Si6 Metals Limited

Si6 Details

Results from MADD0153 At Maibele Project: Si6 Metals Limited (ASX: SI6) is engaged in the mining and exploration operations targeting projects of “battery or new world” metals. SI6 is operating the Maibele project (Botswana) and has entered an option agreement to acquire the Monument Project (MGP). As of 22 March 2021, the market capitalisation of the company stood at ~$26.46 million. SI6 recently announced the assay results from the diamond drilling of the MADD0153 hole at its Maibele project in Botswana. The hole was drilled ~50 metres to the northeast, and nickel sulphide deposits were located ~200 metres below the Maibele North’s bottom. The results demonstrate the massive potential for further exploration at depth below the complete 1.4km strike of the Maibele North resource.

Drilling Results Confirm Branded Iron Formation (BIF): The company reported preliminary results from the first nine holes of the drill program consisting of 34 holes in total at the Monument Gold Project (MGP). All the holes drilled touched planned target depths. SI6 is expecting the results of further 25 holes in another few weeks. SI6 has discovered several broad gold mineralisation zones at Korong and Waihi prospects.

A Look at the Half-Yearly Results: During 1HFY21, SI6 planned for one deep diamond hole MARD0094 at Maibele North. Its assay results reflected a significant intersection with nickel sulphide deposits. During the period, SI6 also undertook polarization surveys at Dibete and Airstrip prospects at the Maibele project and sampling at the Majante project. At the MGP, the company planned reverse circulation drilling programs at Waihi and Korong prospects to be undertaken in early 2021. During 1HFY21, SI6 raised $0.96 million via the issue of 160 million ordinary shares at $0.06 per share under a share placement. It raised another $1.44 million via 240 million ordinary shares at the same price under the share purchase plan (SPP). SI6 incurred a net loss after tax of $1.09 million for 1HFY21. The company held a cash and cash equivalent balance of $5.61 million as of 31 December 2020.

1HFY21 P&L Highlights (Source: Company Reports)

Key Risks:  The company is exposed to the risks of mining and exploration, discovering the resource estimates, seeking capital for drilling, and working capital needs, and regulatory approvals for timely drilling on the projects. 

Outlook: At Korong and Wahi prospects, the company has planned resource modelling based on the drill results received to prepare for the updated mineral resource estimates.

Stock Recommendation: The stock of SI6 gave a positive return of 12.5% in the past six months and a positive return of 350% in the past nine months. The stock is trading lower than the average 52-week price level band of $0.001 and $0.046. The stock of SI6 has a support level of ~$0.014 and a resistance level of ~$0.025. Considering the current trading levels, significant returns in the past 9 months and one year, assay results received from drilling at the MGP and the Maibele project, low debt levels, and decent cash position and associated risks of the pandemic and exploration results, we give a ‘Speculative Buy’ rating on the stock at the current market price of $0.018, down by 5.264% on 22 March 2021.

SI6 Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Ausmon Resources Limited

AOA Details

Drill Exploration Update: Ausmon Resources Limited (ASX: AOA) is an exploration firm engaged in the mining of gold, copper, silver, and other base metals. As of 22 March 2021, the market capitalisation of the company stood at ~$9.03 million. AOA recently provided an update on its field exploration undertaken within the tenements Porcupine Prospect EL 8747 Stirling Vale and Eaglehawk Prospect EL 8745 Kanbarra. The company collected 222 soil samples along E-W 100 metres spaced lines and 23 samples of rock for gold and multi-elements analysis. It is compiling the results from both the samples and will publish at the earliest. At Eaglehawk Prospect, AOA planned for reverse circulation diamond drill for four holes to identify the chargeability targets. It completed drill exercise at one-hole, extended drill at the second one and has two holes under completion. AOA will select the drill samples, send them to the lab for gold and multi elements analysis and then declare the results.

McAlpine ELA 6242 Registered, NSW: AOA notified the investors of the registration of the new 14 block tenement (“McAlpine”) under ELA 6242 by the Department of Primary Industry (DPI). With this registration, the block will have an expanded reach to Brungle Creek EL 8954, a region identified with potential for Cobalt, Copper, Chromite, Gold and Nickel.

1HFY21 Result Highlights: The company received revenue and interest income of $10.4k for 1HFY21. AOA incurred a net loss after tax of $357k during the reporting period. In December 2020, AOA received drilling results of ten holes at the Synform West Prospect at the Stirling Vale EL 8747, Broken Hill (100%). It confirmed gold and zinc intersections at SVRC006, SVRC003-SVRC010. At Kanbarra EL 8745, Broken Hill (100%) conducted a ground IP survey to discover base metal sulphide mineralisation at a depth of 300 metres. At Koonenberry EL 6400, AOA carried out no fieldwork though several exploration options are under consideration. The company has applied for the EL renewal in March 2021. At Pooraka ELs 8424 and 6413, AOA decided to relinquish control post assessing their risks versus exploration potential benefits.

During 1HFY21, AOA raised $300k via the issuance of 40 million fully paid ordinary shares at $0.075 per share through private placement. It raised another $218k in October 2020 via the issuance of 29.12 million shares at $0.075 per share under a share purchase plan. As of 31 December 2020, AOA held $447k of cash and cash equivalents. 

1HFY21 Result Highlights (Source: Company Reports)

Key Risks: The company is exposed to the risk of discovering the resource estimates, volatility in the prices and demand of zinc, copper, and gold. It faces the risk of the ongoing market uncertainty and government-mandated restrictions on the continuity of its projects.  

Outlook: At Koonenberry EL 6400, AOA is evaluating options to undertake exploration and awaiting the EL’s renewal. At Porcupine Prospect EL 8747 Stirling Vale and Eaglehawk Prospect EL 8745 Kanbarra, AOA is waiting for the compilation of results and will send them to the laboratory testing of gold and multi-elements.

Stock Recommendation: The stock of AOA gave a positive return of 200% in the past three months and a positive return of 500% in the past nine months. The stock is currently trading towards its 52-weeks’ high level of $0.013. The stock of AOA has a support level of ~$0.011 and a resistance level of ~$0.013. On a TTM basis, the stock is trading at a price to book value multiple of ~8.2x higher than the industry (Metals & Mining) median of ~2.7x, thus seems overvalued. Considering the current trading levels, significant returns in the past one month and three months, and valuation on a TTM basis, we believe that most of the positives have been factored in at the current juncture. Hence, we suggest investors wait for better entry levels, and we give an ‘Expensive’ rating on the stock at the current market price of $0.012 on 22 March 2021.

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

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