Tietto Minerals Limited

TIE Details

High-Grade Gold Results Identified: Tietto Minerals Limited (ASX: TIE) is engaged in the development and exploration of gold projects in the Ivory Coast and Liberia. On 26 November 2021, T. Rowe Price Associates, Inc has become a substantial holder in the company with a voting power of 5.16%. In addition, the company has identified high-grade gold results from both the sixth batch of infill, step-out and extensional drilling finished at the Abujar-Gludehi (AG) deposit, which is part of its 3.35Moz Abujar Gold Project in Côte d’Ivoire, West Africa.

Secured Significant Funding:

• As announced on 22 November 2021, the company’s Abujar Gold Project is fully financed to initiate gold production in CY2022, which follows a successful A$85 million two-tranche placement at A$0.39 per share. The company is working for first gold at Abujar in Q4 CY22 and financed to continue exploration to grow gold resources with additional working capital.
• TIE also secured a debt funding of up to US$140 million to build the Abujar Gold Project in Côte d’Ivoire, West Africa.

Q1FY22 Financial Summary:

• During the quarter ended 30 September 2021, TIE made e excellent progress on the development of its Abujar Gold Mine. The company added that Abujar has the capacity to deliver annual average gold production of over 200,000 ounces per annum over the first six years of production, underpinned by ore reserves of 1.45Moz.
• The company wrapped up a definitive feasibility study (DFS) for Abujar Gold Project and as per the study.
• The company seems well-financed with a cash balance of ~ A$32.8 million as on 30 September 2021.

Cash Balance (Source: Analysis by Kalkine Group)

Key Risks:

• Gold Price Risk: The company’s business is sensitive to the adverse price movement of gold, and as a result, operational and financial health could be under threat.
• Climate Risk: TIE is exposed to a risk arising from the change in climate, which could pose a temporary suspension to the mining and drilling.

Outlook:

• Abujar project is likely to report gold production of 260,000oz in the first year of production (30% increase over the PFS) at an AISC of US$651/oz.
• By the end of December 2021, the company is planning to exercise A$10 million in option premium.

Technical Note: TIE stock prices are trading above the horizontal trend line support zone at AUD 0.392 on the weekly chart and taking the support of the same. Moreover, prices are trading above 21-period SMA and 50-period which may act as a crucial support level for the stock. The momentum oscillator RSI (14-period) is trading at ~55.69 levels, indicating bullish momentum. An important support level for the stock, is placed at AUD 0.360 while the key resistance level is placed at AUD 0.530

Stock Recommendation: The company seems very well positioned to advance its dual strategy into 2022, wherein it would continue to drive rapid resource growth at the 3.35Moz Abujar Gold Project. The stock of TIE has a 52-week low and high levels of $0.285 - $0.485, respectively. Considering the indicative upside in valuation, deleveraged balance sheet, 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 closing price of $0.420, down by ~3.449% as on 01 December 2021.

TIE Weekly Technical Chart, Data Source: REFINITIV  

Tempus Resources Ltd

TMR Details

Received Assay Results: Tempus Resources Ltd (ASX: TMR) is a growth-orientated gold exploration company, which is actively exploring projects located in Canada and Ecuador. As announced on 24 November 2021, the company has received first assay results after the follow-up drill-hole on the Blue Vein (drill-hole EZ-21-19) in the vicinity of the ‘bonanza’ grade discovery hole; the results indicated high- grade mineralisation continues down dip.

• TMR added that assay results have now been received for three drill holes which intersected the Blue Vein located approximately 150 metres NW of the SW Vein.
• TMR has halted drilling at Elizabeth for the season due to the pending approval of the Notice of Work amendment for extension of the Lower Portal adit access for underground drilling.

Q1FY22 Financial and Operational Summary:

• During the quarter, the company finished a private placement of A$6.28 million by issuing 24.99 million shares at an average issue price of A$0.251 per share comprised of two tranches (Canadian flow-through shares and ordinary tranche).
• TMR would use funds from Canadian flow-through shares to complete the ongoing 12,000 metre drilling program at Elizabeth, and funds raised from the ordinary tranche would be deployed for expenditure on its Ecuador projects and for general corporate purposes.
• The company recorded a loss of $615,357 as compared to $295,075 in the quarter ended 30 September 2020. As a result, basic loss per share rose to -0.56 cents against -0.40 cents in Q1FY21.

Loss Trend (Source: Analysis by Kalkine Group)

Key Risks:

• Commodity Price Risk: The company is exposed to a risk arising from the uncertainties in the prices of gold, and it can leave a major impact on its top line and bottom line.
• Regulatory Risk: TMR is exposed to a more complex regulatory environment; any failure in the compliances could lead the business to fines, penalties, etc.

Outlook: With respect to Blackdome Gold Mine, the company has drilled 5,000 metres at Blackdome in 2020 and completed an alteration study, which indicated potential for new discoveries. The company has planned further drilling in 2022.

Technical Note: TMR stock prices are hovering around the downward sloping trend line support zone and continuously taking support of it on the weekly chart. Moreover, the momentum oscillator RSI (14-period) is trading near an oversold zone at (~34.41 level), which indicates the possibility of rebound in the stock from the current levels However, prices are trading below 21-period SMA and 50-period which may act as a resistance level for the stock. An important support level for the stock, is placed at AUD 0.100 while the key resistance level is placed at AUD 0.165.

Stock Recommendation: At the end of Q1FY22, the company had a cash balance of ~A$4.34 million. The stock of TMR is trading below its 52-week low-high average of $0.115 - $0.310, respectively. The stock has been corrected by ~24.24% and ~41.86 in the past one month and three months, respectively. Considering the indicative upside in valuation, attractive assay results, recent capital raising, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the closing price of $0.125 as on 01 December 2021.

TMR Weekly Technical Chart, Data Source: REFINITIV 

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

Note 2: Investment decision 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 Valuation has been achieved and subject to the factors discussed above.

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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.