Latin Resources Limited

Latin Resources Limited (ASX: LRS) is an Australian-based mineral exploration company. The company holds various mineral resource projects in Latin America and Australia. Its project in Australia comprises the Cloud Nine Halloysite Project near Merredin, WA, Lachlan Fold Gold Projects in NSW, and the Big Grey Project in the Paterson region, WA. Its projects in Latin America include the lithium projects in Brazil and a JV agreement with the Argentinian company Integra Capital.

Financial and Operational Update: Recently the company updated that the consecutive holes reveal outstanding continuity of high-grade halloysite bearing kaolinised granite in the Cloud Nine Mineral Resource area. The company has got high-grade halloysite outcomes from the following 14 holes in the geostatistical cross-drilling program. Solis Minerals Limited, where LRS is the largest shareholder, recently announced its fruitful listing on the Australian Securities Exchange (ASX) and has raised an overall A$5.5 million through the issue of 27,500,000 Chess Depository Interests. On the financial front, LRS reported a net loss of $3.99 million for the six months ended 30 June 2021 compared to the net loss of $1.01 million in the prior period.

Technical Analysis

Daily Price Chart

Note: The purple color line in the chart depicts RSI (14-period).

On the daily chart, LRS prices are sustaining above the falling trend line support level and taking support of the same. The momentum oscillator RSI (14-period) is trading at ~47.96 level and formed positive divergence, indicating the possibility of rebound in the price. Moreover, the prices are trading above the trend-following indicator 21-period SMA, which may act as a support level for the stock. The crucial support level for the stock is placed at AUD 0.028, while the key resistance is at AUD 0.038.

Stock Recommendation

Going ahead, the company aims to achieve substantial cost savings and improvements in sample throughput by way of approved use of the FTIR and Machine Learning method. Therefore, considering the facts above and the current trading levels, we give a “Speculative Buy” recommendation on the stock at the current market price of A$0.032 as of 5^th January 2022 (Time: 11:39 AM (GMT+10), Sydney, Australia).

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 on 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 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 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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