THE HYDROPONICS COMPANY LIMITED (ASX: THC)

Localisation of clinic-model to Australian Market: Last five days of trading brought a horrendous plunge in the stock price of The Hydroponics Company Limited with a 13.33% drop (as at February 06, 2018) at the back of market correction driven by headwinds at Wall Street. Overall, the pot stocks were seen to be slipping a lot in the past two days specifically. However, the winds changed the direction with a 6.3% rise for THC on February 07, 2018 post a wave of stabilisation that prevailed at global and domestic level along with the high rise of Canopy Growth Corp and Aurora Cannabis on the Toronto stock exchange. Not just THC, but other pot stocks including AusCann Group, Zelda Therapeutics and Creso Pharma were seen to be surging high.

At the beginning of this year, THC welcomed the Federal Government’s initiative of allowing export of Medicinal Cannabis products from Australia and is poised to take advantage of the relationship with its international partners to leverage from this development. The group targets to capitalise on the surging global cannabis market through strategic assets and expanding the core businesses in 2018. The group has now updated the market about commencement of National Access Cannabis clinic development in Australia based on its recent visit to Canada with an aim to replicate the clinic-based model (patient centred tailored platform) in Australia. Under the move, Systems Implementation Manager from NAC Canada will be made available onsite in Sydney to support the development of clinic model in Australia. The group aims to have first clinic to be opened in Q2 2018. Given the developments in view of prevailing volatility, we put a “Hold” on the stock at the current price of  $0.76
 

NORTHERN COBALT LIMITED (ASX: N27)

Growing tenure at Wollogorang: Northern Cobalt was seen to surge up 12.98% on February 07, 2018 post a 20% dip seen in last five days. The group seems to be recovering from the latest loss at the back of market downtrend. Meanwhile, N27’s Wollogorang Project tenure has been recently indicated to grow by 341% and the group has granted five new tenements surrounding the Wollogorang Cobalt Project reflecting an increase in granted tenure from 1,131 km² to 4,986 km². The step out drilling at Stanton cobalt resource has lately confirmed mineralisation that is open to south-east and north-west. Further, the key aspects included intersections at 19 metres at 0.29% cobalt (Co) on southern extension to Stanton Resource with 1 metre @ 1.31% Co, 5 metres at 0.19% Co and 2 metres at 0.19% Co. The group will release diamond drilling results in March 2018. The update is an encouraging one and the stock might find support from view on cobalt prices in the long term. Nonetheless, we wait for the market stabilisation attain more positive levels, and give a “Hold” at the current price of $0.435


Significant Intersections at Stanton Cobalt Deposit (Source: Company Reports)

 
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