Vimy Resources Limited

VMY Details

Vimy Resources Limited (ASX: VMY) happens to be a resource exploration as well as evaluation company.

Result Performance (H1FY21 Ended 31 December 2020)

• The company’s loss from continuing operations for the interim period stood at $3.74 million, as compared to $3.76 million in the previous corresponding period (pcp).
• Net assets at the end of the period stood at $5.25 million, as compared to $8.28 million as at 30^th June 2020.
• Cash balance at the end of the period stood at $4.34 million. No dividend was recommended during the period.

Key Data (Source: Company Reports) 

Q4FY21 Update (Ended 30 June 2021)

• During the final quarter period, the company’s site activities commenced at Mulga Rock Project.
• Net cash from operating activities stood at -$1.31 million; Net cash from investing activities stood at -$2.69 million; and Net cash from financing activities stood at $26.11 million.
• Cash balance at the end of the period stood at $24.06 million.

Early Works Program Update

The Board of the company provided an update on the Early Works Program as well as approvals process for the Mulga Rock Project in WA. The company has been preparing to mobilise the earthworks contractor as well as equipment to site over the next few weeks. Notably, the Early Works Program includes an intensive 8-10 week schedule of work which would be ensuring that the company achieves “substantial commencement” prior to 16^th December 2021.

Recently, the Board of VMY announced that Western Australian Department of Mines, Industry Regulation and Safety (or DMIRS) approved the Mulga Rock Mining Proposal as well as associated Mine Closure Plan on 29^th September 2021.

Outlook:

The company’s existing Mulga Rock camp has re-opened to support the commencement of site works at Mulga Rock. It was mentioned that the uranium market is emerging from the impacts of the pandemic with suppliers as well as buyers having to adjust, and even re-adjust, the planning as well as operations.

Key Risks:

High volatility in the commodity markets remains the key concern. It is also exposed to the variety of financial risks like market risk, credit risk as well as liquidity risk.

Technical Overview:

Chart:

Source: REFINITIV

Note: Purple Color Line Reflects RSI (14-Period)

Stock Recommendation:

The company’s stock rose by ~66.66% in 1 month and ~48.14% in 6 months. It has made a 52-week low and high of $0.030 and $0.270, respectively.

Considering the aforesaid facts, we give “Speculative Buy” recommendation on the stock at the current market price of $0.200 per share, up by 2.564% as on 1^st October 2021.

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 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 analysis has been achieved and 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 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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