Rox Resources Limited (ASX: RXL)

RXL is an Australian company listed on ASX in 2004, and is focussed on exploration, mining and development of Gold. Its projects involve Youanmi Gold Project, Mt Fisher Gold Project, Fisher East Project and Collurabbie Project. As of 10^th February 2022, the company’s market capitalisation stood at AUD 69.13 million.

Operational and 2QFY22 Updates:

• As per 3^rd February 2022, the company received drilling results from 426 holes at Youanmi Regional tenements. The aircore drilling identified [email protected]/t AU from 68m within a broader zone of [email protected]/t AU from 56m intersected covering 22,445 metre after an update of 3 Moz AU upgrade in resources in quarterly report.
• As per quarterly update on 28^th January 2022, through Albion process the company showed an average gold extraction of 92.2% (recovery rate) for Youanmi Sulphide Ore.
• Its Mt Eureka Gold Project resumed its exploration process which included 160-hole and 7,000-metre aircore drilling program.
• With the nil cash receipts from customers, RXL’s net cash outflow from operating activities were ~AUD 5.00 million and closed its second quarter (2QFY22) with a cash balance of ~AUD 5.59 million as of 30^th December 2021 versus ~AUD 10.66 million posted in last quarter.

FY21 Top and Bottom Line: As per the Annual Report, the company reported an increase on Y-o-Y basis in its other income from ~AUD 65k in FY20 to ~AUD 67k in FY21. While on the other hand, it had posted an increase in net loss to ~AUD 11.76 million in FY21.

Technical Analysis: RXL’s prices are sustaining above the horizontal trendline support level for the past couple of weeks and recently started to move upside after taking the support of the same level. On a weekly chart, the prices are also sustaining above the trend-following 21-Period SMA, indicating a possible uptrend. The momentum oscillator RSI (14-period) is trading at ~52.417, supporting the positive bias. An important support level for the stock is placed at AUD 0.400 while the key resistance level is placed at AUD 0.485.

With resource upgrade at Youanmi Gold Project and positively biased stock’s prices, investors with a high-risk appetite might consider a ‘Speculative Buy’ position. The stock was analysed as per the current price of AUD 0.425, 01:00 PM (GMT+10), Sydney, Eastern Australia as of 10^th February 2022. However, the risk levels are high depending on the future findings and their timely commissioning.

Weekly Technical Chart – RXL

Source: REFINITIV

Pilbara Minerals Limited (ASX: PLS)

Listed on ASX in 2007, PLS is an Australian strategic metal producer involved in mining, exploration, and development of mineral resources mainly lithium-tantalite. Its major projects are: Pilgangoora Lithium-Tantalite Project and Altura Lithium Operations (aka Ngungaju Lithium Operations). Its market capitalization stood at AUD 9.88 billion as of 10^th February 2022.

2QFY22 Financial and Operational Updates:

• As per the quarterly report released on 31^st January 2022, the company produced 83,476 dry metric tonnes (dmt) of spodumene concentrate (1QFY22: 85,759 dmt) and shipped 78,679 dmt at an average price of ~USD 1,750 – 1,800 dmt.
• Due to project delays, labour market constraints, the overall production was slightly lower than previous quarter, where its tantalite sales was 29,038 lbs in second quarter of FY22 versus 36,876 lbs in first quarter of FY22.
• With the surging lithium prices, the spodumene concentrate price on Battery Material Exchange (BMX) was ~USD 2,350/dmt in October 2021 and is expected to be ~USD 2,600 – 3,000/dmt in the upcoming March 2022 Quarter.
• The operating cashflow stood at ~AUD 115.5 million in second quarter and cash at the end of 31^st December 2021 was recorded as ~AUD 245.00 million versus ~AUD 137.30 million at the end of 31^st September 2021.

FY21 Top and Bottom Line: As per the FY21 Annual Report, revenue from ordinary activities enhanced by ~108.9% Y-o-Y, from ~AUD 84.14 million in FY20 to ~$175.82 million in FY21. On the other hand, net losses for FY21 was decreased by ~48.2% Y-o-Y and recorded as ~AUD 51.44 million in FY21 versus ~AUD 99.26 million in FY20.

Technical Analysis: On the weekly chart, after a significant upside movement, PLS stock’s prices have started reversing from its 52-week high levels of AUD 3.89. Prices are also facing resistance of the upward sloping trend line further indicating price reversal in the coming period. The momentum oscillator RSI (14-period) is trading at ~68.162 level hovering around overbought levels, indicating a possible reversal from the upper end. An important support level for the stock, is placed at AUD 2.98 while the key resistance level is placed at AUD 3.800.

Considering the stock’s trading at higher side and technical levels, investment in the PLS at this price should be taken with extra care, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 3.360 per share, up by ~1.204%, as of 10^th February 2022.

Weekly Technical Chart – PLS

Source: REFINITIV

Generation Development Group Limited (ASX: GDG)

Listed on ASX in 2007, GDG is a pooled development fund and caters to the retail sector in Australia by providing marketing and management of life insurance and life investment products and services. It also offers administration services in the financial services industry. As of 10^th February 2022, its market capitalisation stood at AUD 271.47 million.

2QFY22 Operational Updates:

• As per its 2QFY22 Quarterly Report released on 17^th January 2022, the funds under management reported a ~44% of increase YoY from ~AUD 1,489 million in 2QFY21 to ~AUD 2,142 million in 2QFY22.
• The net inflows have increased by ~165% in 2QFY22 on pcp basis, where ~AUD 184 million was reported as sales inflows for the second quarter. With the increase, the company’s business reached two milestones of including:

2. FUM increased to ~AUD 2.0 – 2.1 billion.
3. With ~AUD 344 million sales in last six months surpassed its second highest annual sales results.
4. GDG has gained a market share of ~52% of annual sales inflows as of September 2021.

Technical Analysis: On a weekly chart, GDG stock prices are facing the resistance of the rising trend line and sustaining below the trendline resistance level. The momentum oscillator RSI (14-period) is trading at ~66.04 level and formed the negative divergence, which indicate the possibility of a correction from the higher levels. However, prices are trading above the trend-following indicators 21-period SMA and 50-period SMA, which may act as a support zone. Now the next important support level for the stock is at AUD 1.350, while resistance is at AUD 1.590 level.

Due to the stock’s trading at higher side and with a possibility of downward movement, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 1.480 per share, up by ~1.369%, as of 10^th February 2022.

Weekly Technical Chart – GDG

Source: REFINITIV

Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decisions should be made depending on the investors’ appetite for upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and the uptrend may take a pause due to profit booking or selling interest. 

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 21-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trend. If the prices are trading above the 50-period, then it shows prices are currently trading in a bullish trend, (Vice – Versa).

The Yellow colour line reflects the Trendline, which shows whether the direction of the scrip is upwards or downwards.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

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