Cyprium Metals Limited

CYM Details

First Assay Results Received: Cyprium Metals Limited (ASX: CYM) is engaged in the exploration and development of minerals. Recently, the company has released the first round of assays received from the 2021 RC drilling campaign at the Maroochydore Copper – Cobalt Project.

• The RC drillhole programme comprised 46 resource definition and extension holes (5,990m) and 4 water bores (228m) for a total of 6,218 metres.
• The company received results from 19 holes, which targeted oxide, supergene and transitional mineralisation at the project with numerous holes extending into fresh basement rock.

Q4FY21 Financial and Operational Highlights:

• During the quarter ended 31 December 2021, the company received significant broad mineralised intersections of copper from both Nifty and Nanadie Well.
• CYM also received another set of fantastic drill results from the extensive copper deposit emerging at Nanadie Well.
• At the end of the quarter, the company had a cash balance of $25.5 million.

Cash Balance (Source: Analysis by Kalkine Group)

Key Risks: The company’s business is exposed to a risk arising from the adverse movement in the prices of the commodities. As a result, its financial health could be hampered. It is also exposed to a more complex regulatory environment; any non-compliance could lead the business to fines, penalties, etc.

Outlook: For March 2022 quarter, the company would be focused on Nifty Heap Leach Restart development with the objective of building an efficient long-term producing copper mine

Stock Recommendation: The stock of CYM is trading near to its 52-low level of $0.132, offering a decent opportunity for accumulation. The stock has been corrected by ~17.64% and 26.31% in the past one and three months, respectively. The stock is trading at a P/BV multiple of 0.8x as compared to the industry median (Basic Materials) of 2.6x on a TTM basis. Thus, it seems that the stock is undervalued at the current trading levels. Considering the valuation on a TTM basis, decent assay results, decent liquidity position, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.135 as on 17 February 2022 11:30 AM (GMT+10), Sydney, Eastern Australia.

CYM Daily Technical Chart, Data Source: REFINITIV  

Jupiter Mines Limited

JMS Details

Final Dividend by Tshipi: Jupiter Mines Limited (ASX: JMS) is engaged in the operation of the Tshipi Manganese Mine in South Africa and the sale of manganese ore. As announced on 17 February 2022, Tshipi é Ntle Manganese Mining Pty Limited declared a final dividend of ZAR500 million for the second half of the financial year ending on 28 February 2022. The company would receive ZAR237 million and would also receive ZAR30 million in marketing profits.

Q3FY22 Financial and Operational Highlights: For the quarter ended 30 November 2021 (Q3FY22), the company recorded production and sale of 909,510 and 845,421 tonnes, respectively.

• JMS achieved graded ore mining of 255,036 bcm, and overall total in-situ movement for the quarter was 2.9 million bcm.
• The company closed the quarter with a cash balance of $119.1 million as compared to $122.6 million as of 30 November 2020.

Cash Balance (Source: Analysis by Kalkine Group)

Key Risks:  JMS’s operational and financial could be impacted by the extreme change in climate, which may cause a temporary suspension to its operations. The company’s performance could also be impacted by an adverse change in the prices of commodities in which it deals.

Outlook: JMS expects an increase in Chinese steel production in the coming year, which may leave a favourable impact on manganese ore pricing and along with reducing freight costs.

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative) 

Source: Analysis by Kalkine Group

*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation: The stock of JMS is trading below its 52-week low-high average of $0.180 - $0.375, respectively. The stock has been corrected by ~20.37% in the past six months. The stock has been valued using a P/E multiple-based illustrative relative valuation and arrived at a target price of low double-digit upside (in % terms). The company can trade at a slight discount to its peers’ median P/E multiple, considering COVID-19 led uncertainties and inefficient use of shareholders equity, etc. For the purpose of valuation, peers such as Macmahon Holdings Ltd (ASX: MAH), Aurelia Metals Ltd (ASX: AMI), and DDH1 Ltd (ASX: DDH) have been considered. Considering the expected upside in valuation, nil debt to equity in 1HFY22, decent performance in Q3FY22, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.210, as on 17 February 2022 10:45 AM (GMT+10), Sydney, Eastern Australia.

JMS Daily Technical Chart, Data Source: REFINITIV 

Disclosure: Cyprium Metals Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices

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