Highfield Resources Limited (ASX: HFR)

Incorporated in 2011, HFR is an Australian company engaged in mineral exploration, mainly Potash. Its four major projects are: Muga, Vipasca, Izaga, Pintanos and Sierra del Perdon, that are located in Northern Spain. Its market capitalization stood at $182.21 million as of 1^st October 2021, at the stock price of $0.48 per share.

Financial & Operational Updates – Mr Querub, a Non-Executive Director in HFR has retired as per the announcement on 27^th September 2021. As per the release on 21^st September 2021, the company signed a purchasing contract for important components used at its flagship Muga Potash Mine. As per the recent half-yearly financial report, the company had $12.64 million cash and cash equivalents, with no debt as of 30 June 2021. Meanwhile, the total comprehensive loss attributable to the company narrowed to $2.96 million in 1HFY21 from $18.78 million in 1HFY20. On 30^th August 2021, HFR signed a non-binding MOU with the Port of Bilbao, a largest port operator in Spain, which will support the Muga mine in logistics, infrastructure, and other services, thus reducing the cost.

Technical Analysis: HFR’s prices are trading in a primary downward trend, Prices have started to fall after making a 52-week high of $0.885 in May 2021.  On the daily chart, prices are currently trading below 21-period SMA and 50-period SMA, and near the 52-week low of $0.460. The RSI (14-period) is hovering at ~41.624 level further indicating weak price momentum; Immediate support levels are $0.430 and $0.330 while immediate resistance levels are $0.565 and $0.670.

The company reported net losses and there was no income generation in 1HFY21. Amid volatility in price and RSI level, on the technical front, investing in this stock at current levels must be undertaken with a cautious approach, hence it's suggested to ‘Watch’. The stock was analyzed as per the closing market price of $0.480 per share, down by ~4.001%, as of 1^st October 2021.

Daily Technical Chart – HFR

Source: REFINITIV

Lepidico Limited (ASX: LPD)

Incorporated in 1979, LPD is engaged into exploration and development of minerals. It owns clean-technology (L-Max®) to metallurgical processes producing lithium carbonate from non-conventional sources, specifically lithium-rich mica minerals including lepidolite and zinnwaldite. It has its projects in Australia, Canada and Portugal. As on 01^st October 2021, the market capitalization of the company stood at $141.49 million, and trading at $0.021 per share.

Financial & Operational Updates – As per the announcement on 27^th September 2021, EPCM works have started, with contract award for Phase I concentrator in Namibia and chemical plant in UAE. As per statutory accounts released on 27^th September 2021, the company recorded an increase in other income from ~$63k in FY20 to ~$4.13 million in FY21. On the other hand, Total Comprehensive Loss of ~$9.81 in FY20 has now been converted in profits of ~$75k in FY21. Cash at the end of FY21 was reported as ~$14.73 million as of 30^th June 2021 versus ~$4.79 million in PcP.

Technical Analysis: On Daily Chart, LPD price are trying to recover from the lower levels facing resistance of the downward sloping trend line at $0.028. The current market price is also struggling to get past the 21-period SMA and 50-period SMA further showing weakness in the prices. RSI (14-period) is hovering at ~42.182 levels, that indicates prices are losing momentum. The immediate support levels for the stock are at $0.0200 and $0.0180 level while immediate resistance levels are $0.024 and $0.028.

With the lack of scalable profits and nil core revenues and its indecisive nature of price levels, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.021 per share, down by ~8.69% as of 1^st October 2021.

Daily Technical Chart – LPD

Source: REFINITIV

Aldoro Resources Limited (ASX: ARN)

ARN is a mineral exploration and development company mainly having a focus in gold and nickel-based projects in Western Australia. Other projects include minerals like PGM, advanced rubidium, with a current interest in Niobe rubidium/lithium/tantalum projects. The company was incorporated on 2017 and its market capitalization as of 1^st October 2021 stood at $40.00 million and the share price stood at $0.430 per share.

Financial & Operational Updates – As per the Annual Report released on 29^th September 2021, revenue from other income was reported as ~$65k in FY21 versus ~$96kin FY20. The group reported a Total Comprehensive Loss of ~$2.64 million for FY21, as compared to loss of ~$1.86 million in FY20. Cash at the end of FY21 was reported as ~$3.89 million as of 30^th June 2021 versus ~$2.20 million in PcP. As per the announcement on 28^th September 20 rock chips samples were collected from three key target types: LCT pegmatites, magmatic nickel-copper, and VHMS copper-gold at Narndee and Wyemandoo. As per the exploration update shared on 22^nd September 2021, drilling at VC1 showed positive results for nickel, copper, cobalt and palladium. A priority offer was provided to ARN’s shareholder for the application of Aurum Resources’s IPO of $4.5 million. There haven’t been any cash receipts from customers for the 4QFY21. As per the release dated 23^rd September 2021, the company had $6 million cash at the end of 31^st August 2021.

Technical Analysis: On a daily chart, ARN prices are starting to correct after making a new 52-week high of $0.67 in August 2021 and consolidating in a range of $0.405 to $0.505. Prices are currently trading below 21-period SMA and 50-period SMA indicating negative momentum in the stock. The momentum oscillator RSI (14-period) is trading at 43.787 levels, which further indicate that prices are losing momentum. An important support level for the stock, is placed at AUD 0.405 while the key resistance level is placed at AUD 0.510.

After considering the company’s updates on the Narndee Igneous Complex Project & Niobe Project and the RSI level, investing in this stock at current levels should be monitored as per the support levels, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of $0.430 per share, down by ~5.495%, as of 1^st October 2021.

Daily Technical Chart – ARN

Source: REFINITIV

OZZ Resources Limited (ASX: OZZ)

OZZ Resources Limited (ASX: OZZ) is engaged into exploration of minerals. The company’s projects are established near major gold producing centres in highly prospective regions near Leonora, Cue, Meekatharra and Mt Magnet in Western Australia. As on 01^st October 2021, the market capitalization of the company stood at $7.89 million, and trading at $0.185 per share.

Financial and Operational Updates: On 22^nd September 2021, it announced to offer Bonus Loyalty options with an issue price of $0.005 per option, exercisable at $0.25 within 3 years of issue. For the year period of 27^th August 2020 to 30 June 2021, the company recorded net losses as ~$3.13 million, owing to major costs involved in mineral exploration and evaluation totalling to ~$2.31 million. On 18^th August 2021, multiple prospects for gold and nickel with greenstones lithologies were identified at Rabbit Bore and Peterwangy Projects. As per the announcement on 5^th July 2021, the company successfully got listed on ASX with an IPO proceeds of $5 million, which heavily was oversubscribed with 25 million shares at $0.20. The company decided to ultilise IPO proceeds for an aggressive exploration program across its portfolio of projects planned for 2HFY21.

Technical Analysis: As mentioned above OZZ is new to ASX, therefore due to lack of ample candlestick data from the above-mentioned date i.e., 5^th July 2021 till date, technical analysis is not applicable.

With the Net Losses reported for FY21 and considering it is novice on ASX, a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of $0.185 per share, up by ~5.714%, as of 1^st October 2021.

Daily Technical Chart – OZZ

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 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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.