Matsa Resources Limited

MAT Details

Positive Results from the Lake Rebecca Project: Matsa Resources Limited (ASX: MAT) is engaged in the exploration of gold and other base metals. The market capitalisation of the company as on 26 February 2021, stood at ~$25.75 million. As per a recent update, the company has announced positive assay results from the first aircore drilling program at the Lake Rebecca project, a JV between Bulletin Resources Limited (80%) and Matsa Resources Limited (20%). The aircore drilling has identified several new mineralised gold zones that are having gold tenor and extent to the >0.1 g/t. This discovery provides the JV with an optimistic outlook and encouragement to find additional gold deposits.

Activity Report for the Quarter Ended 31 December 2020: During the quarter, Red October Gold Mine updated JORC 2012 underground resource at 173,000 oz gold @5.8g/t, compared to the previously reported resource of 82,000 oz gold @ 13.2g/t. The company mined higher grade ore during the quarter, but the overall tonnes mined were adversely impacted because of ongoing exploration and development work. In the Devon pit, RC drilling confirmed the presence of high-grade gold mineralisation. The cash outflow from operations during the quarter stood at $2.82 million.

Q2FY21 Cash Flow Performance (Source: Company Reports)

Outlook: The company plans to build on the existing 515,000 oz of gold resource, going forward. It has 2 current mining projects in Red October and Fortitude and is making rapid progress on its third project –Devon. It has 503 sq. km. rich tenement package in the Laverton belt.

Stock Recommendation: The company, along with its JV partner Bulletin Resources Limited, have been issued 10,750,000 shares of Apollo Consolidated Limited for the sale of a 400m wide strip of the Lake Rebecca Gold project. The company reported an increase in the cash cycle to 131.4 days in FY20 from 19.1 days in FY19. As per ASX, the stock of MAT is trading below its average 52-weeks’ levels of $0.074-$0.185. The stock of MAT gave a negative return of ~23.33% in the past three months and a negative return of ~38.66% in the past six months. On a technical analysis front, the stock of MAT has a support level of ~$0.083 and a resistance level of ~$0.105. Considering the current trading levels, negative price performance in the past few months, increase in cash cycle days and in the absence of continued revenue streams, we give an 'Avoid' rating on the stock at the current market price of $0.092, down by 3.158% as on 26 February 2021.

MAT Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Platina Resources Limited

PGM Details

Business Update: Platina Resources Limited (ASX: PGM) is engaged in the exploration, development and acquisition of mineral deposits, as well as precious metals. The market capitalisation of the company as on 26 February 2021, stood at ~$20.56 million. As per a recent update, the Supreme Court has delivered its judgement regarding proceedings against Artem Resources Limited and its subsidiaries Karratha and Munni. PGM brought the proceedings as it considered the given companies breached the terms of the contract. The Court has observed that it was not able to find the breach of the Heads of Agreement by the related parties, but accepted Platina’s application for declaratory relief.

December 2020 Quarterly Activities Report: During the quarter, the company completed the sale of the Skaergaard project in Greenland to Canada’s Major Precious Metals Corp. Platina received CAD 0.5 million cash and 55 million Major shares, which represents $19.1 million in value for Platina shareholders. PGM also started its exploration activities in the Challa Gold Project, during the period. The net cash used in operations during the period was at $427,000.

Q2FY21 Cash Flow Performance (Source: Company Reports)

Outlook: The company expects robust prices and strategic focus towards precious metals, going forward. It has acquired the Challa gold project in Western Australia, and additional gold M&A opportunities are being assessed.

Stock Recommendation:  The company will look to unlock value in the Scandium Project, as the demand for high strength alloy for EV’s increases. As per ASX, the stock of PGM is trading above its average 52-weeks’ levels of $0.010-$0.082. The stock of PGM gave a positive return of ~2.17% in the past three months and a negative return of ~21.66% in the past one month. On a technical analysis front, the stock of PGM has a support level of ~$0.041 and a resistance level of ~$0.054. Considering the current trading levels, absence of revenue generation and negative profitability, we suggest an 'Avoid' rating on the stock at the current market price of $0.047, down by 4.082 % as on 26 February 2021.

PGM Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Note: Platina Resources Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

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