March 21, 2023
By Finance News Network | More Articles by Finance News Network
by Peter Milios
The sharemarket had a positive day on Tuesday, finishing 0.82 per cent higher at 6,955.40, with the financials sector leading the way with a 1.2 per cent gain.
Macquarie (ASX:MQG) added 3.3 per cent, while Incitec Pivot (ASX:IPL) rose 3.8 per cent due to the announcement of a $2.5 billion deal to sell its ammonia plant in the US.
The energy and materials sector also rebounded. New Hope Coal (ASX:NHC) surged 8.6 per cent after reporting better than expected profits and dividends.
US futures closed slightly higher, with Euro Stoxx 50 futures up 0.5 per cent.
Futures
The Dow Jones futures are pointing to a rise of 8 points.
The S&P 500 futures are pointing to a rise of 2.25 points.
The Nasdaq futures are pointing to a rise of 8 points.
The SPI futures are pointing to a rise of 58 points when the market next opens.
Best and worst performers
The best-performing sector was Consumer Discretionary, up 1.5 per cent. The worst-performing sector was Utilities, down 1.63 per cent.
The best-performing large cap was Incitec Pivot (ASX:IPL), closing 3.85 per cent higher at $3.24. It was followed by shares in Yancoal Australia (ASX:YAL) and Whitehaven Coal (ASX:WHC).
The worst-performing large cap was Meridian Energy (ASX:MEZ), closing 3.29 per cent lower at $4.70. It was followed by shares in Cleanaway Waste Management (ASX:CWY) and Origin Energy (ASX:ORG).
Asian markets
Japan’s Nikkei has lost 1.42 per cent.
Hong Kong’s Hang Seng has gained 0.25 per cent.
China’s Shanghai Composite has gained 0.39 per cent.
US government examining ways to guarantee all bank deposits if crisis worsens
Bloomberg cited people with knowledge of the calls who said Treasury staff reviewing ways in which regulators could use emergency authority to temporarily guarantee deposits of more than $250K on most accounts without formal approval from Congress. Officials don’t view such an action as necessary, though are developing a strategy if situation worsens. Earlier, Bloomberg reported coalition of midsize US banks had asked regulators to extend FDIC insurance to all deposits for next two years. One way would involve using Treasury Department’s authority to leverage money from Exchange Stabilization Fund, which has typically been used as a backstop for Fed’s emergency lending facilities. Hopes of obtaining Congressional authority to guarantee all bank deposits above $250K were dealt a blow after , House Freedom Caucus came out in opposition (Bloomberg).
Company news
Besra Gold (ASX:BEZ) has announced an up to US$300m for a non-binding drawdown offtake funding facility term sheet, signed with major shareholder Quantum Metal Recovery, to facilitate development of the 3 million ounce Bau Gold Project. Besra’s Chairwoman, Jocelyn Bennett commented: “We [now] plan to commence an update of the 2013 feasibility study and accelerate our plans to begin pilot production in the calendar year 2023.” Shares closed 52.5 per cent higher at 6.1 cents
Mincor Resources (ASX:MCR) has received a $1.40 cash takeover offer from Wyloo Consolidated Investments, an investment vehicle of Australian billionaire Twiggy Forest. Forest currently owns 19.87 per cent of Mincor and this will help his push into the nickel and the EV battery minerals industry. Shares closed 42.3 per cent higher at $1.48.
MGC Pharmaceuticals (ASX:MXC) announced that ArtemiC™, their proprietary clinically tested for COVID 19 treatment, has been listed as over-the-counter status on the National Drug Code Database of the US FDA. In response, Roby Zomer, CEO and Managing Director of MGC Pharmaceuticals, commented: “[This] provides significant access to the largest healthcare market in the world and stands as a major milestone MGC’s growth progression.” Shares closed 85.7 per cent higher at 1.3 cents.
Renegade Exploration (ASX:RNX) has announced that their drilling has hit large copper sulphide zones at their Mongoose Project in Queensland. In response, Director, Mr Robert Kirtlan, said, “Within two months of assuming control of Mongoose we have completed a maiden RC program and it has all the hallmarks of being very successful.” Shares closed 40 per cent higher at 1.4 cents.
