Encounter Resources Limited (ASX: ENR)

ENR is a mineral exploration and project generation company mainly having a focus in gold and copper deposits. Its projects include Lamil Project, Yeneena Project and IOCG project. The company was incorporated on 2004 and its market capitalization as of 5th October 2021 stood at $72.73 million and the share price stood at $0.225 per share.

Financial & Operational Updates – As per the Annual Report released on 30^th September 2021, total revenue was reported as ~$0.23 million in FY21 versus ~$0.13 million in FY20. The group reported an increase in Total Comprehensive Loss of ~$1.53 million for FY21, as compared to loss of ~$1.12 million in FY20. Cash at the end of FY21 was reported as ~$5.68 million as of 30^th June 2021 versus ~$1.86 million in PcP. On 17^th September 2021, the company announced demerger of West Tanami Gold Project through its 100% owned subsidiary Hamelin Gold along with the latter’s IPO prospects. On 6^th September 2021, it stated that diamond drilling program at Lamil was successful with a depth extensive stockwork corridor containing high grade copper mineralisation at its Dune prospect.

Technical Analysis: On the daily chart, ENR’s price is currently consolidating in a range between $0.22 and $0.24 from past several trading sessions. Stock is trading between the 21-period SMA and 50-period SMA further indicating indecision in the stock prices. The RSI (14-period) is hovering in a mid-range at ~51.546 level further indicating indecisiveness of the price actions. Immediate support level is $0.20 while immediate resistance found at $0.24.

After considering the company’s updates on its subsidiary’s demerger and Lamil Project, investing amid its volatile price levels should be monitored as per the support and resistance levels, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of $0.225 per share, down by ~2.174%, as of 5^th October 2021.

Daily Technical Chart – ENR

Source: REFINITIV

Venture Minerals Limited (ASX: VMS)

Incorporated in 2006, VMS is an Australian company engaged in mineral exploration, mainly in iron, tin, gold, nickel, copper PGE and zince. Its major projects are: Riley Iron Ore Mine, Mount Lindsay Project, Golden Grove Camp, Kulin Project, South West Project, and Caesar Project. Its market capitalization stood at $67.87 million as of 5th October 2021, at the stock price of $0.049 per share.

Financial & Operational Updates – As per the recent Annual Report released on 30^th September 2021, revenue from operations decreased from $14.49k in FY20 to $6.22k in FY21. The company had ~$9.48 million cash and cash equivalents at the end of FY21 versus ~$0.96 million in FY20. On the other hand, Total Comprehensive Loss of ~$2.20 million in FY20 has increased to ~$11.75 million in FY21. As per the announcement on 27^th September 2021, a successful intersection of 11m of sulphide rich skarn was found along with exploration drilling testing a priority Tin Target at Lindsay Tin-Tungsten Deposit. The company is intended to test ten drilling targets from the 48 EM anomalies delineated from airborne survey of 2019. On 17^th September 2021, VMS finished its commercial shipment of 45,632 tonnes with an average of 57.3% Fe from Riley Mine in Tasmania to China.

Technical Analysis: VMS prices are trading in a primary downward trend and prices are continuously falling after making a 52-week high of $0.16 in June 2021. On the daily chart, prices are trading below both 21-period SMA and 50-period SMA, which indicates no price reversal in near-term. The RSI (14-period) is hovering near oversold zone at ~31.992 level. An Immediate support levels are $0.045 and $0.043, while immediate resistance levels are $0.096 and $0.105.

Considering its non-satisfactory performance in FY21 and its current price levels running below its SMA levels, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing market price of $0.049 per share, as of 5^th October 2021.

Daily Technical Chart – VMS

Source: REFINITIV

Wildcat Resources Limited (ASX: WC8)

Incorporated in 2001, WC8 is engaged into exploration of gold and base metals. Its projects include Fraser Range Project, Mount Adrah Gold Project and Bolt Cutter Gold Project. As on 01^st October 2021, the market capitalization of the company stood at $17.07 million, and trading at $0.033 per share.

Financial & Operational Updates – As per the announcement on 30^th September 2021, 1,000m RC drilling started in Red Panda LCT Pegmatite. On 28^th September 2021, WC8 has entered into an option to acquire non-gold rights in a Lithium Project with Fairplay Gold Pty Ltd. As per the Annual Report released on 23^rd September 2021, revenue from interest income increased from $6.67k in FY20 to $9.87k in FY21. The company had ~$2.99 million cash and cash equivalents at the end of FY21 versus ~$5.35 million in FY20. On the other hand, Total Comprehensive Loss of ~$1.03 million in FY20 has decreased to a loss of ~$0.92 million in FY21. Tenement E45/E623 was granted to WC8 for its Bolt Cutter Project on 14^th September 2021. Three diamond holes at MT Adrah Gold Project tested into a source of 500m long, +95ppb Au soil anomaly on 8^th September 2021.

Technical Analysis: WC8 prices have witnessed sharp upside rally in September month along with good volume support. However, prices are now getting resistance of the downward sloping trend line visible on the long-term charts. The RSI (14-period) is hovering at extreme overbought zone and currently trading at ~76.960 levels, indicating profit booking might occur in short term from the resistance levels. However, stock might give upside breakout of the downward sloping trend line if the prices sustain above $0.037. Immediate support level is $0.032 while immediate resistance level is $0.037.

With the lack of scalable profits, nil core revenues and RSI trading in overbought region, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of $0.033 per share, as of 5^thOctober 2021.

Daily Technical Chart – WC8

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

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