Alliance Mineral Assets Limited

Commencement of Production Started in March 2018:Alliance Mineral Assets Limited (ASX: A40) started producing lithium concentrate at its key project, the Bald Hill Lithium and Tantalum Mine in March 2018. The company released its Activity Reports for March Quarter as on 30 April 2019. A40,in March quarter, recorded quarterly production of 38,291wmt of lithium concentrate grading 6.1% Li2O, up 68% from December quarter as a result of improved throughput, recovery and grade. Grade for the Quarter averaged 0.89% Li2O while gross recovery averaged 68%. Average selling price came in at A$1,083/dmt lithium concentrate sold, based on 6% Li2O.

Financial Performance in FY18: The company’s losses increased from $8.14 million in FY17 to $40.52 million in FY18, primarily on the back of site operational expenditure, acquisition costs and impairment/write-off expenses.As per the activity report, cash position on the balance sheet as on 31 March 2019 stands at $15.6 million.


Highlights of Income Statement (Source: Company Reports)

Management’s Guidance: Production of lithium concentrate (6% Li2O) is expected at 65,000 to 80,000 tonnes for January-July 2019 which is on track.The company plans to progress lithium hydroxide downstream JV Agreement with Jiangxi Special Electric Motor Co., Ltd. Offtake negotiations for the remaining unallocated long-term production is likely to be progressed significantly.

Stock Recommendation: At the current market price of $0.170, the market cap for the stock stood at ~$215.37 million. Looking at the historical price performance, the stock has given negative return of 26.67% and 5.71% on YTD basis and 1-month basis, respectively. Given the commencement of the project, net receipt from customers at $42.56 million along with net cash and equivalent of $15.62 million at the end of March quarter 2019 signifies the ongoing progress within the company. We would suggest investors to observe and assess the quantitative effect of ongoing developments and progresses of the business, therefore, we put a wait and watch stance on the stock at the current market price of $0.170 per share (up 3.03% on 1 May 2019).
 

Deep Yellow Limited

Highlights Regarding Reptile Project: Deep Yellow Limited (ASX: DYL), a specialist differentiated uranium company with its project in Namibia, recently released its activity report for the March quarter 2019. In March, the company announced an updated Mineral Resource Estimate (MRE) for Tumas 1&2, Tumas 1 East and Tumas 3 West which has resulted in combined Measured, Indicated and Inferred Mineral Resource Estimate over these deposits increasing to 67.4Mlb grading 352ppm eU3O8.

With respect to Reptile project, the resources within Tumas palaeochannel system totalled 86.2Mlb at 310 ppm eU3O8 reflecting a three-fold increase since November 2016.

Financial Performance in 1H FY19: The company recorded loss of $ 1,719,540 in 1H FY19, higher as compared to loss of 1,237,355 in 1H FY18. Net cash and cash equivalent at the end of March quarter 2019 came in at $7.14 million.


Income Statement (Source: Company Reports)

What to Expect: For Nova JV Project, JOGMEC approved annual budget of A$1.05M to March 2020.

Stock Recommendation: At the current market price of $0.375, the market cap for the stock stands at $76.49 million. The stock has gained ~49% in last 1-year. The company is in initial phase of the mining business. Going forward, projects development, financial health and fundamentals of the company will be watched carefully. Based on the foregoing, we have a close watch on the stock at current market price of $ 0.375 per share (down 1.316% on 01 May 2019).
 

Vintage Energy Ltd

Mixed Updates: Vintage Energy Ltd (ASX: VEN), engaged in the business of oil and gas exploration, recently released its quarterly report for March 2019 and updated that it has signed a rig contract for two firm wells and two optional wells in the Galilee Basin.

Financial Highlights of 1H FY19: The company recorded losses in first half of FY19 at $1,686,243 as compared to $155,734 in 1H FY18. Total assets on the balance sheet as on December 31, 2018 came in at $35,734,616, higher as compared to $8,267,363 as on June 30, 2018.

 
Statement of Profit and Loss for 1H FY19 (Source: Company Reports)

What to Expect: Otway Energy Pty Ltd as operator of PEL 155 continued work on the Nangwarry-1 exploration well. The preliminary documentation has been submitted to the JV and discussions in relation to a drilling rig contract has taken place. Drilling at Nangwarry-1 is expected to be commenced during Q4 FY19.

Stock Recommendation: At the current market price of $0.140, market capitalization of the stock stands at ~$37.32 million. The stock has given a negative return of 20% in last 6-months. Considering the accumulated losses, higher assets on balance sheet and further development in projects, we have a watch view on the stock at the current market price of $0.140 per share.

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