Tempus Resources Limited
TMR Details
Project Update: Tempus Resources Limited (ASX: TMR) works into mining and exploration, where its projects are Blackdome-Elizabeth project, Zamora Projects, Rio Zarza and Valle del Tigre projects. TMR has started the Phase II exploration program at Valle de Tigre Project (VdT), located in south-eastern Ecuador. An area of ~12.5 square kilometres will be covered, including Mobile Metals Ion (MMI) geochemistry sampling program, where ~1,100 MMI samples will be taken. Presence of gold and copper mineralisation has been confirmed at the project.
Q1FY22 (Un-audited) Activities Update:
- Elizabeth Gold Project: After 17 holes completion, gold was identified from the three drill holes at its Blue Vein covering 5,200 metres at the Elizabeth Project. Currently, Tempus has suspended drilling there until it receives pending approval for work amendment for extension of Lower Portal adit for access for underground drilling.
- Capital Raise: The company completed a private placement of ~$6.3 million through issuing 24.99 million shares at a price of ~$0.251 per share for continuing the activities at Elizabeth and Ecuador.
- Profitability: The net losses for the 1QFY22 were to ~$0.62 million versus ~$0.29 million in 1QFY21.
- Cash Balance: The outflow from operating activities was logged in as ~$2.59 million including ~$1.86 million as exploration and evaluation expenses for the first quarter. The company recorded cash receipts as Nil and closed its books at the end of 30th September 2021 with a cash balance of ~$4.34 million versus ~$1.02 million at the end of 30th June 2021.
Cash Outflow Highlights (Source: Analysis by Kalkine Group)
Key Risks: The company is vulnerable to the risks associated with the impacts of COVID-19 and the new variant Omicron, which affects the employees, operational functions, and thereby profitability. It is also susceptible to the risks associated with the labour market and fluctuation in the commodities.
Outlook: TMR is ready to finish its further drilling at the Blackdome Gold Mine Project in 2022 after the completion of alteration study, indicating a strong potential exists to find additional gold mineralisation.
Technical Analysis: On the daily chart, TMR prices are hovering near the horizontal trend line support zone and taking support of the same. Moreover, the momentum oscillator RSI (14-period) is trading at ~43.74 level, reversing form the lower levels. However, the prices are trading below the trend-following indicators 21-period and 50- period SMA, which may act as a resistance level for the stock. Now an immediate support level for the stock appears at AUD 0.105 while the resistance is at AUD 0.130
Stock Recommendation: The stock of the company has been corrected by ~41.46% in the past nine months. The stock is currently trading lower than the average 52-week price level band of $0.105 -$0.310. Considering its mining 1QFY22 updates at Elizabeth Gold, upcoming drilling program at Blackdome, anomalies found, minimal debt levels in FY21, current trading level, and key risks associated with the business, we recommend a ‘Speculative Buy’ rating on the stock at the current market price of $0.115, 10:30 AM (GMT+10), Sydney, Eastern Australia, as on 24th January 2022.
TMR 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 the 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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