Stocks’ Details

Millennium Minerals Limited

Overall Strong Mining Performance in March Quarter: Millennium Minerals Limited (ASX: MOY) is into the mining, exploration and development of metal resources in the region of Western Australia.

As per the March 2019 quarterly updates, the strong drilling results continue to support the potential to develop multiple new high-grade open pit and underground ore sources at Golden Gate, where open pit mine development will start this quarter. The company raised $15 million through an oversubscribed 1-for-8.8 renounceable rights issue. The proceeds from the issue to be used in mine development and exploration programs.


March 2019 quarter cash & bullion movements (Source: Company Reports)

The company recorded a loss after tax for the year ended 31 December 2018 of $9.4 million as compared to $5.6 million in 2017, primarily driven by a deterioration in gross profit of 66% and an increase of 27% in administrative and other expenses.

The Gross profit result was mainly due to Costs of goods sold increasing by 12% or $13.5 millionfrom an additional 1.3 million bank cubic meters (BCM’s) and 0.7 million tonnes of ore being mined in FY18 as compared to FY17.

Total assets increased by 11% to $122.1 million as compared to $109.7 million in 2017 due to a 23% or $7.5 million rise in exploration and evaluation assets from an enhanced exploration program  to build its ore reserves.

Production Guidance: Based on the growing Ore Reserve inventory, production guidance for CY2019 is expected to be in the range of 90,000-100,000oz of gold at an all?in sustaining cost (AISC) in the range of A$1,300?1,375/oz.  With the two?phase sulphide expansion project and second underground mine set to come on stream in late 2019 and early 2020, the company expects annual production to continue to increase in CY20 to 110?120,000oz.

The stock has given negative returns of 21.88% and 39.81% over the past one month and three months respectively. With key margins negative Y-o-Y along with the company reporting loss on Y-o-Y basis, we advise a “Watch” stance on the stock at CMP of $0.120 (down 4% as on 10 May 2019).

Adriatic Metals PLC

In Pre-production Stage: Adriatic Metals PLC (ASX: ADT) is a zinc polymetallic explorer and developer via Vareš Project in the Federation of Bosnia & Herzegovina (Bosnia), with 100% interest in the project. The company confirms that on 3^rd May 2019, it completed the issue of 100,000 CDI (Chess Depository Interests) in the capital of the company.  The CDIs were allotted at $0.40 per CDI and pursuant to the exercise of $0.40 priced options.

The group incurred a loss of £847,850 in 1HFY19 as compared to £412,647 for period ending December 2017 primarily driven by higher administrative expenses along with higher finance costs.


Consolidated Income Statement 1HFY19 (Source: Company Reports)

Recently the company received assay results from six drill holes from the programme at Rupice. It exhibited that the high-grade mineralisation that were drilled up to the old Concession boundary in 2018 returned exceptional grade, continuity and thickness of the mineralisation.

What to Expect: The company continued developing its mineral assets in Bosnia with a view to increase both the tonnage and metal values of the resources. The company intends to rapidly progressing scoping and feasibility studies together with progressing the various approvals processes. Moreover, as the company is in pre-production, there is no forecast earnings nor expectation for profits. However, the company will continue to invest in its exploration assets and might take time to report profits in the near to medium term. The stock remained highly volatile with negative return of 21.43% in last 1-month and return of 12.82% over a three months span. However, on YTD basis, stock moved significantly high at 54.39%. Being in the pre-production stage, the company has no revenues till date. Considering the aforesaid factors, we advise a “Watch” on the stock at current market price of $0.875.  

WhiteHawk Limited

Watch Out for Upcoming 1H FY19: WhiteHawk Limited (ASX: WHK) is known for identifying, prioritizing, & mitigating cyberrisks leveraging AI & Open Data.  The company has been selected as a cyber sub-contractor by the prime contractor on a newly awarded USD $2 Billion Contract for a US Federal Government Department. Moreover, it was selected as a cyber sub-contractor by the prime contractor on a newly awarded USD $27M Prime Contract for a US Federal Government Department.


Revenue Overview by Quarter (Source: Company Reports)

On the financial performance front, the contracted revenue for CY 2019 is currently at ~AU$2.4 million. The company has strong pipeline of opportunities across currently operating revenue streams. It has a current cash balance of US$650k as of 31^st March 2019 with a financing receivable of ~A$640k. Currently, the company has no debt after the amount US$250,000 repaid post year end.

What to Expect: The company has a strong pipeline involving more than fifty potential customers in their mature stages of business development across the Defense Industrial Base, US Govt. and Financial & Insurance sectors. Moreover, the company anticipates three additional sales of the 360 cyber risk framework and one strategic partnership with a bank or insurance company in the first quarter of 2019. The company expects monthly operating cost reductions from completion of Online Decision Engine and Cyber Exchange Platform.

Stock Recommendation: The stock has seen substantial upside in terms of price movement with gain of 109.68% in last 3-months and 94.03% in last 1-month. With several key awarded contracts and heavy project pipeline, the company seems to poise for growth going forward. The stock is currently not trading on ASX with a halt at $0.130 (AEST 04:00 PM, 10^th May 2019) due to an announcement related to capital raising by the company. It will start normal trading activities either on 14 May 2019 or post announcement, whichever is prior. 

Considering the company at its nascent stage, we have a “Watch” stance on the stock that last traded at $0.130 per share.  


Comparative Price Chart (Source: Thomson Reuters)   
 

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