Stocks’ Details

Nusantara Resources Limited

Update on Funding of the Gold Project:Nusantara Resources Limited (ASX: NUS) is engaged in gold exploration and evaluation on the Awak Mas Gold Project in Indonesia.

In December 2019, the company had announced about a non-binding term sheet for the funding and development of the Awak Mas Gold Project. Counterparty to the term sheet was Indika Group, that is planning to acquire 40% interest in the Project for a sum of US$40 million. In addition, the company plans to raise another US$40 million in deferred payment arrangements from PT Petrosea Tbk, a 70% subsidiary of Indika. The Indika Group will be acquiring the stake in two parts. The first stage will involve an investment of US$15 million for acquiring 25% interest in the Project, after receiving shareholders’ approval and standard regulatory approvals. The remaining investment of US$25 million will be made on receiving shareholder’s approval and achieving the milestones stated in the Term Sheet. In December 2019, the company completed a Placement to sophisticated investors and an SPP to fund the obligations mentioned in the term sheet. A shareholder meeting to approve the transaction is expected to be held in April 2020. 

In the quarterly activities report for the period ended 31^st December 2019, the company notified about the critical path items for the Awak Mas Gold Project to reach Decision to Mine later in 2020. The activities included, Front End Engineering Design (FEED) to be completed by Petrosea, using deferred payments worth US$10 million, targeted in September 2020, land access and compensation engagement along with FEED, processing of bank debt for the project, etc. The company has also started drilling to identify extended resource below the Awak Mas ridge and plans to provide information regarding the updates resource and ore reserve in April 2020.

At the end of the period, the company had a cash balance of US$6.6 million. In the coming quarter, the company expects cash outflows amounting to US$2.8 million.


Cash Flow Forecast (Source: Company Reports)

Stock Recommendation: The stock of the company is currently trading close to the average of its 52-week trading range of $0.140 - $0.470. Over a period of 1 year, the stock generated a return of 53.85%. In the past 6 months, the stock gave positive returns of 25%. Considering the recent updates on project funding, ongoing development and drilling activities, and upcoming announcement on the resource and ore reserves, we suggest investors to adopt a watch stance on the stock at the current market price of $0.275, down 8.333% on 27^th February 2020.

Titomic Limited
Titomic Raises $19 million through Private Placement:Titomic Limited (ASX: TTT) develops digital manufacturing solutions for industrial scale metal additive manufacturing, using its patented Titomic Kinetic Fusion® technology.

Capital Raise Update: On 26^th February 2020, the company released an announcement regarding the successful completion of capital raising through private placement. As per the announcement, the placement was oversubscribed and will constitute the issue of 23,750,000 fully paid ordinary shares at a price of $0.80 per share, raising $19 million in total. Proceeds from the placement will be utilised to provide added capabilities to the TKF Melbourne Bureau production facility, that supports the development of innovative solutions and techniques. The company will also utilise the funds to expand its business operations by securing additional human resources and business capabilities, establishing offshore operations, and adding to the working capital.

Recent Deals: In a recent update to the exchange, the company announced that it has executed a binding agreement for the sale of two Titomic Kinetic Fusion Metal AM Systems, that will generate revenue amounting to $25.5 million. The R&D efforts of Titomic have now reached the commercialisation stage and guarantee the fulfilment of quality assurance requirements set across by Composite Technology, the counterparty to the agreement. In another announcement, the company notified about its partnership with Thales, for the development of advanced additive manufacturing methods to devise soldier weapon systems for the Australian Defence Force.

At the end of the quarter closing 31^st December 2019, the company reported cash and cash equivalents amounting to $4.46 million. Cash outflows in the coming quarter have been estimated at $3.87 million.


Cash Outflows for March’20 Quarter (Source: Company Reports)

Stock Recommendation: Over a period of 1 month, the stock generated a return of 22.09% and is currently inclined towards its 52-week low of $0.595. The company has displayed significant potential on the back of the recent contract, partnership, and the capital raising, which together form a key catalyst for future growth. The contract secured for co-development of military products with Thales, for the Australia defence sector, speaks volumes about the reliability of Titomic’s offerings. Considering the current trading levels, we suggest investors to wait for further correction in the stock price and adopt a watch stance on the stock at the current market price of $0.950, down 4.523% on 27^th February 2020.

Osteopore Limited

Record Revenue in December 2019:Osteopore Limited (ASX: OSX) is a medical technology company and offers product designed to facilitate bone healing across multiple therapeutic areas.

Quarterly Performance: During the quarter ended 31^st December 2019 (Q4FY19), the company reported revenue growth of 21% on the previous quarter, backed by record revenues in the month of December. Total revenue for the calendar year ended 31^st December 2019 reached over $1.1 million, depicting growth of 14% on the prior corresponding year. During the period, the company invested in its growth initiatives to drive future revenues. The company carried out business development activities, recruited senior personnel, and improved on its production capability to drive product demand. Another growth strategy involved penetration into new markets, which marked Osteopore’s entry into the Chinese market.


Revenue Growth (Source: Company Reports)

Stock Recommendation: The stock of the company generated returns of 6.03% over a period of 1 month and is currently trading very close to its 52-week low level of $0.550. In Q4CY19, the company secured multiple orders that will drive revenue growth in CY20. The orders have also built confidence around the company’s unique capabilities which will help drive momentum in the business. The company is committed to its growth strategy and is continuously striving to boost its capabilities. The company notified about the clinical trials being conducted for the use of its technology in the popular field of dental implants and expects to report the results in 2020. Considering the backdrop of the above factors, we suggest investors to keep a close watch on the stock at the current market price of $0.560, down 8.943% on 27^th February 2020.

Comparative Price Chart (Source: Thomson Reuters)

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