Tribune Resources Limited

TBR Details

Q1FY22 (30 September 2021) Result Highlights: Tribune Resources Limited (ASX: TBR) undertakes exploration activities at the East Kundana Joint Venture (EKJV) tenements, the Diwalwal gold project in the Philippines, and the Japa gold project in Ghana.

• Production Update from the EKJV Tenements: The company reported that the Raleigh underground mine was under care and maintenance during Q1FY22. The gold production from the Rubicon-Hornet-Pegasus underground mine was ~16,216 oz in Q1FY22 versus ~22,859 oz in Q4FY21. TBR’s gold production share stood at 5,959 oz (ounces) for the quarter.
• Gold Sales: TBR and Rand Mining Limited (a subsidiary of TBR) sold ~31,198 tonnes of low-grade ore to EVN (Evolution Mining Limited) during the quarter.
• Financial Update: TBR held ~$6.96 million cash and cash equivalents as of 30 September 2021 versus ~$4.16 million as of 30 June 2021. The net operating cash inflows improved to $7.51 million in Q1FY22 compared to $1.03 million in Q4FY21 (June quarter) due to higher cash receipts received from customers.
• Exploration Update: TBR continued with the exploration program on the Japa and Diwalwal gold projects during the quarter.

Reduction in Production Costs, Highlights; (Analysis by Kalkine Group)

Key Risks: The company faces the risk of resource estimation on early-stage projects, regulatory protocols and delays, and COVID-19 uncertainty regarding the skilled labour movement.

Outlook:

• The company expects similar gold production from the EKJV tenements in Q2FY22.
• TBR has completed the exploration drilling on the Adiembra resource and awaits resources estimation at the Japa Project in Ghana.
• TBR plans to continue with the reverse circulation and diamond drilling in White Lake (south-eastern part of the project) at the Seven Mile Hill JV project.

Stock Recommendation: The stock of TBR gave a negative return of ~0.704% in the past three months and a negative return of ~1.69% in the past six months. The stock is currently trading lower than the 52-weeks’ average price level band of $4.600 - $6.480. On a TTM basis, the stock of TBR is trading at a price to book value multiple of 1.0x lower than the industry (Metals & Mining) median of 2.3x, thus seems undervalued. Considering the low trading levels, planned drilling for the resource estimation at the Japa project and continued drilling at the Diwalwal project, increase in cash receipts, and net cash inflows in Q1FY22, valuation on a TTM basis, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the closing market price of $4.730, down by 1.253% as of 21 December 2021.

TBR Daily Technical Chart, Data Source: REFINITIV 

Tempus Resources Limited

TMR Details

Change of Registered Office: Tempus Resources Limited (ASX: TMR) is engaged in gold exploration with projects in Australia, Canada, and Ecuador. On 20 December 2021, TMR notified that Automic Pty Limited has relocated its office to Level 5, 191 St Georges Terrace in Perth.

Further Gold Potential from the Blue Vein Assays: TMR has received the assay results from the three drill holes intersected at the Blue Vein (drill-hole EZ-21-19). The drilling exhibited multiple intersections and high-grade mineralisation in the drill-hole EZ-21-19 which continues down the dip.

• TMR awaits the assay results for the remaining nine (9) drill holes from the FY21 drill program, which includes four (4) holes from Blue Vein.
• TMR has terminated drilling at the project for the season subject to the grant of approval of the Notice of Work amendment for the development of Lower Portal adit access for exploration.

Q1FY22 (Quarter ending 30 September 2021) Highlights: 

• TMR incurred ~$1.85 million on the exploration expenditure on Canadian and Ecuador projects during the quarter.
• In Q1FY22, TMR focused on exploration drilling at the SW Vein at the Elizabeth gold project. It undertook ~5,200 metres of drilling at 17 holes at the project.
• In August 2021, TMR raised ~$6.28 million via a private placement at $0.251 per share. It issued ~24.99 million shares via two tranches of shares. The placement proceeds from the Canadian tranche will be deployed for the drilling program at the Elizabeth project and expand the underground drilling extensions of the vein systems identified.
• TMR held ~$4.34 million cash reserves as of 30 September 2021.

Net Loss Highlights; (Analysis by Kalkine Group)

Key Risks: The company faces the risk of the gold discovery at the targeted deposits, adequate funds for exploration activities, project commercialisation, and correct resource estimation.

