Galena Mining Limited (ASX: G1A)

G1A was incorporated in 2016, it is involved in mining, exploration and development of Abra Project (lead-silver concentrate). The company’s market capitalization stood at AUD 119.10 million as of 12^th January 2022.

Financial and Operational Updates: On 20^th December 2021, ~32% of completion at its Abra Project was announced, where the rest of the development expenditure currently stands for ~AUD 156 million including pre-development capital expenditure and owners’ costs and contingencies. As per its quarterly report on 27^th October 2021, it placed significant long lead-time orders of ~AUD 12 million, which includes plant ball mill and concentrate filter. With the nil sales receipts in 1QFY22, G1A closed the quarter with a cash balance of ~AUD 88.88 million at the end of 30^th September 2021 versus ~AUD 96.19 million at the end of 30^th June 2021. As per its Annual Report, it reported a decrease in its net losses from ~AUD 6.59 million in FY20 to ~AUD 3.90 million in FY21.

Technical Analysis: After crossing a downward sloping trendline by the upside, G1A's prices are facing strong resistance at AUD 0.265, indicating the possibility of a downside correction. The prices are placed above the trend following indicators 21-period SMA but below the 50-period SMA, making it indecisive. On the weekly chart, the leading indicator RSI (14-period) is reversing from higher levels and currently trading at ~51.217. Now an immediate support level for the stock appears at AUD 0.205 while the resistance is at AUD 0.260.

Due to subdued financials and drop in cash balance, and current price levels, investing in this stock at such uncertain levels should be taken with calculated approach, hence a ‘Watch’ stance is suggested. The stock was analyzed as per the closing price of AUD 0.235 per share, down by ~6.000%, as of 12^th January 2022.

Weekly Technical Chart – G1A

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 Valuation has been achieved and subject to the factors discussed above.

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. 

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

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

The 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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