Meeka Gold Limited

MEK Details

This report is an updated version of the report published on 25 May 2022 at 2:08 PM GMT.

Business Updates: Meeka Gold Limited (ASX: MEK) is a junior gold explorer with a portfolio of exploration projects across Western Australia and South Australia. The below picture provides an overview of key business updates:

Business Updates (Source: Analysis by Kalkine Group)

Q3FY22 Highlights: During the quarter, Murchison Gold Project exploration delivered broad zones of shallow gold mineralisation outside existing mineral resources. It closed the quarter with a cash position of $5.1 million, which allows the business for continued aggressive exploration activities.

Cash Balance (Source: Analysis by Kalkine Group)

Key Risks: The business could be affected by the adverse movement in the spot prices of gold. In addition, MEK is exposed to risks arising from the change in the climate.

Outlook: MEK is optimistic that Cascade REE Project is a significant opportunity in a forward-facing commodity market. In addition, the exploration field work is targeting to commence REE mineralisation plan in 2HFY22.

Technical Commentary: On the daily chart, MEK stock prices are hovering around the horizontal trend line resistance level and trading below the trendline. Moreover, the momentum oscillator RSI (14-period) is trading in an overbought zone at (~75.90 level), which might indicate the possibility of a downside correction from the current levels. However, the prices are trading above the trend-following indicators 21-period SMA, which may act as support zone. An important support level for the stock, is placed at AUD 0.065 while the key resistance level is placed at AUD 0.055.

Stock Recommendation: The stock of MEK is trading above its 52-week low-high average of $0.035 - $0.087, respectively. The stock has provided returns of ~20.83% in the past month. Considering the technical factors mentioned above, solid rally in the past months, current trading levels, volatility in the market due to Russia- Ukraine Tension, and key risks associated with the business, we advise investors to book profit and give a ‘Sell’ rating on the stock at the current market price of $0.064 as on 25 May 2022, 12:20 PM (GMT+10), Sydney, Eastern Australia.

MEK 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 subject to the factors discussed above alongside support levels provided.

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