Commodities and the dollar
Gold is trading at US$1,985.90 an ounce.
Iron ore is 4.2 per cent lower at US$126.50 a tonne.
Iron ore futures are pointing to a 1.6 per cent fall.
Light crude is trading $0.74 lower at US$66.90 a barrel.
One Australian dollar is buying 66.92 US cents.
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Magnis Energy Technologies (MNS.ASX) – MNS is planning an anode active facility in the US and recently announced a binding, yet conditional, contract for the supply of anode active with Tesla. The contract is for a minimum 17.5kt/year with an option to purchase another 17.5t/year. Conditions precedent carry a tight development timeframe, with first production scheduled for February 2025. Site selection is underway and co-locating with an OEM on a brownfields site makes sense. Long lead items have been ordered and detailed engineering and design is expected to commence soon.
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TerraCom released their operating results for the December quarter FY2023 with operating metrics being in line with our forecasts.
Unseasonal rains in both Australia and South Africa contributed to operational and logistical issues across all mines, however guidance for annual production at Blair Athol is unaffected and highlights the quality of TerraCom’s skills in operational management.
We continue to like the stable operating metrics around the company’s Australian operations and see potential for the South African operations to benefit from increased management focus given the rationalisation of operations following the closure of the Ubuntu mine.
Corporate Connects overall financials remain unchanged as does our target price of $1.35 share. We maintain our forecast for a fully franked quarterly dividend of 7.5c/share to be paid in the March and June quarters of FY2023.
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NOVONIX (ASX:NVX) – is scaling a synthetic anode materials plant in the US and piloting nickel rich cathode material in Canada. Why? China is dominant and growing – 100% of global natural anode and 68% of synthetic anode is refined in China. In short, China controls the global midstream battery chain by controlling 60% of chemical refining, 87% of anode manufacturing, 61% of cathode manufacturing and 73% of battery manufacturing. It is global battery supply and price domination at scale.
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We initiate coverage on Tamboran Resources with a 12-month target price of $1.10 – representing 520% upside from the current share price. The company provides investors with a pure exposure to the development of the world class unconventional gas resource located in the Beetaloo Sub basin in Australia’s Northern Territory. The drilling of 2 wells before the end of 2022, Amungee 2H and 3H, will provide significant visibility on the commerciality of the proposed EP 98 Pilot Development – both wells are fully funded with the company having a current cash balance of ~A$130million.
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RareX Limited is an Australian Rare Earths company that has set its sights on becoming one of the largest light rare earth elements (LREEs) producers in Australia. The company’s flagship project is the Cummins Range deposit, a carbonatite deposit with a current 18.1Mt resource at 1.15% TREO (0.5% cut-off grade) that has significant potential for expansion.
Recent exploration results have confirmed high-grade extensions at depth and along strike with an additional 30,000m drilling program commencing in the second quarter of FY2022. The companies scoping study suggests upside from phosphate and economic viability over the Life of Mine (LOM).
We initiate on RareX Ltd with a A$0.12 price target – risked at 25%
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This report looks at the results of a collaborative study Antisense undertook which looked at the largest protein expression database in Long COVID-19 patients who experienced neurologic symptoms well after the primary or acute SARS-CoV-2 infection was considered over (Groups 1 & 2, with 48 subjects Group 2 comprising a single patient from a different clinical site). The symptoms and others experienced by such patients result in a highly significant amount of illness, possibly more than all primary SARS-CoV-2 infections i.e COVID-19.
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Kazia Therapeutics (KZA) announced yesterday morning that paxalisib did not meet the threshold to move into stage 2 of the GBM AGILE clinical trial (NCT03970447). The study was an adaptive trial designed to assess the potential of new therapeutics to treat the highly aggressive brain cancer glioblastoma (GBM) in a cost-effective manner. Demonstrating efficacy in GBM is an extremely high hurdle as shown by the fact that there is only one approved drug for the disease, temozolomide, and it is only effective in 1/3 of patients.