Outlook:

• TMR plans to complete additional exploration drilling at the Blackdome gold project in 2022.
• At the Valle Del Tigre project, TMR plans to finish a large-scale follow-up soil sampling program in Q2FY22.
• Blue Vein demonstrates the potential for the discovery of additional vein sets at the Elizabeth project. TMR expects to discover multiple veins (West Vein, No. 9 Vein, Main Vein) for drilling and add new gold resources.

Technical Commentary: TMR price broke the downward sloping trend line by upside and prices are sustaining around the breakout level from past three weeks. RSI (14-period) is hovering near to oversold region at ~34 level on a monthly chart that indicates stock might find profit booking at lower levels. Immediate support level is ~ AUD 0.099, while immediate resistance level is ~AUD 0.130.

Stock Recommendation: The stock of TMR gave a negative return of ~42.49% in the past three months and a negative return of ~39.47% in the past six months. The stock is trading lower than the average 52-week price level band of $0.105-$0.310. Considering the low trading levels, low debt levels, decent cash position, positive assay results from the Blue Vein drill hole and exploration on the Blackdome gold project in FY22, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the current market price of $0.110, as of 21 December 2021, 10:30 AM (GMT+10), Sydney, Eastern Australia.

TMR Daily Technical Chart, Data Source: REFINITIV 

Resolution Minerals Limited

RML Details

Q1FY22 (30 September 2021) Results: Resolution Minerals Limited (ASX: RML) is involved in the exploration battery metals like copper, gold, cobalt, and vanadium. Its projects portfolio consists of the Wollogorang project, Benmara project, 64 North gold project, and Snettisham iron ore/vanadium project.

• During Q1FY22, RML finished the trenching program at the Tourmaline Ridge prospect at the 64North gold project and awaits the assay results. It also awaits assay results from the historic diamond drill hole (AGGP-1) located at the Sunrise Prospect.
• RML entered a JV and farm-in agreement with copper-producing OZ Minerals Limited (ASX: OZL) for the Wollogorang project in the Northern Territor As agreed, OZ will incur 100% exploration expenditure extending till the FID (final investment decision) stage to mine.
• RML sold off its Snettisham project in Alaska) to Millrock Resources on a share of proceeds agreement.
• RML has ~$1.98 million cash at the bank as of 30 September 2021.

Post-Quarter-End Updates:

Issue of Unlisted Options: On 26 October 2021, RML closed an SPP wherein it issued ~86.92 million shares at $0.02 per share and offered to issue options (attached with the shares) in the ratio of 2: 1 at an exercise price of $0.03 per share.

RML issued ~22.12 million unlisted options (RMLAK) on 3 December 2021 and ~15.02 million unquoted options on 20 December 2021 under the SPP options Prospectus lodged with AISC on 15 November 2021.

100% Acquisition of the Benmara Project: Recently, RML opted to exercise the right to fully acquire the Benmara Project from SER (Strategic Energy Resources Limited). RML purchased the Tenement (EL32228) for ~$250,000 via the issuance of ~13.77 million shares approved at the November 2021 AGM by the shareholders. The consideration shares were declared to be issued on 12 November 2021 and expected to lead to SER holding ~16.27 million shares in RML.

Total Assets & Total Liabilities Highlights; (Analysis by Kalkine Group)

Key Risks: The company faces the risk of exploration and mining, raising of capital for seamless exploration programs, regulatory changes. Macro-events such as COVID-19 disrupt the availability and cost of skilled labour.

Outlook:

• RML plans to undertake further trenching, drilling, and geophysics programs on the Tourmaline Ridge prospect.
• RML has been actively drill testing and trenching multiple targets on projects in Alaska and Northern Territory. It awaits assay results and plans exploration programs on the Benmara project (battery metals and uranium) and 64North gold project in Alaska.
• OZL plans to begin an extensive drilling program in FY22 and kick off Phase I as per the contract.
• As per the agreement, Millrock has undertaken to finalise a project transaction wherein RML will be entitled to receive ~30% of any consideration subject to transaction completion before 30 August 2022.

Stock Recommendation: The stock of RML gave a negative return of ~21.05% in the past three months and a negative return of ~28.57% in the past six months. The stock is currently trading at par to its 52-weeks’ low level of $0.015. On a TTM basis, the stock of RML is trading at a price to book value multiple of 0.5x lower than the industry (Metals & Mining) median of 2.3x, thus seems undervalued. Considering the current trading levels, nil debt levels, a continuation of exploration programs on the 64North project, the start of drilling at the Wollogorang project by OZL, valuation on a TTM basis, and associated key business risks, we give a ‘Speculative Buy’ rating on the stock at the closing market price of $0.015, down by 6.251%, as of 21 December 2021.

RML 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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