Vital Metals Limited (ASX: VML)

VML is engaged in mineral exploration in Burkina Faso, West Africa. Further, its Doulnia Gold Project is located in southern Burkina Faso, West Africa. The company was incorporated in 2004 and headquartered in Sydney, Australia, with a current market capitalization of $203.55 million at the current $0.048 per share price.

Financial & Operational Highlights - On 30^th July 2021, the company released its Q4FY21 update stating the initiation of the rare earth production at Nechalacho in June 2021. The company became Canada's first rare earth producer and the second in North America. The company received ~$1.26 million from the Canadian Northern Economic Development Agency (CanNor) for its Nechalacho ore solar. For carrying out the Nechalacho rare earth project, the company raised $43 million via institutional placement and received strong interest from the new and existing investors. The company did not receive any cash receipts from customers on the financial front for the last two quarters ending on 30^th June 2021.  The cash balance for 30^th June 20, stood at $34.9 million

Technical Analysis- The stock showed an uptrend and reached the near-term highs of $0.090 and corrected from there forming lower lows and lower highs. The Relative Strength Index is showing the reading of 43.369 which is in the middle of the range, failing to give a concrete trend formation from current levels. The 21 Day Simple Moving Average is currently hovering near the stock price at $0.051, indicating no clear directional movement for the stock price. Keeping the volatility of the stock into consideration, the support is placed at $0.039 and the resistance at $0.057 levels. Breaking either side of the range will give a clear picture of the trend formation.

Lacking operating revenues, volatile gold prices, and declining stock prices, we suggest investors to 'Avoid’ the stock at the closing price of $0.048 per share, down by ~2.04%, as of 2^nd August, 2021.

Daily Technical Chart – VML

Source: REFINITIV

Infinity Lithium Corporation Limited (ASX: INF)

INF is engaged in the exploration and evaluation of potash, lithium, tungsten, and tin holdings. Its principal assets are its potash projects in Gabon and the San Jose Lithium deposit in Spain. The company was incorporated in 2010 and is based in Subiaco, Australia. The company's current market capitalization is $37.47 million, with the current price of $0.095 per share.

Financial & Operational Highlights - On 29^th July 2021, the company released its Q4FY21 update, where it stated that the Investigation Perit Valdeflorez Application (PIV) was cancelled by the Regional Government of Extremadura (Junta) due to their administrative error. On a positive note, the MoU signed with LG Energy Solution was honoured. The terms of the Joint Venture agreement were negotiated in favour of the company where it will hold 75% interest in the JV  TEL with accelerated potential to move to 100% upon resolution of PIV. On the financial front, the company did not record any operating revenues from the customers for the last two quarters ending on 30^th June 2021. The cash balance as of 30^th June 21, was $19.13 million.

Technical Analysis- The stock recently showed a gradual upmove after bottoming out from the lows of $0.059 levels. The prices exhibit volatile nature with extreme movements in either direction after breaking the narrow range-bound trading zone. The relative strength index at 43.729, which is in the middle range of the zone, points for directionless movement, which can eventually lead to a breakout on either side. The 21 days simple moving average is placed above the closing price o the stock at $0.113,  implying some more downside left for the prices from current levels. For the prices to prohibit from diving into the bear territory, the support of $0.082 should be held firmly. Similarly, for the prices to regain the uptrend, a resistance of $0.125 needs to be taken off with strong volumes.

Lack of operating revenues, volatile commodity prices and declining prices of the stocks, we suggest investors to ‘Avoid’ the stock at the closing price of $0.095 per share, up by 2.15%, as of 2^nd August, 2021.

Daily Technical Chart – INF

Source: REFINITIV

Liontown Resources Limited (ASX: LTR)

LTR is an Australia-based battery metal exploration and development company, having Tier-1 discovery at its flagship Kathleen Valley Lithium-Tantalum Project in Western Australia. Its projects also include Buldania Project, Moora Gold-PGE-Ni-Cu Project and Toolebuc Vanadium Project. The company was incorporated in 2006 and is based in West Perth, Australia, with a market capitalization of $1.75 billion at the current price of $0.915 per share.

Financial & Operational Highlights - On 2^nd August 2021, the company announced to pay Ramelius Resources Limited (“Ramelius”) $30.25 million to terminate the Kathleen Valley Royalty held by Ramelius, to reap the benefits by increasing the production rate or the spodumene concentration price at Kathleen Valley. Further, on 5^th July 21, the update states the potential new growth drilling targets identified at 100% owned Buldania Lithium Project, WA, as per the recent soil sampling suggests the presence of strong lithium mineralization.  On the financial front, the company failed to receive any operating revenues for the full year ending June 30, 2021 and recorded cash outflows from operating activities of $2.67 million for the quarter ending on 30^th June 2021. As of 30^th June 21, the cash balance was dipped to $12.55 million compared to the previous quarter ending on 31^st March 21 of $15.20 million.