Given the high nature of the hurdle, in our original initiating coverage report on KZA, we only gave paxalisib a small chance of returning a positive result from the overall study. That is the nature of drug development with one group estimating only 6% to 7% of new chemical entities that commence clinical trials reach launch (Dowden & Munro (2019) Nat Rev Drug Discov). The small percentage that do make it to launch, however, more than make up for the cash spent on those that don’t.
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Lake Resources (LKE. ASX) – LKE has signed two non-binding MOU’s in the space of 10 days. Ford Company (Ford) has signed an MOU for ~25,000t/year and last week Hanwa, a Japanese commodity trader signed a MOU for up to 25,000t/year. Subject to execution, this is an amazing feat as Ford and Hanwa are prepared to enter into longer-term strategic partnerships with LKE. Commercial negotiations are still ongoing but are expected, especially if Ford & Hanwa inject new equity into LKE, to further de-risk the project financing & thus ensure LKE and Kachi are fully funded.
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TNG Ltd is an ASX-listed technology owner and developer of the world-class Mount Peake near-surface vanadiferous titanomagnetite deposit. To unlock value, TNG will concentrate ore from its central Northern Territory mine for processing through its patented TIVAN® process produce three premium quality revenue streams: hi-purity vanadium pentoxide (V2O5) for steel alloys and Vanadium Redox Flow batteries, a quality titanium pigment for paints and a premium steel input with >64%Fe iron ore fines.
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Two recent gravity surveys have considerably exceeded expectations and revealed potential for extensions to the existing MRE at Lake Throssell, plus a material growth opportunity at Lake Yeo. This reinforces the potential for a multi-decade, Tier-1 SOP production hub based around Lake Throssell.
TMG is currently completing work towards the PFS due early 2023, including drilling to start in Q3 2022, evaporation trials and permitting activities. Results from these programs will support the PFS and any future resource upgrade.
Benchmark SOP prices have risen to ~US$940/t due to recent geopolitical developments. The Oct 2021 Scoping Study assumed a SOP price of US$550/t and contained a sensitivity analysis showing every 10% increase in price drives a +$144m increase in the project NPV of $364m. The c.70% increase above the Scoping Study thus implies a project NPV of ~$1.4bn.
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Despite the lower realised oil and gas price, which fell by 5.4% and 19.7% respectively in August, Calima managed to show improvement in its key business metrics.
We expect higher production in November due to the contribution by the new Thorsby wells which will be drilled in August/September which will see Calima meet its 2021 production guidance of 4,500 boe/d.
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WT Financial Group Limited (WTL) is a growing diversified financial services company, founded in 2010 and listed on the Australian Stock Exchange (ASX) in 2015. Its advice and product offerings are delivered primarily through a group of independent financial advisers operating as authorised representatives of WTL under its Wealth Today Pty Ltd (Wealth Today) and Sentry Group Pty Ltd (Sentry Group) dealer group operations. It has around 275 advisers across more than 200 financial advice practices Australia-wide. It also operates a direct-to-consumer operation under its Spring Financial Group brand.
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In May 2021, Corporate Connect analyst Marc Sinatra published a comprehensive research report on ASX-listed biotech Immutep Ltd (ASX: IMM). So impressed was he with IMM that Corporate Connect felt it imperative that a follow-up report be released placing a valuation on the company, because the market was not seeing the vast potential of eftilagimod alpha (efti).
This follow-up report has been released today. Using comparables, after adding cash back to their EV estimate and dividing by the total number of issued shares, Corporate Connect now places the fair value of an Immutep share at $A2.20.
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PayGroup (PYG) delivers multi-country BPO services and cloud SaaS HCM solutions, assisting companies to manage employees in multiple, complex jurisdictions. The company has many growth opportunities, including new clients, new jurisdictions, new products, partner expansion, and new revenue sources. PYG’s scalable business model allows operating leverage and with savings from in-housing third party technology, support margin expansion.
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OpenLearning (OLL) is a higher education technology company that operates a scalable online learning platform through a software-as-a-service (SaaS) business model and provides a global marketplace of high quality courses for learners of all levels. Its primary customers are education providers based in Australia and South-East Asia (primarily Malaysia). OLL started operations in Australia in 2012 and expanded to Malaysia in 2015, Singapore in 2018, and recently also Indonesia.
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