Stellar Resources Limited (ASX: SRZ)

As incorporated in 2004, engaged in developing its flagship Heemskirk Tin Project, which is the highest grade undeveloped tin resource in Australia and second best globally. It also has an interest in exploring Victorian-style gold in Tasmania. Other projects include: the St. Dizier deposit, the Mount Razorback historic mine, and the Montana Flats and Mount Razorback Exploration licenses having silver-lead-zinc deposits in association with tin mineralisation. It holds a market capitalization of AUD 27.52 million as of 20th October 2021.

Financial & Operational Updates – On 22^nd September 2021, it sold its non-core exploration license EL6350 to Alligator Energy Limited (ASX: AGE). As per the Annual Report to shareholders released on 21^st September 2021, SRZ showed an increase in Revenue from Interest to reach ~AUD 4.72k for FY21 as against ~AUD 3.29k in FY20. Its Total Comprehensive Loss attributable to shareholders decreased from ~AUD 0.47 million in FY20 to ~AUD 0.32 million in FY21. Cash was reported as ~AUD 5.40 million as of 30^th June 2021 versus ~AUD 0.52 million in PcP. On 7^th September 2021, first two holes of nine holes of Phase 1 of diamond drilling program at Heemskirk Tin Project were completed and have intersected zones of mineralisation and alteration. On 23^rd August 2021, it has been granted eight out of ten Exploration Licenses covering an area of 1,899 km² in NE Tasmania Gold Exploration Project, which is highly prospective for Victorian-style Orogenic Gold, Intrusive Related Gold Systems (IRGS) and tin occurrences.

Technical Analysis: On the Weekly chart, SRZ has recently started to gain momentum and the leading indicator RSI (14-period) is also trading in a positive territory at ~60.028 levels, indicating an upward direction. The CMP is also sustaining above the trend-following indicators 50-period SMA and 21-period SMA, further supporting an upside move. The crucial support and resistance levels are AUD 0.029 and AUD 0.040, respectively.

Besides having one of the highest-grade Tin reserves in Australia, SRZ’s newly acquired  license from AGE and eight licenses in Tasmania, gives a positive sign, hence the investors with a high-risk appetite can consider it for a ‘Speculative Buy’ position, keeping the support and resistance levels as crucial points. The stock was analysed as per the current market price of AUD 0.033 per share, 12:02 PM (GMT+10), Sydney, Eastern Australia, as of 20^th October 2021. However, the risk levels are high considering net losses, results from current drilling activities and prospective licenses to be obtained.  

Weekly Technical Chart – SRZ

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 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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