Tribune Resources Limited

TBR Details

June 2021 Quarter (Q4FY21) Highlights: Tribune Resources Limited (ASX: TBR) engages in the exploration, development, and production activities at the 100% East Kundana Joint Venture (EKJV) tenements.

• EKJV Production (49% interest): TBR produced 15,863 ounces of gold from Rand and Tribune mines (from the EKJV operations) in Q4FY21 vs 16,474 ounces in Q3FY21 due to damage and seismicity in Pegasus in the March 2021 quarter.
• Japa Project Status (100%): The company continued the exploration drilling campaign for the Inferred resource classification at the Japa Project in Ghana. TBR completed a combined reverse circulation and diamond core drilling of 15,617 metres in 104 holes during Q4FY21.
• Diwalwal Gold Project (60%): TBR completed 3,150 metres of diamond core drilling in the Philippines at the Diwalwal project for the resource definition of the Balite Vein.
• Liquidity Position: TBR held $4.163 million cash and cash equivalents as of 30 June 2021 versus $6.674 million as of 31 March 2021.
• Share Buy-Back: TBR announced a buyback plan in Q4FY21; however, it didn't buy back any shares during the reporting period. The current buyback is open till 21 February 2022 unless reported otherwise.
  

Total Revenue & Net Income from 2HFY19-1HFY21; (Analysis by Kalkine Group)

Key Risks:

• Estimation Risks: The company faces the risk of estimating resources and minerals available for mining. Any wrong estimation or interpretation of assay results can impact the financials and projections.
• Forex Changes: TBR operates projects in the Philippines, Ghana, and Australia, exposed to foreign currency rate changes.
  

Outlook:

• TBR expects the next quarter production in line with the June 2021 quarter production.
• The company will continue drilling through the September 2021 quarter to finish the diamond drilling part of the Adiembra Resource definition program. Based on the drilling results, TBR will update on the resource estimation for Adiembra.

Stock Recommendation: The stock of TBR gave a negative return of 2.91% in the past three months and a positive return of 2.04% in the past six months. The stock is currently trading lower than the 52-weeks’ average price level band of $4.600 - $8.200. On a TTM basis, the stock of TBR is trading at a price to book value multiple of 1.2x, lower than the industry (Metals & Mining) median of 2.7x, thus seems undervalued. Considering the current trading levels, positive net operating cash flows in Q4FY21, low debt-to-equity ratio in 1HFY21, valuation on a TTM basis, decent outlook for drilling and resource estimation at the Japa and Diwalwal projects, and associated risks of COVID-19 uncertainty, forex and gold price changes, we give a ‘Speculative Buy’ rating on the stock at the current market price of $5.000, as on 9 September 2021.

TBR 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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