New Century Resources Limited (ASX: NCZDA)

Incorporated in 2010, NCZDA is an exploration and development company, mainly focussing on its Century Mine Project. It has properties such as Silver King lead-zinc-silver deposit, Century Tailings deposit, South Block deposit, East Fault Block deposit and Phantom Hills Phosphate deposit. Its market capitalization as of 8^th December 2021 stood at AUD 166.97 million.

Financial & Operational Updates – On 9^th December 2021, Thebes Offshore Master Fund, Luxor Capital Group, LP and LCG Holdings, LLC changed their substantial shareholding from ~13.73% to 12.05%. As approved in AGM held on 30^th November 2021, it has completed its share capital consolidation on a 15 to 1 basis. On 8^th December 2021, it completed its equity raising of AUD 116.7 (excluding costs) million which is a part of its transformational ESG focussed growth transaction. The capital raise includes strategic investment of 19.99% by Sibanye-Stillwater Limited by investing ~AUD 61.00 million. On 7^th December 2021, collectively the Sibanye Group (SSW) changed its shareholding from ~9.81% to ~19.99%.

On 1^st December 2021, it signed an Environmental Bond Facility (New EBF) with Argonaut Insurance Company and Macquarie Bank Limited which will replace the existing bond held through MMG Limited. As per its quarterly report on 27^th October 2021, it reported ~AUD 97.19 million receipts for 1QFY22 and closed its accounts with a cash balance of ~AUD 34.54 million at the end of 30^th September 2021 versus ~AUD 35.69 million at the end of 30^th June 2021. As per the Annual Report, its revenue from ordinary activities was recorded as ~AUD 277.98 million. Moreover, it reported net losses of ~AUD 10.82 million in FY21 versus ~AUD 8.11 million in PcP.

Technical Analysis: On the weekly chart, NCZDA price witnessed a breakout of the rising trend line support and prices are sustaining below the trend line. The prices are trading below the trend-following indicators 21-period SMA and 50-period SMA, which may act as a resistance zone. However, the momentum oscillator RSI (14-period) is trading near an oversold zone at ~32.63 level. The crucial support level for the stock is placed at AUD 1.80, while the key resistance is at AUD 2.17.

After considering the company’s net losses and indecisive 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 2.02 per share, down by ~2.416%, as of 9^th December 2021.

Weekly Technical Chart – NCZ

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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