Stocks’ Details

Minotaur Exploration Ltd

Acquisition of Pyramid Projects: Minotaur Exploration Ltd (ASX: MEP) is a metal and mining company focused on the exploration of copper and base metals in Australia. The market capitalisation of the company stood at $108.90 million as on 24^th November 2020. Recently, the company executed a Sale and Purchase Agreement (S&PA) with Avira Resources Limited, and it’s controlled entity to acquire 100% of its Pyramid Project comprising three tenements EPM 12887, EPM 19554 and EPM 25154 in the north east of Charters Towers. As per the agreement, MEP would be paying a cash consideration of $150,000 and will also allot $100,000 in MEP shares in return for the transfer of titles. MEP shall also pay a 1.5% NSR (Au only) in relation to the first 50,000oz of AU produced from the assets. For the year ended 30^th June 2020, the company reported revenue amounting to $92,126 as compared to $311,654 in FY19. During Q1 FY21, the company reported net cash used in operating activities of $221k and net cash inflow from investing activities of $1.5 million.

Key Financial (Source: Company Reports)

Outlook: Looking ahead, the company is focused on building its own wholly-owned asset base where exploration success could deliver significant shareholder value. Further, the company plans to establish an active exploration presence in the Charters Towers region of Queensland where multiple such systems have been found and developed into profitable operations spanning decades.

Stock Recommendation: As on 30^th September 2020, the cash balance of the company stood at $9.6 million. The stock of MEP has moved up by 176.31% and 250% in the last one and three months, respectively. The stock is currently inclined towards its 52-week high level of $0.240. On a TTM basis, the stock is trading at a price to book value multiple of 15.3x as compared to the industry median (Metals & Mining) of 2.7x. On a technical analysis front, the stock of MEP has a support level of ~$0.16 and a resistance level of ~$0.22. We are of the view that most of the positive factors have already been discounted at current trading levels. Hence, considering the returns over the past few months, current trading level, and TTM valuation, we give an ”Expensive” rating on the stock at the current market price of $0.205 per share, down by 6.819% on 24^th November 2020. We further suggest investors to wait for better entry levels.

IOUpay Limited

Successful Capital Raising: IOUpay Limited (ASX: IOU) is engaged in providing fintech and digital commerce software and services to its customers. Recently, the company notified that it has secured commitments for $10,055,300 from its lead broker via placements to sophisticated and institutional investors. The company added that the placement was strongly supported by new and existing sophisticated investors. The company intends to use the funds for working capital purposes, which include digital payments and to accelerate new product development. The company recently changed its name to IOUpay Limited (ASX: IOU) from Isentric Limited (ASX: ICU) at its EGM, which was held on 30^th September 2020. During September 2020 quarter, the company ramped up the business expansion and growth opportunities under the newly branded IOUpay company name and technology platform after conducting a review of existing business divisions and local SEA market opportunities in July 2020. During FY20, the company recorded a loss after tax of $2,610,228 as compared to $4,698,054 in FY19.

Financial Summary (Source: Company Reports)

Outlook: Going forward, the company expects huge growth opportunities across South East Asia (SEA) markets with limited credit options for consumers. The company is committed to expand from transaction processing into higher value add services such bill payments, mobile banking transactions, digital commerce, and smart short-term revolving BNPL instalment offerings.

Stock Recommendation: At the end of September 2020 quarter, the company had cash and call deposits of $2,812,000. The company anticipates its cash reserves and balance sheet to be further strengthened by operating and financing activities in the December 2020 quarter. On a TTM basis, IOU has an EV/Sales multiple of 14.6x as compared to the industry median (Software & IT Services) of 7.4x. In addition, the stock is trading at a price to book value multiple of 38.1x against the industry median of 6.2x on TTM basis. In the last three months, the stock of IOU has surged 363.41%. On a technical analysis front, the stock of IOU has a support level of ~$0.16 and a resistance level of ~$0.211.Therefore, considering the higher valuations, steep price movement in the past three months, and current trading level, we give an “Expensive” rating on the stock at the current market price of $0.190 per share, down by 5.001% on 24^th November 2020.

Venture Minerals Limited

Decent  Exploration Results:  Venture Minerals Limited (ASX: VMS) is a metal and mining company involved in the exploration and development of mineral resources within its current portfolio of projects in Tasmania and Western Australia. In a recent exploration update, the company confirmed that its first three drill holes at Orcus have intersected Copper and Zinc in sulfides at Golden Grove North beneath historic intersection of 22m @ 0.76g/t Au, 0.64% Cu & 1.3% Zn. Notably, the second drill hole (ORRC002) at Orcus has intersected 23 metres of disseminated to semi-massive sulfides with Copper (Cu) and Zinc (Zn), 50 metres down-dip of ORRC001. The demonstrates that the company has already identified 120 metres of VMS style sulfide mineralisation open at depth on the first line of drilling at Orcus.

Q1FY20 Result Highlights: During the quarter ended 30^th September 2020, the company wrapped up the share placement of $4.0 million and raised a further $2.5 million from an oversubscribed SPP. The company intends to use funds for processing and mining at the Riley Iron Ore Mines as well as for further exploration on the Golden Grove North Zinc-Copper-Gold Project and the Kulin Gold Project. During the quarter, the company also commenced (Stage 1) construction of the Wet Screening Plant at Riley. For the year ended 30^th June 2020 or FY20, the company reported revenue from continuing operations of $14,490 as compared to $23,836 in FY19. Loss for the year amounted to $2,204,559 against $2,968,006 in FY19.

Key Metrics (Source: Company Reports)

Outlook: The company is optimistic about the outlook for the prices of iron ore on the back of the continued spending on infrastructure by the Chinese government. The company is committed to advance the Riley Iron Ore Project, with a focus on first shipment in the December 2020 Quarter.

Stock Recommendation: As on 30^th September 2020, the cash and cash equivalents of the company stood at $5.96 million. In the past six and nine months, the stock of VMS has moved up by 138.88% and 207.14%, respectively. As a result, the stock is inclined towards its 52-week high level of $0.047. Thus, we are of the view that most of the positive factors have been discounted at current trading levels. On a technical analysis front, the stock of VMS has a support level of ~$0.032 and a resistance level of ~$0.044. Considering the sharp increase in the stock price over the last six months period, and current trading levels we suggest investors to wait for a better entry level and give an “Expensive” rating for the stock at the current market price of $0.041 per share on 24^th November 2020.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

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