E2 Metals Limited

E2M Details

Positive Results of Drilling Program: E2 Metals Limited (ASX: E2M) is engaged in the exploration of minerals with a market capitalisation of $90.52 million as on 3^rd November 2020. Recently, the company notified that it has received the first gold and silver assay results from the drilling at Mia prospect, Conserrat Project. The highlights of the results can be seen in the following picture:

Assay Results (Source: Company Reports)

A Quick Look at September 2020 Quarter: During the quarter ended September 2020, the company finished phase 1 drilling at the Mia and Patricia prospect, which included 9 RC holes and 3 diamond holes for 1303m. With respect to the ongoing drill program, follow-up rock chip sampling at the Emilia prospect has returned up to 15gpt gold and 2146gpt silver in vein samples, which are validating the high-grade target. During FY20, the company recorded a loss of $2,857,388 as compared to the loss of $3,203,200 in FY19.

FY20 Results (Source: Company Reports)

Outlook: For the December 2020 quarter, the company is likely to continue drilling at Conserrat. In addition, E2M is likely to receive further assay results until Christmas as drilling continues at all prospects including Ro, Florencia, Veta Blanca and Emilia. The company is scheduled to conduct its 2020 Annual General Meeting on 16 November 2020.

Stock Recommendation: The company closed the quarter in a decent financial position with cash of over $5.2 million. The stock of E2M has moved up by 204.34% and 288.88% in the past one and three months, respectively. The stock is currently trading higher than the average 52-weeks price level band. On a TTM basis, the stock is trading at a price to book value multiple of 19.7x as compared to the industry median (Basic Materials) of 2.5x. In addition, we have considered 14-day RSI and default values have been used. After careful consideration, it was observed that the stock is currently in the overbought zone. Hence, we expect a marginal fall in the stock price in the coming times. On a technical front, the stock of E2M has a support level of ~$0.184 and a resistance level of ~$1.01. Therefore, considering the current trading levels, and upside movement in the stock and RSI levels, we suggest investors to book profit on the stock and give a “Sell” rating at the current market price of $0.685 per share, down by 0.725% on 3^rd November 2020.

E2M Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

Hazer Group Limited

HZR Details

Signing of Agreement with AP Ventures: Hazer Group Limited (ASX: HZR) is engaged in the research and development of novel graphite-and-hydrogen-production technology. The market capitalisation of the company stood at ~$78.25 million as on 3^rd November 2020. During September 2020 quarter, the Board of the company approved the final investment decision to proceed with the Hazer Commercial Demonstration Plant (CDP). In addition, the company also appointed Primero Group Ltd as its engineering, procurement, and construction contractor for the project. After the end of the quarter, the company signed a non-binding term sheet with AP Ventures Fund II GP LLP (APV) for a $4.0 million investment in Hazer by APV. As per the terms of the agreement, APV would make an investment of $4 million in the company and acquire 4 million unlisted notes and 2.25 million unlisted options in HZR.  For the year ended 30^th June 2020, the company reported a fall of 14% in revenue to $1,436,617 and loss for the year amounted to $3,225,289, down by 27% over previous year.

Financial Summary (Source: Company Reports)

Outlook: Going forward, the company would maintain its focus on growth in the wealth of shareholders via strengthening its business. The company is likely to conduct its 2020 Annual General Meeting on 30^th November 2020.

Stock Recommendation: In the past three and six months, the stock has surged 52.63% and 45%, respectively. The stock is currently trading higher than the average 52-weeks price level band. On a TTM basis, the stock is trading at a price to book value multiple of 8.0x as compared to the industry average (Chemicals) of 4.1x on TTM basis.  We have also considered 14-day RSI, and default values have been used. After careful consideration, it was observed that the stock is currently in the overbought zone, hence we expect a marginal fall in the stock price in the coming times. On a technical front, the stock of HZR has a support level of ~$0.541 and a resistance level of ~$0.636.Thus, considering the RSI levels, upside movement in the stock within the past few months, and current trading levels, we suggest investors to book profit and give a “Sell” rating on the stock at the current market price of $0.580 per share, up by 3.571% on 3^rd November 2020.

HZR Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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