Stocks’ Details
Firefinch Limited
Drilling Commences at Morila: Firefinch Limited (ASX: FFX) is engaged in the exploration and development of minerals. As on 16 November 2020, the market capitalization of the company stood at ~$125.10 million. The company has recently purchased a stake of 80% of Morila from AngloGold Ashanti Limited and Barrick Gold Corporation for a consideration of $28.8 million. The company has also started the drilling of 45 drill holes for 675 metres of shallow air core at the Morila mine site. The company expects to infill a diamond drill rig for extensions to the main Morila deposit.
Quarterly Activities (For period ending 30 September 2020): During the September 2020 quarter, the company delivered on the Goulamina Lithium Project and reported mineral resources of 108.5 million tonnes with a minimum mine life of 23 years. As of 30 September 2020, the company reported a cash balance of $6.028 million and raised $73.8 million of capital via the Placement and SPP. During the quarter, the company used $193k for operating activities.
Quarterly Cash Flow Activities (Source: Company Reports)
Stock Recommendation: The company retains a decent regional exploration potential with a footprint of 685km2 in a prolific gold district. As per ASX, the stock of FFX is trading slightly above the average 52-weeks’ levels. The stock of FFX gave a return of 6.66% in the past three months but a negative return of 15.78% in the last one month. On a technical front, the stock of FFX has a support level of ~$0.112 and a resistance level of ~$0.237. On a TTM basis, the stock of FFX is trading at a price to book value multiple, the stock of FFX is trading is a price to book value of 4.8x, higher than the industry median (Basic Materials) of 2.6x, and thus seems overvalued. Considering the current trading levels, volatile returns in the past one month, falling interest income, and acquisition of Morila gold mine, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the current market price of $0.16 on 16 November 2020.
Ironbark Zinc Ltd
Structural Geology Review confirms potential at Fiery Creek: Ironbark Zinc Ltd (ASX: IBG) is engaged in the exploration of gold and base metals. As on 16 November 2020, the market capitalization of the company stood at ~$17.48 million. The company has recently identified two major structural features, wherein the Fiery Creek structural setting appears like the Ballarat East deposit. The tectonic grain at Fiery Creek generally trends North-South and has identified five initial high priority drill targets from the preliminary review.
IBG Receives LOI from US Governments Export-Import Bank: The company has recently completed execution of a Letter of Interest with the Export Import Bank of the United States (EXIM), wherein EXIM is able to consider financing up to ~US$216.12 million with a maximum loan term of 8.5 years.
Quarterly Highlights: During the quarter ended 30 September 2020, the company announced ore reserve of 21.3Mt @6.3% Zn for the underground deposit at Citronen. The company has also announced the completion of Phase I of a metallurgical review of the historic test work and process flowsheet for Citronen, wherein the previous test work was confirmed to be of high quality. As on 30 September 2020, the company reported a cash balance of $1.87 million and used $52k for operating activities.
Quarterly Cash Flow Activities (Source: Company Reports)
Stock Recommendation: The company is focused on updating the development plan for its flagship asset and has started various new initiatives for its growth pipeline. As per ASX, the stock of IBG is slightly above the average 52-weeks’ levels and retains limited potential for further growth. The stock of IBG gave a return of 66.66% in the past three months and a return of 53.85% in the last one month. On a technical front, the stock of IBG has a support level of ~$0.012 and a resistance level of ~$0.027. Considering the current trading levels, negative operating cash flows, and volatile market conditions due to the global pandemic and subsequent restrictions, we suggest investors to keep an eye on the business activities and give an ‘Avoid’ rating on the stock at the current market price of $0.02, up by 5.263% on 16 November 2020, owing to the announcement related to the discovery of two major structural features at Fiery Creek.
Cyprium Metals Limited
Decent Platform for Growth: Cyprium Metals Limited (ASX: CYM) is engaged in the exploration and development of minerals. As on 16 November 2020, the market capitalization of the company stood at ~$15.06 million. The company is building a mid-tier Australian copper mining business and expects a decent increase in drilling programmes. The company has recently announced the mobilization of a diamond drill rig to the Nanadie Well Copper-Gold Project and expects to start drilling with the 1,700 metre Phase 1 drilling programme in December 2020.
Quarterly Activities (For the Period Ended 30 September 2020): During the quarter ended 30 September 2020, the company reported a healthy balance sheet with cash at bank of $0.6 million. It also secured a placement of $5.0 million during October 2020. During the quarter, exploration expenditure on a cash basis was $423k and used cash of $192k from operating activities.
Quarterly Cash Flow Activities (Source: Company Reports)
Stock Recommendation: The company retains decent copper background in the tenement position and is planning to start and complete its geophysics by December 2020. As per ASX, the stock of CYM is inclined towards its 52-weeks’ high levels of $0.310 and thus retains limited potential for further growth. The stock of CYM gave a return of 34.37% in the last three months and a return of 30.30% in the past one month. On a technical front, the stock of CYM has a support level of ~$0.126 and a resistance level of ~$0.289. Considering the current trading levels, rising losses, and softer market conditions, we suggest investors to wait for a better entry level and give an ‘Expensive’ rating on the stock at the current market price of $0.215 on 16 November 2020.
Daily Comparative Chart (Source: Refinitiv, Thomson Reuters)
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