OZL Minerals Limited
OZL Details
Company Overview: OZL Minerals Limited (ASX: OZL) produces gold and copper metals. It operates key projects of Carrapateena, West Musgrave, Carajas, and Prominent Hill.
Latest Updates & Q1FY22 (Ended 31 March 2022): The below table summarises the recent material changes and March quarter highlights:
Recent Material Developments; (Analysis by Kalkine Group)
The below chart shows the quarterly production summary of Q1FY22 (March Quarter):
Quarterly Copper Production Summary; (Analysis by Kalkine Group)
Key Risks: The company faces the risk of metal price changes, exploration risk, realisation of synergies from the acquisition, and a tight labour market situation.
Outlook: OZL plans to produce ~55,000-~65,000 tonnes of copper and ~125,000-~135,000 ounces of gold in FY22. It continues to progress on the study at the West Musgrave project to inform an investment decision in 2HFY22.
Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)
Source: Analysis by Kalkine Group
*% Premium/(Discount) is based on our assessment of the company’s NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.
Stock Recommendation: The stock of OZL gave a negative return of ~23.80% in the past three months. The stock is currently trading close to its 52-weeks’ low level of $19.445. The stock has been valued using the Enterprise Value to Sales based illustrative relative valuation method and arrived at a target price of low double-digit upside (in % terms). The company might trade at a slight discount than its peers, considering the growth investments across the portfolio, and heightened COVID-19 related workforce and supply disruptions. For this purpose of valuation, a few peers like IGO Ltd (ASX: IGO), Alkane Resources Ltd (ASX: ALK), Evolution Mining Ltd (ASX: EVN), and others have been considered. Considering the current trading levels, robust copper prices and decent long-term outlook, higher investments, rise in copper production, exploration potential across portfolio, an indicative upside in valuation, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the closing market price of $19.810, down by 1.930%, as of 20 June 2022.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
OZL Daily Technical Chart, Data Source: REFINITIV
Tempus Resources Limited
TMR Details
Company Overview: Tempus Resources Limited (ASX: TMR) is involved in gold mining operations with the Blackdome-Elizabeth project in Southern British Columbia and Zamora Projects in Ecuador.
Recent Exploration Updates: The below table presents the latest news updates from TMR, including exploration plans at the Blue Vein at the flagship Blackdome- Elizabeth project.
Recent Updates; (Analysis by Kalkine Group)
Q3FY22 (Ended March 2022) Highlights: TMR focused on the Phase 1 exploration drill program at the Elizabeth Gold Project to extend the South-West Vein and explore other veins exhibiting gold mineralisation.
Comparative Quarterly Net Loss; (Analysis by Kalkine Group)
Key Risks: The company faces exploration risk, the uncertainty of commercialisation, gold price changes, and regulatory bottlenecks at projects.
Outlook: TMR is progressing with the exploration program at the Blackdome-Elizabeth project and targets the drilling of multiple veins (Blue Vein, Ella Vein, Main and West Veins, etc.) in FY22.
Technical Note: On the daily chart, TMR stock prices are hovering around the falling trend line support level and trading above the trendline. Moreover, the momentum oscillator RSI (14-period) is showing a reading of ~38.80 level. An important support level for the stock, is placed at AUD 0.053 while the key resistance level is placed at AUD 0.070.
Stock Recommendation: The stock of TMR gave a negative return of ~33.33% in the past three months. The stock is currently trading closer to the 52-weeks’ low-level of $0.056. Considering the current trading levels, technical levels mentioned above, exploration potential at the Elizabeth-Blackdome project, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the closing market price of $0.060, down by 4.761%, as of 20 June 2022.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
TMR 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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