Province Resources Limited

PRL Details

Entered Conditional Contract with Ozexco Pty Limited: Province Resources Limited (ASX: PRL) is engaged in the exploration of gold, copper, cobalt, vanadium, and nickel in Western Australia and Sweden. As on 18^th February 2021, the market capitalisation of the company stood at ~$110.98 million. On 17 February 2021, the company announced signing a conditional contract to acquire all shares in Ozexco Pty Limited. Upon completion of the contract, PRL will bring Gascoyne Project (for salt, potash, and mineral sands) and HyEnergy project (a renewable green hydrogen project) under its umbrella.

December 2020 Quarter Results: The company reported mining application for 3 exploration licences covering 950 square km in the Paterson province on its fully owned Paterson South project during Q2FY21. For its Gnama Nickel Project (100%), PRL has renewed interest in the Nova-Bollinger Mine (nickel) and Mawson discovery, in the Fraser Range. Historic drilling intersected oxide mineralisation (shallow) reflecting the potential for a sulphide source at depth. For Skåne Vanadium Project (SVP, 100%), the company undertook exploration work for recovering vanadium from the Dictyonema formation. However, it received an order from The Land and Environment Court at Växjö District Court which upheld PRL’s appeal against others. During Q2FY21, PRL spent ~$82,000 on exploration and evaluation activities. During the quarter, PRL carried out an entitlement and placement offer for $2 million capital, raised with 74.87 million shares issued at $0.008 price per share. PRL undertook a 1: 3 pro-rata entitlement offer (non-renounceable) of new shares to raise up to $1.5 million at $0.008. The company closed the quarter with $3.4 million of cash balance.

Net Cash Used in Operating Activities, Q2FY21 (Source: Company Reports)

Outlook: The company is planning exploration programmes for its Paterson South project in Q3FY21. PRL awaits the legal verdict to undertake the submitted work programs on SVP.

Stock Recommendation: The stock of PRL gave a return of 522.66% in the past three months and a return of 123.52% in the past six months. The stock is currently trading towards its 52-weeks’ high level of $0.145. The stock of PRL has a support level of ~$0.071 and a resistance level of ~$0.085. On TTM basis, we have valued the stock using the price to book value multiple of ~25.5x as compared to industry (Metals & Mining) median of ~3.2x. Considering the current trading levels, significant returns for the past 3 months and 6 months, and valuation on TTM basis, we believe that most of the catalysts are factored in at the current juncture. Hence, we suggest investors to wait for better entry level and give an ‘Expensive’ rating on the stock at the current market price of $0.077, down by 46.897% on 18^th February 2021.

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

Equus Mining Limited

EQE Details

Gold & Silver Found at Pegaso: Equus Mining Limited (ASX: EQE) is involved in the exploration and mining of gold and silver while operating its flagship project – Cerro Bayo Mine in Chile. As on 18^th February 2021, the market capitalisation of the company stood at ~$23.63 million. On 11 February 2021, the company reported notable maiden results from its diamond drill program currently in progress at the Pegaso II and III targets. The drilled hole confirmed the extension of high-grade mineralisation along strike from several previous high-grade intercepts.

December 2020 Quarter Results: During Q2FY21, the company estimated the Taitao pit resource and arrived at an inferred mineral resource estimate (MRE) of 302,000 equivalent ounces of gold based on historical drilling data. EQE also undertook a 10-diamond hole, stage 2 drilling program at Droughtmaster prospect for 2,029 meters. The results showed shallow and high-grade values for 7 of 10 holes drilled at the target, and improved results at hole CBD037 and CBD039A. During the quarter, the company incurred an expenditure on exploration and related activities of $896,700. EQE held cash and cash equivalents balance of $2.59 million as on 31 December 2020.

Net Cash Used in Operating Activities, Q2FY21 (Source: Company Reports)

Outlook: EQE has informed about the scheduled start of stockpile processing by Mandalay Resources at the Cerro Bayo project in late February 2021. It will initially process 40k tonnes per month via the commissioning of the Cerro Bayo plant in proximity to Taitao, the Pegaso II and III targets. EQE is also planning to restart mine studies by a III party consultant and plans to complete it during 1H21.

Stock Recommendation: The stock of EQE gave a negative return of 3.57% in the past one month and negative return of 28.94% in the past 6 months. The stock is currently trading slightly below the average of its 52-weeks’ price band of $0.004-$0.027. The stock of EQE has a support level of ~$0.011 and a resistance level of ~$0.016. On TTM basis, the stock is trading at a price to book value multiple of ~3x as compared to the industry average of ~2.6x. Considering the negative returns in the past 1 month and 6 months, absence of revenue from core operations/ projects, and net loss from FY16-FY20, negative ROE, we give an ‘Avoid’ rating on the stock at the current market price of $0.013 on 18^th February 2021.

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

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.