Archer Materials Limited

AXE Details

Patent Granted for Computing Chip - Archer Materials Limited (ASX: AXE) is a materials technology company, involved in developing and commercializing innovative deep tech, including quantum computing. AXE has been developing a computing qubit processor chip (12CQ Quantum) for which they have received a patent grant from Japan. This will give company access to the high-value Japanese market for the 12CQ chip.

Positive Cash Flows: AXE has posted a significant increase in its cash position. The cash at the end of FY20 stands at A$8.1mn in FY20 as compared with A$0.69mn in FY19 and there is no corporate debt on company’s balance sheet. The cash balance at the end of December 2020 quarter stood at $6.93mn.

Quarterly Activity Reports: During the December quarter, the South Australian Government approved the Programme for Environment Protection and Rehabilitation (PEPR). The company has received $0.238mn from ATO for R&D tax incentive for the year ended 30 Jun 2020. Operating cash outflow stood at $452k. At the end of December 2020 quarter, the company had no debt on its balance sheet and had $6.93mn of cash balance.

Operating Cash Outflow (Source: Company Reports)  

Outlook: The company has increased the hiring of technology and expect it to continue in 2021. The company is expecting to continue sell mineral exploration projects to fund Advanced Materials Business and conduct their activities cost efficiently.

Stock Recommendation: Quantum has collaborated with leading AI firm Max Kelsen to carry out the development of Quantum Computing Processor (Chip). In the last 1 month, the stock of AXE has provided a return of 46.29%. The stock is currently trading above the average 52-week price level range of $0.120-$0.980. On the technical analysis front, the stock has a support level of ~$0.676 and resistance of ~$0.869. We are of the view that most of the positive factors of the company have already been discounted in the price presenting a limited upside in the stock at the current juncture. We, therefore, give an “Expensive” rating on the stock at the current market price of $0.790, down by 1.864% as on 11 Feb 2021, and suggest investors to wait for better entry levels.

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

Corazon Mining Limited

CZN Details

Quality Projects Operational: Corazon Mining Limited (ASX: CZN) is engaged in the exploration of nickel, copper and gold, and development of mining activities. The Company operates through two segments: Australia and Canada. CZN has secured complete ownership of Prolific Nickel Mining Centre and Prospective Exploration Ground at Lynn Lake in Canada to explore Nickel, Copper and Cobalt. Another project the company is having at Mt Gilmore, New South Wales is going to explore Copper, Cobalt and Gold.

Lynn Lake Project Details (Source: Company Reports)

Mining Commencement at Lynn Lake: A new phase of drilling has commenced at the Lynn Lake Project in Manitoba, Canada to test newly identified geophysical conductors to the west of the Fraser Lake Complex (FLC).

Outlook: The company has a large resource base with growth potential going forward and an exciting brown-fields and regional exploration has strong potential for further discoveries. 

Stock Recommendation: In the last one month, CZN has increased by 10.0% and decreased by 8.33% during the last 3 months on ASX. The stock is currently trading below the average 52-week price level range of A$0.019-$0.100. On the technical analysis front, the stock has a support level of ~$0.04 and resistance of ~$0.0.08. Considering negative net margins, negative ROE, market volatility, and low market capitalization, we give an “Avoid” rating on the stock at the current market price of $0.059, up by 13.461% as on 11 Feb 2021, owing to the update regarding the commencement of drilling at Lynn Lake Project. 

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

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