Predictive Discovery Limited

PDI Details

Operational Update: Predictive Discovery Limited (ASX: PDI) is primarily engaged in the exploration and production of gold with a portfolio of Kankan, Nonta, Kaninko, and Boroto projects in Guinea, West Africa.

• DD and RC Drilling Program Underway: The 60,000-meter Diamond (DD) and Reverse Cycle (RC) drilling program stands underway and is forecasted to increase substantially and upgrade the inferred 3.65Moz Bankan gold Resource.
• Update on Extension and Infill Drilling: Six drill rigs remain on-site with extension and infill drilling underway at the Bankan Creek and NE Bankan gold deposits, alongside updated Resource estimates expected in Q3FY22.

Cash Flow Movement; Analysis by Kalkine Group

Key Risks and Challenges

PDI is exposed to the risk of resource estimation and expansion, regulatory constraints, obstacles in funding activities, and uncertainty of commercialization of production.

Outlook

PDI is expected to deliver Scoping Study to the Government of Guinea by the end of CY23 and remains well-positioned to be awarded as Guinea’s largest gold mine in five years with a concrete strategy to build the resource base and take Banken into the production stage.

Technical Analysis: PDI's prices are consolidating at the higher levels and continuously getting support from the 50-period SMA, indicating the possibility of upside movement hereon. However, the 21-Period SMA is above CMP and may act as the resistance level for the stock. The leading indicator RSI (14-period) is hovering around the mid-point and showing a reading of 47.13.

Stock Recommendation: The stock of PDI gave a negative return of ~9.09% and ~18.37% in the past three and six months, respectively. The stock is currently trading higher than the 52-weeks average price level band of $0.074 - $0.295. Given the decent exploration and extension activities, favourable commercialisation prospects, a comprehensive scoping study, current trading levels, and upside indicated by valuation, we give a “Speculative Buy” recommendation on the stock at the closing market price of $0.200, up by ~2.564% as of 25 May 2022.

PDI 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 depend on the investors’ appetite for upside potential, risks, holding duration, and previous holdings. Investors can consider exiting the stock if the Target Price mentioned as per the valuation has been achieved and is subject to the aforementioned factors.

Technical Indicators Defined: -

Support: A level where-in stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in stock prices tend to find resistance when they are rising, and an 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.

The Blue colour line reflects the 21-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 21-period, prices are currently in a bullish trend (Vice – Versa).

The Red colour line reflects the 50-period moving average. SMA helps to identify existing price trends. If the prices are trading above the 50-period, prices are currently in a bullish trend (Vice – Versa).

The Yellow colour line represents the Trendline.

The Purple colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period), which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status, while a reading of 30 or below suggests an oversold status.

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