Cyprium Metals Limited

CYM Details

Identification of Significant Copper Intersection: Cyprium Metals Limited (ASX: CYM) is engaged in the exploration and development of minerals. Recently, the company has released the first assay results from the Nifty West drilling program. These results are from the 16 RC holes (for 3,830m) drilled, which are targeting lightly tested areas of copper mineralisation below and to the immediate west of the former Nifty open pit.

• The company added that the results indicate strong potential for additional open pit mineralisation to grow the existing +0.6 Mt copper Mineral Resource.
• CYM is also planning further drilling as its priority moving forward.

Q3FY21 Financial and Operational Highlights:

• During the quarter ended 30 September 2021, the Nifty copper project site incurred an $8.7 million of expenditure, which included personnel, RC, diamond and sonic drilling, technical and base line studies, surveys, metallurgical testwork, engineering, camp refurbishment, maintenance, and administration activities.
• The company recorded an exploration expenditure of $1.1 million for the quarter, which mainly includes geological analysis and fieldwork.

1HFY21 Financial Summary:

• For the half-year, CYM posted a net loss of $10.93 million as compared to $0.89 million in H1FY20. As a result, the loss per share for the period increased to -3.29 cents per share against -1.60 in 1HFY20.
• The company closed the half-year with a cash balance of $50.61 million as compared to $5.37 million as on 31 December 2020.

Net Loss (Source: Analysis by Kalkine Group)

Key Risks:

• Commodity Price Risk: The company’s business is exposed to a risk arising from the adverse movement in the prices of the commodities. As a result, its financial health could be hampered.
• Regulatory Risk: CYM is exposed to a more complex regulatory environment; any non-compliance could lead the business to fines, penalties, etc.

Outlook:

• For the December 2021 quarter, the company would focus on Nifty Heap Leach Restart development plans with the objective of establishing an efficient long-term producing copper mine.
• The company would also be focused on finishing the Heap Leach Restart Study and continue the Project Finance process.

Stock Recommendation: As on 30 September 2021, the company had a cash balance of $40.0 million. The stock of CYM is trading near to its 52-low level of $0.180, offering a decent opportunity for accumulation. The stock has been corrected by ~21.87% and 37.49% in the past three and six months, respectively. The stock is trading at a P/BV multiple of 1.1x as compared to the industry median (Basic Materials) of 2.5x on a TTM basis. Thus, it seems that the stock is undervalued at the current trading levels. Considering the valuation on a TTM basis, decent liquidity position, decent outlook, current trading levels, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.185 as on 09 November 2021, 01:05 PM (GMT+10), Sydney, Eastern Australia.

CYM Daily Technical Chart, Data Source: REFINITIV 

Disclosure: Cyprium Metals Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.