Magnum Mining and Exploration Limited (ASX: MGU)

MGU is engaged in the exploration and evaluation of mineral properties. It owns a 74% interest in the Gravelotte emerald project located in the Limpopo province of South Africa. The company was incorporated in 1986 and is based in Sydney, Australia, with a current market capitalization is $37.78 million, and a current price of $0.072 per share.

Financial & Operational Highlights – On 28^th July 2021, the company released its Quarterly Activities report for the period ending on 30^th June 2021, stating the agreement executed with Hanlon Engineering to develop a plant design and setting up the crushing and dry magnetic separation circuit for the proposed DSO production. Further, the negotiations are progressing positively for the provision of rail and port services for the export of Buena Vista production. To boost the growth and manage the operations, the company raised $6 million through the placement of new shares at 15 cents per share. On the financial front, the company did not record any cash receipts from its customers for the past 12 straight months ending on 30^th June 2021. The lack of operating revenues and increasing expenses, drained its cash balances to $6.69 million for the quarter ending 30^th June 2021, from $1.95 million in the previous quarter ended on 31^st March 2021.

Technical Analysis- The stock showed a significant downtrend, almost a steep vertical fall from consolidating upper levels and now hovering close to the support levels. The relative strength index is at 26.014 which is already in the oversold range, indicates that the carnage is not yet done with the stock prices, and bears are still in control. Usually, this type of oversold indicator at certain occasions gives the slight pullback, which is just the ‘short covering’ rather be considered as a change in trend. The 21 days simple moving average is hovering above the stock price at $0.116, which implies the further bearish trend continuation from current levels. For the prices to find stable grounds, the support of $0.060 should be well respected and held firmly, breaching that could further bring pain in the stock price. The stock prices tanked lately and might see profit booking, hence the resistance can be plotted at lower levels of $0.095.

Due to the lack of operating revenues and declining stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $0.072, down by ~5.26%, as of 26^th August 2021.

Daily Technical Chart – MGU

Source: REFINITIV

PointsBet Holdings Limited - (ASX: PBH)

PBH  is engaged in providing sports and racing betting products and services through its cloud-based technology platform in Australia and New Jersey. The company operates through Australian Trading, Technology, and the United States segments. It also engages in the provision of marketing and gaming support services, as well as in retail sports betting and software development activities. The company was incorporated in 2015 and is headquartered in Cremorne, Australia, with a current market capitalization is $2.51 billion, and a current price of $10.64 per share.

Financial & Operational Highlights – As per the exchange announcement shared on 25^th August 2021, the company shared successful completion of the retail component (Retail Entitlement Offer) with the retail rights trading to raise gross proceeds of $184.9 million. Further, the additional funds were raised via fully underwritten institutional placement up to $215.1 million at $10.0 per share. On 29^th July 2021 company released its activities report for the quarter ended 30^th June 2021, stating the slight decline in cash receipts from customers to $62.49 million from $64.95 million for the period ending on 31^st March 2021.

Technical Analysis- The stock showed a gradual downtrend with various spikes, which eventually sold off and entered into the downward trading channel. The relative strength index is at 46.887, which is in the middle of the trading zone, implying not a clear trend formation or continuation from current levels. The 21 days simple moving average is hovering closer to the stock price at $10.565, which implies the lack of strong trend continuation from current levels. Since the prices are in a downward range hence the support is placed at $9.33 and resistance at $11.92. Breaking either side of the range will give a clear picture of the trend formation. 

With a slight decline in revenues, but the negative cash balance on its books along with the declining stock prices, we give the stock the rating of ‘Avoid’ at the closing price of $10.640, up by ~1.53% as of 26^th August 2021.

Daily Technical Chart – PBH

Source: REFINITIV

Strandline Resources Limited (ASX: STA)

STA is a mining company with a focus on mineral exploration and development in Australia and Tanzania. The principal mining assets include Coburn Heavy Mineral Sands Project, Western Australia (100% interest), Portfolio of Heavy Mineral Sands (HMS) Projects (100% interest), and Fowlers Bay Nickel Project, South Australia (1% net smelter royalty in the project). The company aims to generate long-term equity value through profitable growth and sustainability. The market capitalization of the company stood at $218.47 million, and a current price at $0.195 per share.