Technical Analysis- The stock showed a strong uptrend and printed the lifetime hights of $0.975 and hovering around the highs. The Relative Strength Index is currently showing a reading of 66.23, which is in the upper end of the trading zone, indicative of further upside from current levels. The 21 Days Simple Move Average is placed below the stock price at $0.828, implying more bullishness to the stock. for the trend to remain intact, the prices should not dip below the support of $0.75. Since the prices are at the lifetime high, hence the resistance is not viable on the charts.

Missing operating revenues, declining cash balances, volatile commodity prices and life-time high prices makes the stock expensive. We give ‘Expensive’ rating and suggest investors to wait for a better entry level on the stock at the closing price of $0.915, down by 1.08%, as of 2^nd August 2021.

Daily Technical Chart – LTR

Source: REFINITIV

Neometals Limited - (ASX: NMT)

NMT is a mineral project developer. The Company’s segments include Lithium, Titanium and Vanadium, and Others. The Company’s projects include Mount Marion Lithium Project, Lithium Hydroxide Project (ELi Process), Alphamet, Barrambie Titanium Vanadium Iron Project (Barrambie Titanium) and Forrestania Nickel Project. The company was incorporated in 2001 and is based in West Perth, Australia, having market capitalization is $361.92 million, at the current price of $0.655 per share.

Financial & Operational Highlights - As per the quarterly activities report, released on 30^th July 2021, the advance talks to demerge the Mt Edwards nickel assets into a separate company with a prospect of future liting across the Australian bourses. The company preparing to list itself on London Stock Exchange, aking a strong footprint globally. Further, Primobius ( JV between Neometals and SMS group)  the battery recycling ‘demonstration’ plant was started in Hichenbach, Germany. On the financial front, the company did not receive any cash receipts from the customer for the previous two quarters, ending on 30^th June 2021. The cash balance as of 30^th June 21, was increased to $98.18 million as compared to the previous quarter ending on 31^st March 21 of $67.47 million.

Technical Analysis- The stock showed an uptrend and reached the near-term highs of $0.655, and currently resting at those levels.  The stock made a gradual upmove, without any abnormal spike or drawdowns, depicting a strong trend formation with higher support levels into the formation at very breakout. The relative strength Index is currently showing he reading of 67.79, which is at the upper range of the zone, implying more upside remaining for the stock to continue. Another trend confirmation indicator, the 21 Days Simple Moving Average is placed vastly below the stock prices at $0.533, giving further confirmation to the existing bullish trend into existence. The support for the current trend is at $0.55 and the resistance is at $0.72. Breaking either side of the range will give a clear picture of the trend formation.

Lack of operating revenues, volatile commodity prices, and rising stock prices, which decouples from its fundamentals, we suggest investors to 'Avoid’ the stock at the closing price of $0.655 per share, down by 0.76%, as of 2^nd Auguest 2021.

Daily Technical Chart – NMT

Source: REFINITIV

Korvest Limited (ASX: KOV)

KOV is engaged in hot-dip galvanizing; sheet metal fabrication; manufacture of cable and pipe support systems and fittings; design and assembly of access systems for mobile equipment, and sale, repair and rental of high torque tools. The Company operates through two segments: Industrial Products and Production. The company was incorporated in 1970 and is based in Kilburn, Australia, with a market capitalization of $73.23 million, at the current price of $6.45 per share.

Financial & Operational Highlights- On 23^rd July 2021, the company announced its full-year statutory accounts for the FY21, stating the increase in revenues by 10.6% to 69.79 million as compared to the similar quarter ending on 30^th June 2020 of $63.09 million. The staggering growth in EBIT(Earnings Before Interest & Taxes) was recorded at 52.1% to $8.88 million. Because of covid 19, the company faced increasing shipping costs, increasing inventories and the severe impact of commodity prices, pulled down the cash from operations by 37% to $6.51 million. To manage the business operations and expansionary activities, the cash and investment balance was increased by 4.5% to $7.0 million in 2H FY21 ending on 31st June 2021.

Technical Analysis- The stock showed a continuous uptrend, after recent bottoming out, with a few drawdowns in the prices and heading towards the Noth. Currently, the stock is in the vertical steep trend and trying to match the previous highs. The Relative Strength Index is currently showing a reading of 81.31, which is in the upper zone of the trading zone, suggesting further potential upside for the prices from current levels. The 21 Days Simple Move Average is placed below the stock's closing price at $5.748 indicating more upside remaining in the prices from these levels. The support is placed at $4.89 which can bring further buying interest among the investors, and the resistance is placed at $7.02, bringing the sellers to the front step.

Recent positive updates on the financials, volatile commodity prices, risk of COVID 19 on business, along with rising prices, makes the stock ‘Expensive’, thereby we suggest investors to wait for a better entry level. We give an ‘Expensive’ rating on the stock at the closing price of $6.450 per share, up by 0.78%, as of 2^nd August 2021.

Daily Technical Chart – KOV

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.

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