Aeon Metals Limited  

AML Details

FY21 Key Results Highlights: Aeon Metals Limited (ASX: AML) is mineral exploration and its development, including Copper, Cobalt, Lead Zinc, Molybdenum and Silver.

• Appointment of Executives: Jeff Botting and Mr Peter Woodhouse will join AML as a Project Manager and Exploration Manager respectively.
• Pre-feasibility study and ongoing resource drilling for Walford Creek Cu/Co Project in future are funded through:

• Loan with OCP Asia: a 24-month extension to maturity for a loan of $25.2mn has been given to AML.
• Raise of $705k through the Share Purchase Plan.

• Net Loss After Tax: Reported an increase in Net Loss, from -$2.16mn in 1HFY20 Vs -$2.49mn in 1HFY21.
• Cash Details: Cash & investments of $0.58mn reported at the end of 4QFY21 as compared to $2.23mn at the end of 3QFY21.

 Cash Highlight (Source: Analysis by Kalkine Group) 

Key Risks: The company is exposed to the adverse climate events and geotechnical challenges along with dependency on the commodity price fluctuations.

Outlook: The new-drill targets for Walford Creek (dealing in Copper, Cobalt, Zinc Silver and Nickel) and its ongoing program to expand and upgrade (due early CY2022), progresses AML towards positive production in future.  

Stock Recommendation: AML is trading lower than the average 52-week price level band of $0.054 and $0.165 with a negative return of -34.88% in past three months. On a TTM basis, the stock has been valued at 0.7x of Price-to-Book Value multiple, lower than the industry median (Metal & Mining) of 2.7x, implying an undervaluation. Considering the company’s growing business, expansion and upgradation of Walford Creek project, capital raise, current trading levels, and valuation on TTM basis, along with key risks associated with the business, we give a “Speculative Buy” rating on the stock at the current market price of $0.054, as on 9^th September 2021, 01:23 PM (GMT+10), Sydney, Eastern Australia.

AML Daily Technical Chart, Data Source: REFINITIV 

Zimplats Holdings Limited

ZIM Details

FY21 Key Results Highlights: Zimplats Holdings Limited (ASX: ZIM) is involved in the production of Platinum Group Metals (PGMs) and associated metals like nickel, gold, copper, cobalt, and silver.

• Revenue Details: In FY21, ZIM reported a 56% increase in revenue from US$868.91 million in FY20 to US$1,353.79 million in FY21.
• Net Profit After Tax: up by 115%, ZIM posted a NPAT of US$563.12 million in FY21 Vs US$261.83 million in FY20.
• Net Cash from Operating activities: An increase in cash from operating activities from US$258.4 million in FY20 Vs US$453.1 million in FY21 has been observed.
• The group invested a total amount of US$159.1 million in FY20 & FY21 on different stay-in business, replacement, and expansion projects.
• Bimha Mine Redevelopment project of US$100.3 million reaches its final stage of completion.

Revenue Highlight (Source: Analysis by Kalkine Group)

Key Risks: The company is exposed to the adverse climate events, geotechnical challenges, and dependency on the commodity price fluctuations. It is also bound to depend on the risks increase in the infected numbers of COIVD-19 in Zimbabwe.

Outlook: The company is banking on the persistence of favourable metal prices in future. The development project of Mupani Mine, Rukodzi Mine and Ngwarati Mine with the designed capacity of 2.2Mtpa is expected to be finished by September 2024.

Stock Recommendation: ZIM is trading above than the average 52-week price level band of $8.75 and $28.75 with a positive return of 16.68% in past six months. On a TTM basis, the stock has been valued at 1.2x of EV/Sales multiple, lower than the industry median (Metal & Mining) of 1.9x and Basic Materials of 2.0x, implying an undervaluation. Considering the company’s growing business, investment in capital projects, FY21 performance, current trading levels, and valuation on TTM basis, we give a “Hold” rating on the stock at the current market price of $23.58, down by ~0.842% as on 9^th September 2021.

ZIM Daily Technical Chart, Data 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 analysis has been achieved and is 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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