2.041% on June 20, 2019).
 

Great Boulder Resources Limited

GBR Appoints Mr. Andrew PatersonAs New Managing Director: Great Boulder Resources Limited (ASX: GBR) recently announced confirmation of release of 500,000 Ordinary fully paid shares (securities) from voluntary escrow on June 12, 2019, which were previously issued in March 2019 as part of the Joint Venture agreement with Ausgold over the Winchester Project.

In another update, GBR announced the acceptance of the position of Managing Director of the Company by Mr Andrew Paterson who has more than 25 years’ experience in mining and exploration in Australia and PNG. His role will become effective from June 24, 2019.

March’19 Quarter Key Highlights: In its Yamarna Project (Mt Venn- Eastern Mafic), EIS co-funded RC and diamond drilling finished at the Eastern Mafic. It targets nickel mineralisation related to the feeder zoneto the Eastern Mafic complex. In Winchester, GRB formally executed a JV agreement with Ausgold over the Winchester project which is located 40 kilometre north of company’s Yamarna project.
 
 
H1FY19 P&L Statement (Source: Company Reports)

H1FY19 Financial Performance: The company reported loss from continuing operations for the period at $494,542, as compared to loss of $376,979 in H1FY18. It was majorly due to an increase in project evaluation expenses and share based payments.

Stock Recommendation:Great Boulder’s share generated negative YTD return of 60.00%. Its current ratio for H1FY19 stands at 16.99x, which is better than the industry median of 1.87x, which implies the company is in a better position to address its short-term obligations than its peer group. On the valuation front, its EV/Sales and PB multiple for TTM stands at 66.7x and 0.6x, which are lower than the industry median of 165.7x and 1.4x, respectively. It is presently trading close to its 52 weeks low levels. Hence, considering the aforesaid facts and current trading level, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.052 per share (down 7.143% on June 20, 2019).

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