Stocks’ Details
Euro Manganese Inc
A Look at June 2020 Quarter: Euro Manganese Inc (ASX: EMN) is engaged in the evaluation and development of the Chvaletice Manganese Project. The market capitalisation of the company stood at ~$52.92 Mn as on 9th October 2020. In a recent presentation, the company notified that the demand for the HPM (High- Purity Manganese) products is rising very quickly across the globe. This has been supported by the rise in the electric vehicle and Li-ion battery industry. During June 2020 quarter, EMN raised $1,005,157 through a non-brokered private placement of 8,738,312 common shares and 401,888 CDIs, at an issue price of $0.11 per share or A$0.13 per CDI. For June 2020 quarter, the company reported project evaluation costs of $407,774. However, it witnessed an impact from COVID-19 on the progress of projects.
Key Financial (Source: Company Reports)
Outlook: The company is planning the commissioning and commercial production in 2024 for its Chvaletice Manganese Project. In addition, EMN is intending to finish offtake agreements in 2022 for the project.
Stock Recommendation: As on 30th June 2020, the cash balance of the company stood at $0.4 million. The stock of EMN has moved up by 141.18% and 188.73% in the past one and three months, respectively. The 52-week low-high range for the stock stands at $0.058-$0.270, respectively. On the technical analysis front, the stock price of EMN has a support level of ~$0.196 and a resistance level of ~$0.230. Thus, in light of past movement in the stock, nil revenue and loss-making business, we advise investors to avoid the stock at the current market price of $0.220 per share, up by 7.317% on 9th October 2020.
Estrella Resources Limited
Discovery of Massive Nickel Sulphide: Estrella Resources Limited (ASX: ESR) is involved into mineral exploration with a market capitalisation of $58.04 Mn as on 9th October 2020. Recently, the company stated that is has received 2.9 million of massive nickel-copper sulphide mineralisation from the diamond core hole CBDD030 from 435.9m to 438.8m depth at the southern end of the T5 Prospect. This proves as a milestone in the development of the T5 Prospect.
Sulphide Intersection Summary (Source: Company Reports)
Sale of Gold Project: On 25th September 2020, the company announced the completion of the divestment of MundaGold Project to Widgie Gold Pty Ltd and received the purchase consideration of $1,237,000 cash (ex GST). As of now, ESR possesses decent funds to focus on its core assets. For the year ended 30th June 2020, the company reported loss amounting to $609,676 as compared to $622,143 in FY19.
Capital Raising: In the month of August 2020, the company announced the capital raising of $1,400,000 (before costs) via the issue of 200,000,000 ordinary shares at an issue price of $0.007 along with one free attaching option for every one share subscribed, exercisable at $0.02, expiring 31 July 2023. The company would use these funds to start drilling activities at its Carr Boyd Nickel Project and for general working capital.
Stock Recommendation: The company closed the year with a cash balance of $36,479 as compared to $279,170 in FY19. In the past three and six months, the stock has moved up by 887.50% and 1216.67%, respectively. As a result, the stock is inclined towards its 52-week high level of $0.094. In addition, the stock is trading at a price to book value multiple of 14.5x against the industry median (Basic Materials) of 2.5x on TTM basis. Thus, it seems that the stock is overvalued at current trading level. On the technical analysis front, the stock price of ESR has a support level of ~$0.027 and a resistance level of ~$0.086. Hence, considering the past movement in the stock, current trading levels and higher valuation, we give an “Expensive” rating on the stock at the current market price of A$0.064 per share, down by 18.987% on 9th October 2020, following the gain of 464.286% on 8th October 2020. We further suggest investors to wait for better entry levels.
Great Boulder Resources Limited
Phase 2 Drilling Commenced at Whiteheads Gold Project: Great Boulder Resources Limited (ASX: GBR) is primarily engaged in the exploration of Gold. The market capitalisation of the company stood at $14.1 Mn as on 9th October 2020. Recently, the company notified the market with an update on exploration at the Side Well and Whiteheads gold projects. With respect to side well, the company finished Phase 1 drilling at Mulga Bill. In addition, GBR commenced Phase 2 Blue Poles AC drilling at Whiteheads gold project. During FY20, the company reported loss amounting to $2,312,943 as compared to $1,353,836 in FY19. The company recorded net cash outflows from operating activities and investing activities of $591,711 and $1,250,827, respectively.
Key Financial (Source: Company Reports)
Outlook: The company believes that its project portfolio is well balanced with two gold and two nickel projects. In addition, the company seems to be well placed for a productive and rewarding FY21 on the back of aggressive, fully financed exploration program.
Stock Recommendation: During FY20, GBR finished placement and raised $700,000 through the issue of 17,500,000 fully paid ordinary shares at a price of $0.04. As on 30th June 2020, the cash balance of the company stood at $716,970 against $655,012 in FY19. In the past one month, the stock has provided a return of 53.06%. On the technical analysis front, the stock price of GBR has a support level of ~$0.046 and a resistance level of ~$0.083. Therefore, considering the recent progress on exploration program, well-balanced portfolio and return in last one month, we give a “Hold” recommendation on the stock at the current market price of $0.063 per share, down by 16% on 9th October 2020.
Comparative Price Chart (Source: Refinitiv, Thomson Reuters)
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