Tribune Resources Limited

TBR Details

Q1FY22 (Ending September 2021 Quarter) Results: Tribune Resources Limited (ASX: TBR) engages in the extraction and development of gold via its Diwalwal project in the Philippines and Japa project in Ghana. TBR also operates the East Kundana Joint Venture tenements (‘EKJV’).

• Share in Gold Production: TBR received 12,736 oz (gold ounce) in Q1FY22 as its share (75%) in the gold production from the EKJV tenements versus 11,897 oz in Q4FY21 (June Quarter).
• Exploration Work: The company undertook exploration drilling for resource definition at the Japa Project in Ghana. At the Diwalwal project, TBR demobilised the drill rig in July in the Philippines and received the assay results from the drilling completed.
• Liquidity Position: The company held ~$6.961 million cash and cash equivalents as of 30 September 2021 versus ~$4.163 million as of 30 June 2021.
• Dividend Declaration: TBR declared a full franked dividend of ~$0.20 at ~30% tax rate and has set Record Date as 25 October 2021 and Payment Date as 5 November 2021.

Sales Revenue & NPAT Trend from FY17-FY21; (Analysis by Kalkine Group)

Key Risks: The company faces the risk of exploration, correct resource definition & ore estimation, JV issues with partners, and commodity price changes. 

Outlook:

• At the Japa project, TBR has completed drilling work in Q1FY22 and plans to update on the Adiembra resource estimation in the December 2021 quarterly (Q2FY22) report.
• At the Seven Mile Hill Joint Venture Project (50%), TBR has undertaken geological sampling of which assay results are awaited. The company is continuing with the drilling at White Lake, the south-eastern part of the project area.
• TBR will hold an AGM (Annual General Meeting) on 26 November 2021.
• The company is undertaking a share redemption program expiring on 21 February 2022.

Stock Recommendation: The stock of TBR gave a positive return of ~4.12% in the past month and a negative return of ~5.51% in the past three months. The stock is currently trading lower than the 52-weeks’ average price level band of $4.600 - $7.300. On a TTM basis, the stock of TBR is trading at a price to book value multiple of 1.0x lower than the industry (Metals & Mining) median of 2.5x, thus seems undervalued. Considering the current trading levels, increase in gold ounce share in Q1FY22, improved liquidity and net cash inflows in Q1FY22, drilling work on projects in Ghana & Philippines, similar gold production outlook of EKJV project for Q2FY22, valuation on a TTM basis, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the current market price of $4.700, as of 1 November 2021, 10:30 AM (GMT+10), Sydney, Eastern Australia.

TBR Daily Technical Chart, Data Source: REFINITIV  

 Note 1: The reference data in this report has been partly sourced from REFINITIV.

Note 2: Investment decision 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 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 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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