Company Overview: 29Metals Limited (ASX: 29M) was incorporated in 2021 and is based in Melbourne, Australia. The company is engaged in exploring and mining copper and precious metals. Aeris Resources Ltd (ASX: AIS) manufactures and sells copper, gold, and silver goods, as well as exploring copper, zinc, and gold resources. This Report covers Fundamental and Operational Update along with the Price Action, Technical Indicators Analysis, Support Levels and Resistance Levels on these two stocks.

29Metals Limited (ASX: 29M)

29M’s Fundamental and Operational Update:

29Metals Limited recently provided a planned update to the market pertaining to the Capricorn Copper Recovery Plan and guidance for Golden Grove:

1. Regarding the Capricorn Copper Recovery Plan, the recent results indicated a large, high-grade mining operation in a tier 1 location at Esperanza South, which includes 70.0m @ 2.8% Cu, 1,083ppm Co2. The results also indicated additional new targets area for Mineral Resources exploration, which include 36.0m @ 3.9% Cu, 188ppm Co2.
2. Operations suspended at Capricorn Copper post extreme rainfall event from 6-10 March 2023. A restart of the operations is planned from mid-September Quarter 2023, focusing on water quality management and reduction of overall water levels on site, increased mechanical evaporation capacity, increased water reuse and recycling upon restart, De-watering and rehabilitation of Esperanza South mine, along with stakeholder engagement.

Outlook pertaining to the Capricorn Copper Recovery Plan and Golden Grove:

1. Pertaining to Capricorn Copper Recovery, the company focuses on increasing copper and silver production, process improvement, and upgrading operating sites, with a guidance of 7– 9kt copper produced, 40 – 50koz sliver produced, 514 – 584kt ore mined produced and 473 – 543kt ore milled produced for FY23.
2. Pertaining to Golden Grove Production, the company targets advancing mill throughput ramp-up to ~1.75Mt pa in 2026 and aims to ramp up Xantho to more than 1Mt in 2025. The mine recoveries’ life is expected to be at par with historical performance. For FY24-FY25, capital expenditure is expected to be between AUD80-110mn pa. 29M expects large, high-grade copper, zinc, and precious metals mining operation in tier 1 location. Further, extension in ramp-up production from Xantho, development of Gossan Valley and higher mill throughput are expected to drive near-term metal production.

Full Year Results for the period ended 31 December 2022: The Group revenue soared 20% YoY in FY22; however, reflecting a full year of revenue from Capricorn Copper, higher zinc production and higher zinc price, partly offset by lower precious metal sales. Copper metal sales amounted~59.4% of total revenues, compared to 64.5% of total revenue reported in the previous period. Site operating costs increased 14% YoY due to higher activity, including a 5% increase in ore milled. 

29M’s Technical Analysis:

On the daily chart, 29M's prices are trading with lower lows and lower highs formation and facing the resistance from a downward sloping trend line, indicating the possibility of a sideways to a negative direction. In addition, the RSI (14-period) is moving in the oversold zone with a reading of 21.18, and prices are trading below the 21-period and 50-period SMAs, supporting a negative bias. Important support for the stock is positioned at AUD 0.480, while key resistance is placed at AUD 0.840.

Daily Technical Chart – 29M

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest, taking into consideration the risk-reward scenario. 29Metals Limited (ASX: 29M) was last covered in a report dated '05 October 2022.

Aeris Resources Ltd (ASX: AIS)

AIS’s Key Fundamental Takeaway

• Recent Update: On 25 May 2023, AIS provided an update on recent drilling results at the Bentley deposit (which is located at the Company’s 100% owned Jaguar Operations (Jaguar) in Western Australia) that showed the exploration potential at Bentley and its ability to grow resources. Further drilling at the Bacalar lens is expected to continue providing high-grade zinc, copper, and precious metal intercepts.
• Q3 FY23 Update: On 28 April 2023, AIS unveiled its Q3 FY23 update and ended the quarter with closing cash and receivables of $56.0 million with no debt. The Group copper equivalent production stood at 11.1kt. The copper production at Tritton was impacted by delays to the Budgerygar ventilation shaft, which is on track for completion mid-May. Subsequently, the copper guidance for FY23 has been reduced to 28kt – 32kt. Also, FY23 EBITDA guidance has been revised to $50 – 70 million due to lower copper production. Notwithstanding, all operations are on target to meet operating cost guidance.
• H1 FY23 Financial Results (for the period ended 31 December 2022): The Group revenue soared 58% YoY in H1 FY23; however, higher depreciation and amortization of $61.2 million (largely due to the acquisition of Round Oak Minerals on 1 July 2022) turned the entity into statutory net losses, following the 53% YoY decline in adjusted EBITDA. During the period, the Group also spent $71.3 million on capital projects including exploration ($33.0 million new mining projects and exploration). Despite short-term headwinds regarding cost pressure, the Group looked positive pertinent to long-term supply/demand fundamentals of its commodity mix, particularly copper and zinc. 

AIS’s Technical Analysis:

AIS’s prices broke a Head and Shoulders pattern by the downside in April 2023, and since then, prices have been trading below the breakout level, indicating the possibility of sideways to downside movement in the near future. In addition, the RSI (14-period) is moving southward with a reading of 35.21, and prices are trading below the 21-period and 50-period SMAs, supporting a negative bias. Important support for the stock is positioned at AUD 0.340, while key resistance is placed at AUD 0.520.

Daily Technical Chart – AIS

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest, taking into consideration the risk-reward scenario. Aeris Resources Ltd (ASX: AIS) was last covered in a report dated '17 March 2023.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: Investment decision should be made depending on an individual’s appetite for upside potential, risks, and any previous holdings. This recommendation is purely based on technical analysis, and fundamental analysis has not been considered in this report.

Note 3: Related Risks: This report may be looked at from high-risk perspective and recommendations are provided are for a short duration. Recommendations provided in this report are solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

Technical Indicators Defined:

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

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

The Green colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, prices are currently in a bullish trend (Vice – Versa).

The Blue colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Orange/ Yellow colour line represents the Trendline.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.

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