Encounter Resources Limited

Exploring new possibilities: Encounter Resources Limited (ASX: ENR) is in an exploration and resource development business. The company was founded in 2004 and got listed in 2006.

This year has been very active and expansionary for the company. Firstly, they have completed five new joint ventures with Newcrest Mining Ltd (NCM), and due to this deal NCM brings significant financial, technical and operating capabilities, and therefore, the company has considerable leverage to benefit from Secondly, the company is continuously building their portfolio in those regions which show potential for large-scale, high-quality gold deposits. The company is focusing on the Laverton Tectonic Zone which is one of Australia’s most productive and prospective gold regions.

The company will apply innovative new targeting and exploration approaches in their 100% owned ground in the Laverton Tectonic Zone (southern extension). Thirdly, recently Independence Group NL partnered with the group for proceeding work on the Yeneena Copper-Cobalt Project in the Paterson Province (a prime location for copper-cobalt discoveries) of West Australia. This deal also brings significant financial, technical, and operating capability. Recently, several parties’ success in the region highlights and validates the potential of the region.

Overall, Encounter aims to benefit from the exploration landscape in Australia as it is an active project generator at domestic front. The group supports businesses and helps in exploring new Tier 1 mineral assets and works on a model sewn through alliances, JVs and sole funding. As per the latest detail, the group’s cash position is around $3.5M, which looks a bit low. Nonetheless, the company is very optimistic about year 2019, due to the durability and expansion in their portfolio. But present financial performance of the company does not show any optimism. In FY18, ENR revenue was $143,518, up 9.6% compared to $130,866 in the previous year, but net loss widened to -$10,136,263 as compared to -$1,313,269 in the last year and EPS was also significantly low.

In six months as on 9 November 2018, the share price of the company has given a downward movement of 36.51 percent, but after that stock price has recovered from the low level. The stock has been very volatile for a month and has given a negative movement of 1.69 percent over the past one month.


Opportunities (Source: Company Reports)

Hence, considering fundamentals of the company and reviewing management’s future goals and current stock performance with financial position, the stock comes under our watchlist while it traded at the market price $0.057 with a market capitalization of $15.22 Million as on 12 December 2018.
 

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.