New World Resources Limited (ASX: NWC)

NWC was listed on ASX in 2005 and is an Australian company involved in mining and exploration of minerals (copper, gold & cobalt) in North American Projects. Some of its projects include the Antler Copper Project, Tererro Copper-Gold-Zinc VMS Project, the Colson Cobalt-Copper Project and the Goodsprings Copper-Cobalt Project. As of 7^th February 2022, the company’s market capitalisation stood at AUD 111.62 million.

Operational Updates:

• As per its 2QFY22 Quarterly Report released on 31^st January 2022, 74% of its maiden MRE was classified in high-confidence “Indicated” category and robust high-grade JORC Mineral Resources Estimate has declared in the Antler Deposit at a 1% Cu-equivalent cut-off.
• Besides, a total of 43.5m in ANT70, 21.7m in ANT70W1 and 21.2m in ANT77 drill-holes, high-grade mineralisation was intersected in the three intervals at the Antler Copper Deposit in Arizona, USA.
• Company’s prospective demerger of US Cobalt Assets is in process and is due for lodging with ASIC in mid-February. The total expenditure involved is ~USD 444k (including initial payments for the Blackpine Project), which will be reimbursed after the completion of proposed Koba Resources Limited demerger and its upcoming ~AUD 8 million IPO.

2QFY22 Financials Top and Bottom Line: In its second quarterly update, its cash receipts from customers were reported as NIL and closed the 2QFY22 with a cash balance of ~AUD 13.60 million at the end of 30^th December 2021 versus ~AUD 18.23 million at the end of 30^th September 2021. The total losses after tax for FY21 were at ~AUD 2.81 million, versus ~AUD 1.21 million in FY21.

Technical Analysis: On a weekly chart, NWC’s prices are consolidating in a broad range of AUD 0.063 to AUD 0.095 since July 2021 and are currently approaching the lower band of the range. The stock’s prices are trading below the trend-following indicators 50-period SMA and 21-period SMA, indicating a negative stance and may act as the resistance levels for the stock. Moreover, the momentum oscillator RSI (14-period) is trading around mid-point at ~44.648 levels, indicating directional indecisiveness. The support level for the stock is placed at AUD 0.063, while the resistance level is at AUD 0.076.

Considering the stock price’s indecisiveness, subdued financials in FY21, and the anticipation of completed demerger, it might appear unappealing to currently enter at such indecisive price levels, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.0690 per share, down by ~1.429%, as of 7^th February 2022.

Weekly Technical Chart – NWC

Source: REFINITIV

Australian Silica Quartz Group Limited (ASX: ASQ)

An Australian company, ASQ works under the acquisition, exploration, and development activities of bauxite mineral deposits in Western Australia. Besides, it also deals in development of sustainable export of silica quartz products. its projects are the Darling Range Project, Athena, Dionysus and Ceres. As of 7^th February 2022, its market capitalisation stood at ~AUD 33.19 million.

Operational Updates:

• As per its quarterly update on 1^st February 2022, the company signed an MOU terms sheet with C&D Logistics Co. Ltd for exporting 45,000 tonnes per month of silica sand from Marella Road, Bullsbrook, WA.
• The product is ASQ-GWSC1 a sub 100ppm Fe₂O₃ silica, which is suitable to manufacture solar panel cover glass.
• Mining Access Agreement (MAA) is in place and the scoping study for exports 0.5 – 1.0 million tonnes per annum is in the process at the Albany White Hill Silica Sand Project.
• The company is in anticipation that current high international sea freight rates will soften in FY22.
• Its JV partner - DevEx have defined an extensive differentiated mafic ultramafic intrusion extending over the length of 12 km on ASQ’s E70/3405 between Chalice Mining Ltd (ASX: CHN)’s Julimar discovery to the south and Caspin Resources Ltd (ASX: CPN)’s Yarawindah Brook Project to the north.

Financial Highlights:

• 2QFY22: For its second quarter, the company recorded its cash receipts as ~AUD 61k with a net operating outflow of ~AUD 301k. ASQ closed the quarter with a cash balance of ~AUD 5.18 million at the end of 30^th December 2021 versus ~AUD 5.49 million at the end of 30^th September 2021.
• FY21: For FY21, other income was reported as ~AUD 306.93k million versus ~AUD 341.84k in FY20. Where the recoupment of exploration costs increased from ~AUD 176k in FY20 to ~AUD 189k in FY21. The total losses after tax for FY20 of ~AUD 840k were substantially increased to ~AUD 1.19 million in FY21.

Technical Analysis: ASQ’s prices are consolidating on the chart and sustaining above a crucial support level AUD 0.110. Prices are sustaining above 50-period SMA but struggling to surpass its 21-period SMA, thus indicating a directional indecisiveness. The momentum oscillator RSI (14-period) is hovering in a mid-range at ~51.20 levels, further supporting a sideways trend. The immediate support level is at AUD 0.110, while the resistance level is at AUD 0.140.

With the increase in its total losses in FY21, net operating cash outflow in 2QFY22, and sideways movement of the scrip’s prices, investing at such current price levels should be taken cautiously, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.125 per share, up by ~4.166%, as of 7^th February 2022.

Weekly Technical Chart – ASQ

Source: REFINITIV

Osprey Medical, Inc. (ASX: OSP)

OSP is an Australian company, which was listed on ASX on 2^nd May 2012. It’s focus of operations is - to protect patients from the harmful impacts of X-Ray Dye (contrast). Some of its products are AVERT, AVERT Plus, the DyeVert NG, DyeVert Plus, and DyeVert Plus EZ Systems. As of 7^th February 2022, the company’s market capitalisation stood at ~AUD 12.05 million.

4QFY21 & Operational Updates:

• As per its quarterly update on 31^st January 2022, despite the COVID-19 Omicron cases surge, OSP sold 6,685 units in FY21 which was up by ~27% Y-o-Y. Its 4QFY21 sales were 1,385 units, which totalled revenue as ~USD 378k.
• A ~22% increase (pcp basis) in units in OUS market’s sales (Outside the US) came only from strategic alliance with GE Healthcare (GE).
• Where first sales in Canada was achieved in 4QFY21, while on the other hand, OSP sales of 1,014 units in the US decreased by ~7% from previous quarter.
• With the ~USD 446k as cash receipts, OSP’s net cash outflow from operating activities were reported as ~USD 2.68 million and it closed its fourth quarter (4QFY21) with a cash balance of ~USD 5.39 million as of 30^th December 2021 versus ~USD 8.11 million in the preceding quarter.
• The company expects to hold its Annual Meeting for stockholders on 2^nd June 2022.

Technical Analysis: Currently OSP’s prices are sustaining below the falling trend line support level at AUD 0.40 and facing the resistance of the same. Moreover, prices are trading below the trend-following indicators 21-period SMA and 50-period SMA, supporting a bearish stance. The momentum oscillator RSI (14-period) is trading in an oversold territory at ~24.897 level, which might indicate the possibility of a rebound from the lower levels. An important support level for the stock, is placed at AUD 0.400 while the key resistance level is placed at AUD 0.495.

The company is disappointed with the interruptions in the hospital access due to COVID-19, which might interrupt its expansion strategy and operations in future. With the uncertainty in the healthcare industry, decline in US sales and its RSI levels, investing at such uncertain timeline and price levels should be taken prudently, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.450 per share, down by ~4.256%, as of 7^th February 2022.

Weekly Technical Chart – OSP

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 Yellow colour line reflects the Trendline, which shows whether the direction of the scrip is upwards or downwards.

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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