Pilbara Minerals Limited

What Management Has to Say About PLS: Pilbara Minerals Limited (ASX: PLS) ended September 2018 with $2.4 million net cash which was from the operating activities primarily because of the receipts from the customers which amounted to $16.4 million. In the corporate presentation for November 2018, the management has highlighted key indicators which might help it moving forward.

The primary factors are products of having high quality as well as the global offtake partner base. The company also has large reserves, resources as well as production expansion capacity.In the September 2018 quarter, the net cash which got used in the investing activities amounted to $43.1 million.


Cash from the operating activities of PLS (Source: Company Reports)

What Are the Key Focus Areas for Pilbara Minerals: As per the annual report which Pilbara reported on Australian Securities Exchange on October 9, 2018, the management stated that it would continue to maintain its focus on building the relationships with the customers, shareholders, government, community as well as industry. The company also stated that the exploration work is expected to witness a rise at the Mount Francisco project.

Additionally, the management stated that the exploration would expand the reserve as well as resource of the Pilgangoora Lithium-Tantalum project.

Stock Analysis Using Technical Analysis: Moving Average Convergence Divergence or MACD indicator has been applied on the daily chart of Pilbara Minerals Limited and the default values have been considered. As per the observation, the MACD line might cross the signal line and after the crossover, it is expected that the stock would witness a bullish momentum. Therefore, we maintain our “Hold” rating on the stock at the current market price of A$0.835 per share (down 1.765% on 23 November 2018).
 

Galaxy Resources Limited

Mt Cattlin Operations Helped GXY’s Financial Position: The management of Galaxy Resources Limited (ASX: GXY) stated that the multi-project portfolio helps the company is providing the diversified exposure in the hard rock as well as brine lithium assets in Canada, Argentina as well as Australia.The company is being handled by the strong management as well as Board as they are having a robust knowledge of the industry as well as strong history which revolves around building the successful mining companies.

The management of Galaxy Resources also stated that the macro trend of lithium is very much favourable as there has been increased demand from the lithium-ion battery applications as well as lower supplies.

What Factors Has Been Helping Galaxy Resources: The management of Galaxy Resources stated that the strong growth on the global basis in the electric vehicles is being dominated by China. The primary factor which is driving this growth is the elevated strict government rules and regulations with respect to the emissions. On the global basis, governments as well as automakers are in the process of the execution of the robust growth strategies as well as they are applying the mandatory policy which would help in the adoption of the EV or electric vehicles in the upcoming period.


Source: Company Reports

The management of the company stated that the spot prices of Lithium have already stabilized in China and there are anticipations that the prices would recover moving forward.The delay with respect to the new supplies is the primary reason which could help in the price recovery.

Technical Analysis of Galaxy Resources: Moving Average Convergence Divergence or MACD has been applied on the daily chart of Galaxy Resources Limited by considering the default values. After carefully analysing, it was noticed that the MACD line might cross the signal line and there are expectations that it would move upward. Therefore, bullish momentum is expected. As a result, we maintain our “Hold” rating on the stock at the price of A$2.620 per share.  
     

Kidman Resources Limited

JV with SQM makes for a business case:Kidman Resources Limited(ASX: KDR) Kidman Resources Limited explores and develops precious and base metals deposits in New South Wales (NSW), Western Australia and Northern Territory.

The company has through a recent ASX release announced their quarterly activities report, the pre-feasibility study has been comprehensively conducted and completed by the company at the proposed Kwinana lithium refinery and also on the proposed Mt Holland lithium mine. The results of this study have reinforced the case for the JV that it had entered with the SQM for the extraction and mining project. They also entered with the company for a funding term sheet with SQR, in accordance with which the lender has agreed to fund the company to the tune of $ 100Mn so that it can fund its share of construction of Mt. Holland lithium project.

Real Battery Grade Lithium Hydroxide Price (Source: Company Reports)

The battery grade lithium hydroxide average price is expected (2021-2031) to be US$ 14,074/t from the current levels of US$13693/t.

Market Outlook: The Australian region has enormous potential to become a leader in the lithium space. The region is one of the major suppliers of lithium and spodumene production. Moreover, the growing investment will consolidate the regions position in the global lithium market.

Hence its estimated that the lithium demand is expected to expand by 20% per annum till the year 2025 on the back of increased production of electrical vehicles.The firm is expected to capitalize on the favourable market dynamics and to exhibit promising growth in the coming quarters.

Stock Analysis from Technical Perspective: On the monthly chart of Kidman Resources, EMA or exponential moving average has been applied and default values have been considered. As per the observation, the stock price is expected to cross the EMA and might witness an upward momentum. Therefore, we maintain our “Buy” rating on the stock at the current price of A$1.285 per share.    
 

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