Cyprium Metals Limited

CYM Details

Cyprium Metals Limited (ASX: CYM) is an exploration company with copper and gold projects located in WA. It operates Cue Copper Project, the Nanadie Well Copper-Gold Project, and Paterson Copper Projects.

Project Updates:

• It had received assay results from the 28 RC drilling program at Nifty West. The latest intersections proved significant copper mineralization at 80-100m thick. This provides scope for large-scale open pit development.
• CYM conducted a Nifty Heap Leach Restart development activity at its copper project during the quarter ending December 31, 2021. As a result, it had an updated resources estimate of 45.9MT @1.6% Cu for 732.2k contained copper. The company also commenced a drilling program to expand the resources.
• During the quarter, the company completed infill and extensional drilling at its Maroochydore copper project.
• It had received assays from the final two diamond drilling holes at Nanadie Well.

Recent Financial Update:

• Widening Losses: CYM posted an increase in net loss from $894k in H1FY20 to $10.93 million in H1FY21. This was owing to a surge in employee-related expenses and administrative costs.
• Strong Net Worth: Its adequate equity base provides strong protection to accumulated losses and net worth reached $100.16 million as of June 30, 2021.
• Latest Cash Position: During December 2021 quarter, CYM posted negative operating cash flows totaling $6.49 million with nil cash receipts from customers. It had closed the period with a cash balance of $25.47 million.

Cash Position (Source: Analysis by Kalkine Group)

Key Risks: CYM is exposed to a shortage of skilled labour on the backdrop of the pandemic which may delay the drilling activities. Delay in regulatory clearances for exploration permits may lead to cost outrun. Nil revenue-generating assets and negative operating cash flows may burn the existing liquidity and hence the company is exposed to funding risk.

Outlook: The assays from Nifty West drilling may give potential upliftment in the resources estimate of copper metal which is slated to release in the first half of FY22. Following the refurbishment activities, CYM plans to begin copper production at Nifty by the second half of 2023. The Nanadie well holds potential for further exploration with extensive copper deposits proved from the recent drilling campaign.

Stock Recommendation: The stock of CYM has been corrected by ~24.32% in the past three months. The stock just recovered from its 52-week low price of $0.135. On a TTM basis, the stock is trading at a P/BV multiple of 0.8x in contrast to the industry median of 2.5x (Metals & Mining). This signifies that the stock is undervalued at current trading levels.  Considering the favourable drilling program at Nifty West, updated resources estimate for copper, decent net worth base, modest outlook, current trading levels, valuation on a TTM basis, and key risks associated with the business, we recommend “Speculative Buy” on the stock at the closing market price of $0.140, as on 4 February 2022.

CYM Daily Technical Chart, Data Source: REFINITIV

Tempus Resources Ltd.

TMR Details

Tempus Resources Ltd. (ASX: TMR) operates as a gold exploration company with assets in Australia, Canada, and Ecuador. It owns the Blackdome-Elizabeth project located in Southern British Columbia. It has the Rio Zarza project located adjacent to Lundin Gold’s Fruta del Norte project.   

Recent Quarter Updates:

• TMR completed the phase 1 drilling program at Elizabeth gold project with 7 holes drilled for ~1,435 metres. From June to November 2021, TMR drilled about 28 holes for a total of 7,740 metres.
• Discovery of the new Blue Vein with drill hole EZ-21-12 with an intersection of visible gold in the drill core.
• TMR intends to rehabilitate the underground development at Elizabeth and develop 400 metres of drift parallel to the orientation of the veins for the further exploration program.
• It had reported nil customer receipts and incurred cash outflows of $1.847 million from operation primarily due to exploration and evaluation-related expenses.
• TMR closed the period with a cash balance of $2.47 million as of December 31, 2021. This is lower than the $4.34 million posted in the preceding quarter.
• As per the updates, TMR is progressing with the phase 2 program at Valle Del Tigre for gold and copper discovery. Results from phase 1 drilling confirm the presence of gold and copper mineralization.
• For three months ending September 2021, TMR posted a net loss of $615.3k as compared to the loss of $295.07k in the prior year.

Cash Position (Source: Analysis by Kalkine Group)

Key Risks: TMR is an early-stage exploration company. Delays in drilling programs and regulatory approvals may burn its existing cash balance. The ongoing pandemic and its impact on labour market have a material impact on its mining operations.

Outlook: The Blue Vein demonstrated Bonanza gold grades of up to 71g/t over 0.5 metres. This provides a significant production opportunity. The company continues its diamond drilling campaign at its SW Vein.

Technical Analysis: On a daily chart, TMR stock prices are sustaining above the horizontal trend line support and taking the support of the same. The momentum oscillator RSI (14-period) is trading at ~47.13 level. However, prices are trading below the trend-following indicators 21-period SMA, which may act as a resistance zone. An important support level for the stock is placed at AUD 0.10 while the key resistance level is placed at AUD 0.15.

Stock Recommendation: The stock of TMR has been corrected by ~29.41% in the past three months. The stock is trading below to the average of the 52-week low price of $0.105 and the 52-week high price of $0.310. Considering the above technical analysis, drilling updates, decent cash balance, and key risks associated with the business, we recommend “Speculative Buy” on the stock at the current market price of $0.1175, as on 4 February 2022, 10:50 AM (GMT+10), Sydney, Eastern Australia.

TMR Daily Technical Chart, Data Source: REFINITIV

Disclosure: Cyprium Metals Limited (Company) is a client of Kalkine Media Pty Ltd (Kalkine Media), an affiliate of Kalkine. However, under no circumstances have Kalkine or its related entities been, directly or indirectly influenced in making any related insights concerning Company as contained in this report, and no form of compensation is or will be received by Kalkine, Kalkine Media or Kalkine’s other related entities for the publication of this report.

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 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.

Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.

Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.

There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.

You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.

The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.

Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services.

Please also read our Terms & Conditions and Financial Services Guide for further information.

On the date of publishing this report (referred to on the Kalkine website), employees and/or associates of Kalkine and its related entities do not hold interests in any of the securities or other financial products covered on the Kalkine website unless those persons comply with certain safeguards, procedures, and disclosures.

Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website.