SI6 Metals Limited

SI6 Details 

Update on Drilling Program: SI6 Metals Limited (ASX: SI6) is engaged in exploration activities in Botswana in Southern Africa and the Laverton Gold District in Western Australia. It is engaged in the field exploration of nickel, copper, cobalt, platinum group elements (PGE) and silver mineralisation.  The company has reported that an application has been successfully accepted for Exploration Incentive Scheme (EIS) under which Department of Mines, Industry, Regulation and Safety (DMIRS) offers 50% refund of direct drilling costs for innovative drilling projects. SI6 has executed a drilling program at the Monument gold project, where 60 high level felsic intrusive targets have been identified. The company has previously mentioned regarding the presence of mineralisation from the first phase of Korong and Waihi and extended through the areas of Monument Gold Project (MGP).

Targeting Deeper Mineralisation in Botswana: SI6 has announced on 29 April 2021 regarding its exploration target for Botswana exploration program. The company is expecting to target deeper mineralisation at its ongoing Maibele projects in Botswana. The company is targeting base and precious metals in a belt, which is known for nickel and copper production.

1HFY21 Financial Highlights: The company has registered an increase in other income to $10,716 in 1HFY21 as compared with $2,455 in 1HFY20. SI6 has registered a loss of $1.09mn in 1HFY21. The company has seen an increase in its cash and cash equivalent position to $5.61mn as on 31 December 2020 as compared with $0.79mn as on 30 June 2020.

Cash and Cash Equivalent Position (Source: Company Reports)

Key Risks: The company requires regulatory approvals to carry out its business efficiently. Any delay in regulatory approval may result in financial losses for the company. The company is operating its business in multiple countries. Any severe movement in foreign exchange prices may lead to financial losses for the company.

Outlook: SI6 will look to continue with its drilling program in FY21 to explore further opportunities within Monument Gold Project. 

Technical View:

The SI6 stock price is trading in a strong downward trajectory, forming series of lower tops and lower bottoms formations, and now the prices are approaching toward the falling trend line support zone of AUD 0.011 level on the daily chart. Moreover, the stock prices are trading above an upward sloping trend line support level of AUD 0.012 and continuously taking support of it. The momentum oscillator RSI (14-period) is trading in an extremely oversold zone at ~23.40 levels, indicating a possibility of a sharp rebound from the lower end. However, the stock price is trading below its 50-period (SMA), acting as a crucial resistance zone. An important support level for the stock, is placed at AUD 0.010, while key resistance level is placed at AUD 0.019.

Weekly Chart (Source: Refinitiv, Thomson Reuters)

Stock Recommendation: In the last six months, SI6 has increased by ~30% and decreased by ~13.33% in the past one week. The current market capitalisation of SI6 stands at ~$18.10mn as of 29 April 2021. The stock is currently trading below the average 52-weeks’ price level range of ~$0.002-~$0.046. Considering approval of the application for mining under EIS, strong cash position, increase in other income, current trading levels and the key risks associated with the business, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.013 as on 29 April 2021.

SI6 Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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