TNG Limited (ASX: TNG)

TNG is a mineral processing technology company that owns its flagship Mount Peake Vanadium-Titanium-Iron project in NT. It had received a Major Project Status from the Northern Territory and Federal Governments. TNG is also focusing on green hydrogen and vanadium redox flow batteries. TNG was listed in ASX on February 18, 1971. It holds a market capitalization of AUD 91.63 million.

Financial and Operational Highlights: TNG has provided an update on it flagship Mount Peake project. It is processing stage 2 of the design and value engineering for the integrated mining and processing operations. The company is expecting the design stage to be completed by Q2FY22. It is progressing Hydrogen reduction testwork with an aim to reduce carbon footprint and become zero-emission by 2050. It is in talks with major contractors such as SMS and Clough to revise and update the project execution model. On February 15, 2022, TNG initiated a small shareholding sale facility to allow shareholders with holdings of less than $500 worth of shares to sell without incurring brokerage costs. The facility opened on February 14, 2022.

Recently, it had completed share placement to the tune of $12.5 million to fund development programs at its Mount Peake project. It also seeks various debt funding such as commercial debt and Export Credit Agency covered lines, government concessional funding, and Built-Own-Operate-Transfer funding arrangements (off-balance sheet funding).

In three months ending September 2021, TNG posted operating cash outflows of $689k and closed the period with a cash balance of $7.21 million, down from $11.43 million posted in the preceding quarter.

Technical Analysis: Currently TNG’s prices are sustaining below the rising trend line support level and facing the resistance of the same. Moreover, prices are trading below the trend-following indicators 21-period SMA and 50-period SMA, indicating negative momentum. The momentum oscillator RSI (14-period) is trading near an oversold territory at ~35.21 level, which might indicate the possibility of a rebound from the lower levels. An important support level for the stock is placed at AUD 0.055 while the key resistance level is placed at AUD 0.069

Considering the nil revenue-generating assets, negative operating cash flows, drop in cash balance, investing in this stock at such uncertain levels should be taken with a calculated approach, hence a ‘Watch’ stance is suggested. The stock was analysed as per the closing price of AUD 0.064 per share, down by ~3.03%, as of 18^th February 2022.

Daily Technical Chart – TNG

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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