Neometals Ltd (ASX: NMT)

NMT is engaged in advancing its advanced minerals projects and developing its technology business unit. The company develops opportunities in minerals and advanced materials essential for a sustainable future.

Financial and Operational Updates:  Recently, the company’s joint venture Primobius GmbH (owned 50:50 by Neometals and SMS group GmbH) has executed binding option and licensing agreements with Stelco Inc to commercialise its recycling technology into North America. As announced on 23 December 2021, NMT has successfully commissioned its pilot plant and started production of a titanium-rich gravity concentrate sample for offtake evaluation trials. During the quarter ended 30 September 2021, the company has made strong commercial progress, evident by reliance on hard rock mining and explorations towards circular, sustainable materials recovery and recycling opportunities. NMT was also engaged in preparations for dual listing on the AIM market of the London Stock Exchange. The company closed the quarter with a cash balance of $83.5 million, receivables and investments of $38.7 million and zero debt. The company’s growth strategy focuses on de-risking and developing long life projects with strong partners and integrating down the value chain to increase margins and return value to shareholders.

Technical Commentary: NMT prices witnessed a significant rally in 2021 and continued its rally in the first month of 2022. However, the price is hovering at its golden Fibonacci extension levels, i.e., 138.2% and 161.8%, indicates profit booking might occur from the resistance levels. RSI (14-period) is hovering at extreme overbought region i.e., ~94 on a monthly chart that further indicates stock might correct from the higher levels in the coming period. Immediate support levels are AUD 1.56 and AUD 1.41, while immediate resistance levels are AUD 1.73 and AUD 1.85.

Due to subdued financials and current price levels, investing in this stock at such uncertain levels should be taken with a calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 1.615 per share, down by ~10.278%, as of 21^st January 2022.

Weekly Technical Chart – NMT

Data Source: REFINITIV

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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