Sayona Mining Limited (ASX: SYA)

SYA is a lithium-focused mining & exploration company with assets in Australia and overseas. Its flagship project includes Authier Lithium Project in Quebec, Canada, and Tansim Lithium Project in Canada. SYA was listed in ASX on March 30. 2004.

Financial & Operational Update: As highlighted in the recent quarterly activities report, SYA advances scoping studies at its North American lithium project and is expecting to restart the production of spodumene concentrates from the first quarter of 2023. It had announced a major drilling program plan at its Moblan project to expand its lithium resources base. A definitive feasibility study is underway with the production of spodumene concentrate from the nearby Authier project. On the Tansim Lithium project, SYA is planning for a 26-hole drilling program for 4,200m. During the quarter ending December 31, 2021, SYA raised $100 million from sophisticated investors. Besides, it is seeking to raise $25.5 million through rights offer. It had closed the quarter period with a cash balance of $28.47 million.

In FY21, SYA narrowed down its losses to $4.38 million as compared to $5.40 million in FY21. The basic EPS reached -$0.13 in FY21 vs. -0.26 in FY20.

Technical Analysis: SYA prices are currently trading in a short-range between AUD 0.11 and AUD 0.155. Prices have recently taken support of the lower band of the sideways range and trying to move up from lower levels indicates bullishness in the stock in the coming period. RSI (14-period) is trading at ~44 on a daily chart that indicates indecision in the stock prices. Immediate support levels are AUD 0.11 and AUD 0.100 while immediate resistance levels are AUD 0.155 and AUD 0.170.

While incorporating the support and resistance in analysing the investment opportunity, the investors with a high-risk appetite might consider a ‘Speculative Buy’ position on this scrip considering the rights offer, upcoming major drilling plan at its Moblan project to expand its lithium resources base, definitive feasibility study at its Authier project, and current trading levels. The stock was analysed as per the current market price of AUD 0.125 as of 1^st February 2022, 12:39 PM (GMT+10), Sydney, Eastern Australia. However, the risk levels are extremely high considering the operating cash outflows and the risk of technological advancements.

Daily Technical Chart – SYA

Source: REFINITIV 

Note: The purple color line in the chart depicts RSI (14-period). The green and blue-color lines show 21-Period SMA and 50-Period SMA, respectively

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 for 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 is 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 the 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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