Financial & Operational Highlights – As per the quarterly activities report for the period ended 30^th June 2021, released on 27^th July 2021, construction is at its pace at Coburn mineral sands project, Western Australia. This project received funding of A$338 million secured, hence Coburn project is fully funded through production and cash flow. Further, the company extended its progress in Tanzania, advancing government agreement and strategic partner discussions.

On the financial front, cash position stood at A$116.4 million as of 30^th June 2021. Meanwhile, the mineral sands market and commodity prices indicated strong strength, driven by the lack of supply and rising demand, hence providing strong fundamentals to support investment. The company does not report any revenue in the last 12 months.

Technical Analysis - STA's prices recently broke an upward sloping trend line on a downside and hovering around the breakout level, indicating a downward trend for the stock. However, the recent fall is not backed by volumes, indicating a lack of interest by market participants for downside direction. On the weekly chart, the leading indicator RSI (14-period) is in negative territory at ~45.81 levels. The CMP is sustaining below the trend following indicators 21-period SMA and 50-period SMA; further supporting a downside stance. Now an immediate resistance level for the stock appears at AUD 0.245 while support is at AUD 0.170 level.

Due to the lack of revenues in the last 12 months, regulatory and compliance risks as well as lack of positive trigger for stock movement, we give the stock the rating of ‘Avoid’ at the closing price of $0.195, as of 26^th August 2021.

Weekly Technical Chart – STA

Source: REFINITIV  

Note:  The black color line in the chart depicts RSI (14-period), while the orange color line represents the trend line. The green and red color lines show 21-Period SMA and 50-Period SMA respectively, while blue color histograms at the bottom of charts represent volumes.

E2 Metals Limited - (ASX: E2M)

E2M  is an Australian exploration company focused on making discoveries in Santa Cruz gold and silver province, southern Argentina. The company holds 273km2 strategic landholding in the prolific Cobar Superbasin, New South Wales Australia. Meanwhile, the Rio Negro Province contains the northern portion of the Somuncura Massif. The prime focus project is the Santa Cruz portfolio located in southern Argentina. The market capitalization stood at $40.59 million, and a current price at $0.26 per share.

Financial & Operational Highlights – The company released its quarterly report for the period ended 30th June 2021 and provide an update on exploration activities across its portfolio on 26^th July 2021. In the Conserrat gold and silver project, Santa Cruz, Argentina, the current phase of diamond drilling is completed, bringing the total since January 2021 to 84 holes for 12,415 million. From the El Rosillo gold project, Rio Negro, Argentina, a cumulative of 1951 composite rock samples have been collected within the T37 and T38 prospects.

On the financial front, the Company's financial position stood at $11.0 million cash as of 30^th June 2021. In the last 12 months, there are no receipts from customers. During the quarter ended 30^th June 2021, the company spent $3.7 million on exploration and evaluation, $229k on staff costs, and $208k on administration and corporate costs.

Technical Analysis- On the weekly chart, E2M stock price broke out an upward sloping trend line support at AUD 0.296 level on August 17, 2021. After the breakout, prices are sustaining below the trend line. Moreover, the prices are trading below the trend-following indicator 21-period SMA, indicating a negative momentum. The leading indicator RSI (14-Period) is trading at ~39.32 levels. An important support level for the stock, is placed at AUD 0.23, while key resistance level is placed at AUD 0.296.

With no revenues in the last 12 months, decent cash balance, lack of previous financial results, and movement of stock in a narrow range, we give the stock the rating of ‘Avoid’ at the closing price of $0.26, down by ~3.704% as of 26^th August 2021.

Weekly Technical Chart – E2M

Source: REFINITIV  

Note: The green color line in the chart shows RSI (14-period) and the yellow color line represents trend line. The purple color line represents 21-period SMA.

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.

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