Stocks’ Details 

Silver Mines Limited

Excellent Results from Bowdens Silver Project: Silver Mines Limited (ASX: SVL) is an explorer, miner, producer of silver, lead and zinc. It is operating: Tuena Gold, Bowdens Silver and Barabolar project located in New South Wales. As on 22^nd February 2021, the market capitalisation of the company stood at ~$272.41 million. The company recently declared considerable drill assay results from the Bowdens silver project situated in New South Wales (NSW) for a portion of BD21002 hole. It delivered some of the best intercepts at Bowdens depicting the quality of the deposit. SVL has 2 diamond rigs on site to continue drilling exploration on the program.

A Look at Q2FY21 Results: During May 2020, SVL had submitted an Environmental Impact Statement (EIS) to the New South Wales Department of Planning, Industry and Environment. During Q2FY21, SVL was notified that no objections to Bowdens Silver Project, NSW from the Government agencies’ and received public support for the project from the exhibition process. The exploration tested the northwest high-grade zone for the diamond mineralisation and intersected in BD20017. During Q2FY21, SVL continued desktop activities on the Barabolar Project in Central NSW, but due to COVID-19 pandemic, the planned drilling at the project was put on-hold. However, SVL will continue with the project as it has a substantial hydrothermal footprint. On Tuena gold, SVL commenced a 4k metre drilling program, and initial results reflect 4 metres @ 6.88 g/t gold from 98 metres in TRC20010. Post the quarter, SVL signed definitive agreements with Thomson Resources Limited (ASX: TMZ) for the sale of the 100% interests in Conrad and Webbs polymetallic projects in NSW. During Q2FY21, SVL incurred an exploration expenditure of $1.56 million and generated $87k of receipts from customers. SVL held cash and cash equivalents of $7.14 million as on 31 December 2020.  

Net Cash Used in Operating Activities, Q2FY21 (Source: Company Reports)

Outlook: Post the quarter, SVL notified that the drilling activities at Bowdens Silver will be expanded with up to 10k metres targeting high-grade infill and extension silver mineralisation. Drilling will continue to at least the close of Q3FY21. On Barabolar, SVL will conduct desktop studies and apply R&D technologies in the area. The aforesaid sale transaction is expected to be completed during Q3FY21, subject to pending approvals from the authorities and TMZ shareholders.  

Stock Recommendation: The stock of SVL gave a positive return of 17.07% in the past three months and a positive return of 92% in the past nine months. The stock is currently trading slightly above the average 52-weeks’ high level of $0.052-$0.365. The stock of SVL has a support level of ~$0.225 and a resistance level of ~$0.0261. On a TTM basis, the stock is trading at a price to book value multiple of ~2.9x as compared to the industry median of ~3.1x. Considering the current trading levels, excellent drilling results from Bowdens Silver project, decent cash position, low debt to equity ratio in FY20 & FY19, and valuation on TTM basis, we give a ‘Speculative Buy’ recommendation on the stock at the current market price of $0.240, up by 4.347% on 22^nd February 2021.

Vango Mining Limited

Gold Extensions Discovered at Trident: Vango Mining Limited (ASX: VAN) is an explorer, miner, and producer of gold. It is developing a 100% owned Marymia Gold project (MGP) located in Western Australia (WA). As on 22^nd February 2021, the market capitalisation of the company stood at ~$61.99 million. In a recent news announcement, the company updated on the final assays from its extensive FY20 drilling campaign at Trident Extension zone and Trident Deep areas. VAN has discovered high grade gold intersections that extend the mineralised zones beyond the present resource. VAN has also received and verified results from the diamond drilling at the Gidgee Flat and Contessa targets at its Ned’s Creek Farm-in JV project with Lodestar Minerals (ASX: LSR). The drilling at Contessa confirmed that the mineralisation open to the north.   

