ioneer Ltd

INR Details

Completes $80 Million Placement: ioneer Ltd (ASX: INR) is an emerging lithium-boron producer that owns Rhyolite Ridge Lithium-Boron Project located in Nevada. The company completed a fully underwritten institutional placement to raise A$80 million. Initially, the company had announced A$60 million placement. However, due to overwhelming demand, the placement was upsized by A$20 million. The proceeds from the placement will be used for the construction of the 100% owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA.

Partnership with Caterpillar: In October 2020, the company signed a partnership with Caterpillar, a leading manufacturer of construction and mining equipment, as an exclusive heavy equipment partner for its Rhyolite Ridge Lithium-Boron Project in Nevada. As per the terms of the partnership, Caterpillar is expected to offer finance solutions for the equipment through Caterpillar Financial Services. On 16 February 2021, the company announced the completion of a joint automation study conducted with Caterpillar and the Cat dealer for Nevada, Cashman Equipment Company. The study demonstrated the viability of AHS at the mine and the proposed application of AHS could positively impact the overall cost structure of the operations.

A Quick Look at the Financials: For the year ended 30 June 2020, the company had reported a net finance income of A$2.8 million. Net loss for FY20 stood at A$5.4 million. During the December 2020 quarter, the company spent A$5.9 million on investing activities and A$1.7 million on operating activities. As on 31 December 2020, the company had cash of A$19.8 million.

FY20 Results (Source: Company Reports)

Key Risks: The company is exposed to the risks and uncertainties caused by the COVID-19 pandemic. The company’s revenue is exposed to fluctuations in the prices for the minerals it produces, including the price of lithium carbonate and boric acid. The company is also exposed to the foreign exchange currency risk.

Outlook: With the completion of $80 million Placement, the company seems well placed to execute on project advancement at Rhyolite Ridge over the course of 2021. The company expects to receive the final permits to commence construction of the Rhyolite Ridge Lithium-Boron Project in the fourth quarter of 2021.

Stock Recommendation: The stock of INR has provided a return of 315% in the last six months and is currently trading above the 52-weeks’ price band of $0.072 and $0.490. On the technical analysis front, the stock has a support level of ~$0.378 and a resistance of ~$0.48. Considering the absence of revenue from core operations, track record of incurring net losses, negative ROE, and current trading level, we give an “Avoid” rating on the stock at the current market price of $0.415, up by 9.210% as on 08 March 2021.

INR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Magnis Energy Technologies Limited

MNS Details

Key Appointments at iM3NY: Magnis Energy Technologies Limited (ASX: MNS) is a producer of next-generation green credentialed Lithium-Ion Battery (LIB) cells. On 5 March 2021, the company announced several key appointments at Imperium3 New York (iM3NY) to lead production at New York Lithium-ion Battery Plant. Notably, the company has hired Mr. Chaitanya Sharma has CEO and Mr. Bill Shannon as Chief Operating Officer (COO) of the company.

Completes $34 million Placement: In February 2021, the company completed a heavily oversubscribed A$34 million placement to fast-track development of NY Battery Plant. Further, it will help the company in bringing the iM3NY plant into production in 2021.

A Look at the Key Financials: For the year ended 30 June 2020, the company had reported total income of $851.88k and total expenditure of $8.23 million. Net loss for FY20 stood at $7.37 million, up from $5.54 million in FY19. During December 2020 quarter, the company spent $1.17 million of cash on operating activities and $418k on financing activities. As at 31 December 2020, the company had cash of $5.04 million.

FY20 Results (Source: Company Reports)

Key Risks: The company is exposed to the risk and uncertainties caused by the COVID-19 pandemic. The company is also exposed to supply chain risk. It is also exposed to the risk associated with general business, economic, competitive, political, and social uncertainties, the actual results of current exploration activities and feasibility studies.

Outlook: Looking ahead, the company is focused on developing Gigafactories globally with key alliances and JV partners. Further, it is also focused on maintaining a competitive advantage through unique IP. With its recently completed $34 million Placement, the company is well placed to fund the development of NY Battery Plant.

Stock Recommendation: Over the last three months, the stock has provided a return of 56.75% and is currently trading higher than the average 52-weeks’ price level band of $0.047 and $0.425. On the technical analysis front, the stock has a support level of ~$0.268 and resistance of ~$0.355. Considering the company’s price performance in the last three months, and current trading level, we are of the view that most of the positive factors are discounted at current juncture. Hence, we suggest investors to wait for better entry level, and give an “Expensive” rating on the stock at the current market price of $0.290, down by 4.919%, as on 8 March 2021.

MNS Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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