ORA Banda Mining Ltd

Decent Cash Balance At the End of June Quarter: Ora Banda Mining Ltd (ASX: OBM) is involved in the gold exploration and development company. The company recently published its corporate presentation where it highlighted that its detailed mine planning includes 12-month evaluation period for Reserve estimation, mine planning, approvals, study work and the economic modelling required prior to production restart. It is presently targeting a robust Definitive Feasibility Study (completion expected in H2FY20) to underpin future project development.


OBM’s Key Deposit Summary (Source: Company Reports)

In another update, it was stated that OBM established a small shareholding sale facility for certain shareholders with holdings valued at less than A$500.

June ’19 Quarter Key Highlights: Its net cash outflow from operating activities was reported at $15.77 Mn. Its net cash inflow from financing activities for the period was reported at $28.84 Mn. As at 30 June 2019, the company had cash at bank of $14.1 million and happens to be debt-free.


June ’19 Quarter Operating Cash Flow Statement (Source: Company Reports)

What To Expect: A detailed review of the Company’s Davyhurst Gold Processing Plant and the plant’s associated infrastructure has now been completed by GR Engineering Services Ltd, with a clear positive outcome.GR Engineering Services Ltd has estimated the capital cost to complete remedial works and recommission this processing plant on an EPCM basis to be A$8.52 million, which represents a 43% reduction in the Company’s previous capital cost estimate including a contingency of A$0.84 million.

Stock Recommendation: At the end of June quarter, the company has decent cash balance and nil debt, which means that the company is fuelling its operations from its own funds. The company’s key margins have witnessed an improvement in FY18 on a YoY basis and, thus, it can be said that the company’s financial position has been improved. However, the stock is currently trading at A$0.230 per share, which is closer to the 52-week high level. It looks like that the stock might witness some sort of correction moving forward. The shares of the company are currently at a trading halt on ASX, owing to its pending announcement related to capital raising. And, the company expects that the trading halt will be lifted on or before market open on Friday 16 August 2019. Hence, considering the aforesaid facts and current trading levels, we suggest investors to wait and watch the stock at the current market price of $0.230 on August 14, 2019.
 

Echo Resources Limited

Decent Cash Balance of $17.32 Mn at the end of June Quarter: Echo Resources Limited (ASX: EAR) is involved in the exploration, development of mineral resources in the Yandal Belt region of Western Australia. The company recently announced the appointment of Dr Alistair Cowden as Non-Executive Chairman of the company. Dr Cowden will replace Mr Barry Bolitho, who has resigned from the position. Dr. Cowden has an experience of 38 years as a mining executive, director and geologist in the mining industry in Australia, Africa, Asia and Europe.

June ’19 Quarter Key Highlights: Its net cash outflow from operating activities for the period was reported at $3.7 Mn. Its net cash outflow from the investing activities for the period was reported at A$0.995 Mn. Its net cash inflow from financing activities for the period was reported at $17.45 Mn.


June ’19 Quarter Operating Cash Flow Statement (Source: Company Reports)

What to expect: The Yandal Gold ProjectBankable Feasibility Study (BFS) demonstrate that under conservative mining, processing and discount rate assumptions it will generate strong cash flows and robust returns on capital invested with competitive operating costs and minimal pre-production capital.The BFS is based on processing 6.9Mt of ore at an average grade of 1.86g/t Au for approximately 379,000oz. The Project generates an undiscounted pre-tax, free cashflow of $225 million over an initial 4-year mine life at a A$1,800/oz gold price. Average annual gold production is 95,000oz and life of mine all-in sustaining costs (AISC) are estimated at A$1,095/oz.

Stock Recommendation: Echo Resources Limited’s share generated positive YTD return of 54.55%. It is presently trading close to its 52 week high level of $0.265. The company’s key margins have witnessed an improvement in FY18 on a YoY basis. Moreover, the company has a strong cash position of A$17.3 million as at June 30, 2019 in order to support upcoming exploration and growth activities. Hence, considering the aforesaid facts and current trading levels, we give a “Hold” recommendation on the stock at the current market price of $0.245 (down 3.922% on August 14, 2019).
 

Red 5 Limited

RED’s cash balance at the end of June Quarter stood at $24.87 Mn:Red 5 Limited (ASX: RED) is involved in the gold mining and production and mineral exploration. The company recently announced that it has entered into an agreement with Macquarie Bank Limited to provide the Company with an A$20 million Working Capital Facility with a term of two years ending on June 30, 2021.This working capital facility allows the refinancing, on improved terms of the current Gold Loan Facility with Malaysian-based investment fund, Asian Investment Management Services Ltd, and strengthens Red 5’s balance sheet and operating liquidity.

In another update, RED highlighted that the pre-feasibility study at the King of the Hills Gold Project outlined potential for a 10-year open pit operation delivering average annual life-of-mine (LOM) production of 140,000oz recovered at average AISC of A$1,167 per ounce, with substantial upside potential from future inclusion of 1.1Moz of underground Resources, regional oxide deposits and ongoing exploration.

June ’19 Quarter Key Highlights:The net cash inflow from the operating activities for the period was reported at $18.18 Mn. The net cash outflow from the investing activities for the period was reported at $7 Mn. The net cash outflow from the financing activities for the period was reported at $0.302 Mn.


June ’19 Quarter Operating Cash Flow Statement (Source: Company Reports)

What to expect: At Darlot, September 2019 Quarter guidance has been estimated at 27-31Koz at AISC of A$1,400-A$1,550/oz, and FY20 guidance has been estimated at 110-120Kozpa.

Stock Recommendation: Recently, the company announced that AIMS Asset Management Sdn. Bhd. ceased tobe a substantial holder of the company from 13^th August 2019. Red 5 Limited’s share generated a whopping YTD return of 270.79% and is presently trading at close to its 52 weeks high level of $0.355 and, thus, it can be said that the price might witness some correction moving forward. Hence, considering the aforesaid facts coupled with decent returns in the recent past, and current trading levels, we have a wait and watch stance on the stock at the current market price of A$0.325 per share (down 01.515% on 14^th August 2019).  

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