A Look at the Q2FY21 Results: During December 2020 quarter, VAN finished a 20k metre drilling program at the Marymia Project. The company intersected a Bonanza gold zone from drilling at Trident Extension. The company received essay results from drilling at Trident Deeps, Mars extension, Mareast, PHB-1, and Ned’s Creek. During the quarter, Mr. Craig Wallace joined VAN as an Independent Non-Executive Director. VAN incurred exploration and evaluation expenditure in cash of $2.76 million during Q2FY21. It held $5.49 million of cash and cash equivalents balance as on 31 December 2020.

Net Cash Used in Operating Activities, Q2FY21 (Source: Company Reports)

Outlook: VAN plans to drill open pit targets for the coming season to undertake mining studies thereafter. With this, it aims to identify new locations of gold mineralisation and contribute to a major resource upgrade planned for 1H21. The company awaits results from 9 drilled holes at Trident to extend mineralisation strike outside the existing resource.

Stock Recommendation: The stock of VAN gave a negative return of 16.43% in the past three months and a negative return of 44.54% in the past six months. The stock is currently trading at its 52-weeks’ low level of $0.059. The stock of VAN has a support level of ~$0.052 and a resistance level of ~$0.07. Considering the absence of revenue from core operations, negative ROE, trend of incurring net loss during FY16 to FY20. We give an ‘Avoid’ rating on the stock at the current market price of $0.059, down by 1.667% on 22^nd February 2021.

Superior Resources Limited

Results from Stage 2 Drilling Program: Superior Resources Limited (ASX: SPQ) is involved in mining and exploration of base metals- silver, gold, copper, nickel. As on 22^nd February 2021, the market capitalisation of the company stood at ~$16.52 million. On 19 February 2021, the company announced receiving all pending assays from the Stage 2 drilling program at steam engine gold project in Queensland. The company undertook drilling at 7 reverse circulation (RC) drill holes and received the best intersection at SRC104. It has revised the current mineral resource estimate (MRE) and expects to finish in about 2 weeks. On 16 February 2021, the company responded to an ASX query regarding Mr. Pooley’s non-compliance with the trading policy. He did not write/notify to the Chairperson/Company Secretary of his intention to carry out the on-market transaction before entering it. As a remedial measure, SPQ has notified ASX to conduct a workshop in-house to review commitments with course information from the Australian Institute of Company Directors and Governance Institute of Australia.

Q2FY21 Results: During the quarter, the company completed Stage 1 and Stage 2 drilling program for the steam engine gold project at Greenvale. The company updated the mineral resource estimate based on stage 1 drilling results-1.6 million tonnes at 2.2 g/t Au (~112k ounces). At Wyandotte prospect, SPQ started a technical study of the present data to establish an exploration target to determine whether potential exists for expansion of the copper mineralisation. On Big Mag prospect and greater Greenvale Project area, the company conducted initial exploration program planning and land access preparations for discovering magmatic nickel sulphide deposits during Q2FY21. SPQ held 74,244 shares of Deep Yellow Limited (ASX: DYL) with a closing value of $34,523 as on 31 December 2020. During Q2FY21, the company received $2,417k cash from financing activities. SPQ held $2.35 million as on 31 December 2020.

Net Cash Used in Financing Activities, Q2FY21 (Source: Company Reports)

Outlook: The company expects stage 2 results to have a considerable positive impact on the financial analysis within the scoping study and expects to complete it within next 4 weeks. The company is also planning for pre-feasibility study (PFS) and first drilling program at Dinner Creek Zone. At Wyandotte prospect, the company has planned to start a drilling program and mining studies in early 2021.

Stock Recommendation: The stock of SPQ gave a positive return of 33.33% in the past six months, 100% in the past 9 months. The stock is currently trading slightly below the average 52-weeks’ price level band. The stock of SPQ has a support level of ~$0.011 and a resistance level of ~$0.013. On a TTM basis, the stock is trading at a price to book value multiple of ~4x, as compared to the industry median of ~3.1x. Considering the absence of revenue from core activities, nil gross margins, negative ROE, and valuation on TTM basis, we give an ‘Avoid’ rating on the stock at the current market price of $0.012 on 22^nd February 2021.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.