Stocks’ Details

Carawine Resources Limited

Commencement of Drilling Program: Carawine Resources Limited (ASX: CWX) is an exploration company, which is focused on exploring and developing economic gold, copper, and base metal deposits within Australia. The market capitalisation of the company stood at ~$31.76 Mn as on 19^th October 2020. In a recent presentation, the company stated that it is planning to commence major drilling campaigns in active exploration regions in the near-term. This includes Tropicana North WA, Jamieson VIC, Fraser Range WA, etc. For the year ended 30^th June 2020, the company reported revenue amounting to $120,759 as compared to $52,178 in FY19. Net loss after tax for the period amounted to $1,282,188 against $604,365 in FY19.

Key Financials (Source: Company Reports)

Equity Raising for Advancement of Exploration Activities: On 28^th September 2020, the company announced the capital raising of $6 million in a two-tranche placement at $0.20 per share. The company added that the placement was strongly encouraged by its existing professional and sophisticated investors, along with a number of new institutional and sophisticated investors. The company would use the proceeds to advance exploration at its Tropicana North and Fraser Range Projects in Western Australia, and the Jamieson Project in Victoria.

Outlook: Looking forward, the company is aiming value uplift via discovery on its various projects. For 1H FY21, the company has planned various drilling in Rhyolite Creek Prospect. The company has scheduled to conduct its Annual Shareholders Meeting on 17^th November 2020.

Stock Recommendation: As on 15^th October 2020, the cash balance of the company stood at $4.6 million. The 52-week low-high range for the stock stands at $0.125 - $0.385, respectively. The stock of CWX is trading at a price to book value multiple of 3.3x as compared to the industry median (Basic Materials) of 2.7x on TTM basis. The stock of CWX has surged by 78.94% and 61.90% in the last three and six months, respectively. On a technical analysis front, the stock of CWX has a support level of ~$0.279 and a resistance level of ~$0.384. Therefore, considering the past movement in the stock and current trading level, we advise the investors to book profit and give a “Sell” recommendation on the stock at the current market price of $0.340 per share, up by 3.030% on 19^th October 2020.

Navarre Minerals Limited

Drilling Results at Tomorrow Zone: Navarre Minerals Limited (ASX: NML) is an Australian-based gold exploration company focused on discovering large, long-life, and high-grade gold deposits in under-explored areas of Victoria’s premier gold districts. The market capitalisation of the company stood at $111.20 Mn as on 19^th October 2020. Recently, the company along with Catalyst Metals Limited announced the results of four-hole, 1,320m diamond drilling program on the Tomorrow Zone, which showcased extension of a discordant west-dipping fault complex thought to control gold emplacement. The highlight intercept from the drilling program includes 1m @ 82.3 g/t Au from 261m in DDT026. For the year ended 30^th June 2020, the company reported net loss amounting to $984,124 against $866,104 in FY19. During FY20, NML raised $4,752,009 (before transaction costs) via a share placement and the exercise of $2,000 employee options.

Key Financials (Source: Company Reports)

What to Expect: The company is planning to finish the 10,000m resource definition diamond drilling program at Resolution Lode by the end of 2020. In addition, the company is also focused on advancing other investments in partnership as non-operator.

Stock Recommendation: The company is in a strong financial position with a cash balance of around $12 million as on 30^th September 2020. In addition, the company is likely to receive strong support from major shareholders, which include Kirkland Lake, VBS & 1832 Asset Management. The stock of NML is inclined towards its 52-week high level of $0.240. In addition, the stock is trading at a price to book value multiple of 5.4x as compared to the industry median (Basic Materials) of 2.7x on TTM basis. On a technical analysis front, the stock of NML has a support level of ~$0.216 and a resistance level of ~$0.240. Thus, considering the current trading levels, and higher valuation on TTM basis, we advise investors to book profit and give a “Sell” recommendation on the stock at the current market price of $0.235 per share, up by 14.634% on 19^th October 2020.

Red Mountain Mining Limited

Capital Raising for Development of Various Projects: Red Mountain Mining Limited (ASX: RMX) is involved in the exploration of gold and cobalt. The market capitalisation of the company stood at $13.52 Mn as on 19^th October 2020. On 8^th October 2020, RMX advised the market that it has concluded heritage clearance survey and pre-drilling earthworks at Mt Maitland. Previously, the company has finished capital raising of $800,000 (before costs) via placement of 114,285,714 shares at a price of A$0.007 per share to professional and sophisticated investors.

The funds raised would be utilised for the upcoming work programme at Mt Maitland. RMX would also use funds for the development at Koonenberry gold project in NSW, the Mukabi Kasiri project in the DRC, assessment and due diligence of new mineral assets, general working capital and costs of the offer. For the year ended 30^th June 2020, the company reported revenue amounting to $51,384 as compared to $92,026 in FY19. Net loss after tax for the period amounted to $1,960,519 against $1,164,964 in FY19.

Key Financials (Source: Company Reports)

Outlook: Looking forward, the company is on track to focus on additional opportunities to improve shareholder’s value. In addition, the company is likely to conduct its 2020 Annual General Meeting on 30^th November 2020.

Stock Recommendation: The company closed the year with a cash balance of $1.4 Mn against $2.2Mn in FY19. Currently, the stock of RMX is trading towards its 52-weeks’ high level of $ 0.015. In the past three and six months, the stock of RMX has moved up by 160% and 333.33%, respectively. In addition, the stock of RMX is trading at a price to book value multiple of 7.4x as compared to the industry median (Basic Materials) of 2.7x on TTM basis. On the technical analysis front, the stock price of RMX has a support level of ~$0.012 and a resistance level of ~$0.015.  Therefore, considering the steep upside movement in the stock price in the past few months and current trading levels, we give a “Sell” recommendation on the stock at the current market price of $0.013 per share, up by 8.333% on 19^th October 2020.

Comparative Price Chart (Source: Refinitiv, Thomson Reuters)

Disclaimer  

The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as personalised advice.