Tribune Resources Limited  

TBR Details

3QFY21 Activities Highlights: Tribune Resources Limited (ASX: TBR) is engaged in the development of exploration, development, and production activities at its East Kundana Joint Venture (EKJV) tenements. The Company's subsidiaries include Tribune Resources (Ghana) Limited, Mount Manning Resources Limited, Melville Parade Pty Ltd and Rand Mining Limited. TBR has reported 131,406 tonnes of ore processed at Rand and Tribune Toll at 4.13 grams per tonne (g/t). The ore was processed from the EKJV operations at three mills in the district and contributing 98,554 tonnes towards TBR’s shares. TBR has reported a lower mine production at the EKJV mine on the back of lower stoping production due to seismicity and damage in Pegasus in the previous quarter. TBR has reported resource definition and drilling at the Japa project with 22,967mtrs completed in 144 holes. Moreover, the diamond core drilling continued at the Diwalwal Gold project, Philippines with 2,654 metres completed in 9 holes.

1HFY21 Financial Highlights: TBR has registered an increase in revenue to $103.72mn in 1HFY21 against $95.29mn in 1HFY20. Similarly, the company has posted an increase in profit to $25.48mn in 1HFY21 against $24.74mn in 1HFY20. TBR has seen a decline in its cash balance to $6.59mn as on 31 December 2020 against $14.02mn as on 30 June 2020.

Revenue trend (Source: Analysis by Kalkine Group)

Key Risks: The company is engaged in gold production. Thus, any fluctuation in gold prices may impact the financials of the company. In addition, the company is exposed to exploration risks, which may impact the business severely. 

Outlook: Mine production through the EKJV mine is expected to be similar in 4QFY21 compared to the levels witnessed in 3QFY21 on the back of aftereffects from seismicity and damage to Pegasus in 2QFY21. 

Stock Recommendation: The stock of TBR gave a return of ~-1.76% in the last one month and a return of ~-5.12% in the last three months. The current market capitalisation of TBR stands at ~$254.47mn as of 22 June 2021. The stock is currently trading below the average 52-weeks’ price level range of ~$4.60-~$8.87. On a TTM basis, the stock of TBR is trading at a P/BV multiple of 1.1x lower than the industry (Metals & Mining) median of 2.7x, thus seems under-valued. Considering the company has registered an increase in revenue in 1HFY21, increase in bottom-line in 1HFY21, completion of drilling for ongoing projects in 3QFY21, current trading levels, and valuation on TTM basis, we recommend a “Speculative Buy” rating on the stock at the current market price of $4.85, as on Jun 22, 2021, 11.28 AM (GMT+10), Sydney, Eastern Australia.

TBR Daily Technical Chart, Data Source: REFINITIV

Aeon Metals Limited 

AML Details

Commenced Metallurgical Test Work: Aeon Metals Limited (ASX: AML) is engaged in the exploration and development of the Walford Creek base metal project and exploration for base and precious metals mineralization in Northwest Queensland. AML has informed on commencing metallurgical test work program for its 100% owned Wallford Creek Copper-Cobalt Project (Walford Creek). The company has already completed test work for bulk sulphide flotation earlier. Therefore, the upcoming test work is more focused on optimisation rather than validation. 

3QFY21 Activities:  AML has reported number of activities took place in 3QFY21. AML has appointed Dr Fred Hess to the role of Interim Managing Director and CEO on 12 March 2021. A Pre-Feasibility Study (PFS) program had been initiated under which scope of work was revised to give emphasis on a flowsheet design and the company is targeting production of a bulk sulphide concentrate. The company expects benefits of producing a bulk sulphide concentrate over base metal concentrate in the future by reducing its operational costs.

1HFY21 Financial Highlights: AML has incurred a loss of $2.49mn in 1HFY21. The company has not reported its operational revenue in 1HFY21. AML has seen an increase in its cash balance to $3.04mn as on 31 December 2020 against $2.42mn as on 30 June 2020.

Cash Balance (Source: Analysis by Kalkine Group)

Key Risks: The company is engaged in metal production. Thus, any fluctuation in commodity prices may impact the financials of the company. In addition, the company is exposed to exploration risks, which may impact the business severely.

Outlook: AML has initiated Phase 1A for the optimization of testwork to produce bulk sulphide concentrates at the ALS laboratory. The result for Phase 1A is expected to be released by 3QCY2021.

Stock Recommendation: The stock of AML gave a return of ~-8.74% in the last one month and a return of ~-1.35% in the last three months. The current market capitalisation of AML stands at ~$50.14mn as of 22 June 2021. The stock is currently trading below the average 52-weeks’ price level range of ~$0.063~$0.225. On a TTM basis, the stock of AML is trading at a P/BV multiple of 0.8x lower than the industry (Metals & Mining) median of 2.7x, thus seems under-valued. Considering the company has registered an increase in its cash balance, nil long-term liabilities, current trading levels, and valuation on TTM basis, we recommend a “Speculative Buy” rating on the stock at the current market price of $0.071, as on Jun 22, 2021, 1.01 PM (GMT+10), Sydney, Eastern Australia.

AML 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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