Core Lithium Ltd

CXO Details

Gold Mineralization Confirmation at Bynoe Gold Project: Core Lithium Ltd (ASX: CXO) is engaged in the exploration of lithium, copper, and uranium. CXO is developing lithium projects near Darwin port in Australia. CXO has recently confirmed gold mineralization at its Bynoe Gold Project beneath 100-150m wide and 1.6km long series of sulphide-rich, gold bearing quartz veins. CXO is well-funded to recommence an expanded lithium and gold exploration program in the second quarter of 2021.

December 2020 Quarter Highlights: During the quarter, the company was focused on a number of initiatives aimed at further enhancing the value and potential of its wholly owned Finniss Lithium Project, located near Darwin in the Northern Territory. Over the quarter, the company completed a lithium resource infill and expansion program at Finniss and advanced the prospectivity of its portfolio of gold assets in the NT. With a cash reserve of $4.53 million at the end of December 2020 quarter, the company seems well funded to achieve its short-term and medium-term objectives.

Cash Balance (Source: Company Reports) 

Supply Contract with Tesla: As per the company reports, Tesla has signed a five-year LiOH supply deal with Yahua which is CXO’s largest shareholder and lithium offtaker. Further, CXO has binding offtake with Yahua for almost 40% of CXO’s production of 1,75,000 tpa. CXO also has an agreement to export 250ktpa of spodumene concentrate to Darwin Port, nearest Australia’s port to China.

Exercising an Option: As per the company reports on 19 February 2021, CXO has issued 3,273,810 at an issue price of $0.053 per share through exercising its option.

Outlook: In 2021 resource expansion drilling is likely to accelerate LOM growth and an increase in production capacity. CXO is expecting higher mineral resources and ore reserves. 

Stock Recommendation: In the last one month, CXO has corrected by 30.76%. However, over the last three months the stock has risen by around 301.78%. The stock is currently trading lower than the average 52-week price level range of $0.013-$0.420. On the technical analysis front, the stock has a support level of ~$0.196 and resistance of ~$0.251. Considering the company’s negative ROE, absence of revenue from core operations, track record of incurring net loss, we give an “Avoid” rating on the stock at the current market price of $0.225, down by 6.250% as on 24 February 2021.

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

Renascor Resources Limited

RNU Details

Joins European Battery Alliance (EBA): Renascor Resources Limited (ASX: RNU) is engaged in the exploration of copper, gold, uranium, and other minerals in Australia. The Company's projects include Siviour Project, Marree Project, Olary Project, Arno Bay, Eastern Eyre and Carnding Project. As per the recent company report, RNU has become a part of the European Battery Alliance (EBA) that will allow RNU’s Siviour Battery Anode Material Project to supply purified spherical graphite, which is utilized to produce electric vehicle battery anodes. Siviour is the largest graphite reserve outside Africa and second largest proven graphite reserve globally. The company’s acceptance into the EBA strengthens the position of the Siviour Battery Anode Material Project as a potential future supplier to the European market of the Purified Spherical Graphite.

Graphite Reserves (Source: Company Reports)

MOU with Zeto: RNU has entered in an MOU with Zeto for the supply of up to 10,000 tpa of PSG over a period of ten years to Zeto. RNU has non-binding offtake agreements in place for up to 20,000 tpa which is equivalent to two-thirds of RNU’s planned annual PSG production capacity of 28,000 tpa.

Outlook: As per the company report on 19 January 2021, Induced Polarization (IP) survey has confirmed a large, shallow chargeability anomaly at Renascor’s Soyuz prospect in Central Gawler Craton in South Australia. RNU is considering a planned drilling at Soyuz with IP anomaly. Going forward, RNU is expecting a higher demand for purified spherical graphite on the back of higher demand for electric vehicles and utilization of lithium-ion batteries in electric vehicles. RNU is planning to implement its HF-free purification technology for its ongoing and future projects for a competitive advantage in the production of high-quality PSG with environmental credentials.

Stock Recommendation: In the last one month, the stock of RNU has provided a return of 89.28%. In the last three months, the stock has provided a return of 341.66%. The stock is currently trading higher than the average 52-weeks price level range of $0.004 and $0.071. On the technical analysis front, the stock has a support level of ~$0.035 and resistance of ~$0.07. Considering RNU’s current trading level, negative ROE, decline in revenue, track record of incurring net loss, we give an “Avoid” rating on the stock at the current market price of $0.053, up by 12.765% as on 24 February 2021, owing to the update regarding the joining the European Battery Alliance.

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

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