TOP 5 EMERGING ASX STOCKS FOR FY23

1. IONEER LIMITED (ASX: INR)

TEAM VEYE | 18 Sep 2019 ASX | INR

Ioneer Limited’s (ASX: INR) 100%-owned Rhyolite Ridge Lithium-Boron Project in Nevada, USA provides a substantial foundation for Ioneer to become a responsible and profitable producer of the materials necessary for a sustainable future. The Rhyolite Ridge PFS demonstrated the Project’s scale, long life and potential to become the lowest-cost lithium producer in the world as well as the largest lithium producer in the United States. With forecast annual production of 20,200 tonnes of lithium carbonate and 173,000 tonnes of boric acid, Rhyolite Ridge will be a globally significant producer of both lithium and boron. Lithium and boron are both used in a diverse range of everyday items and innovative technologies that are essential to modern life and emerging clean technologies such as electric vehicles.

(Graphic Source Company Reports)
From the Company Reports
Emerging lithium-boron supplier, ioneer Ltd (ioneer or the Company) (ASX: INR) on 29 July 2019 provided an update on the development of its 100%-owned Rhyolite Ridge Lithium-Boron Project (Rhyolite Ridge or the Project) in Nevada, USA, for the quarter ending 30 June 2019.

Highlights

  • 27% increase in Rhyolite Ridge Mineral Resource to 154 million tonnes (mt), containing 1.3mt lithium carbonate and 12.4mt boric acid 
  • Kemetco is operating the pilot plant which has produced first high-purity boric acid from Rhyolite Ridge lithium-boron ore
  • Bench-scale testwork by Veolia has produced battery-grade lithium hydroxide from Rhyolite Ridge ore 
  • Sulphuric Acid Plant contract awarded to SNC-Lavalin and DuPont, delivering a US$60m capital expenditure saving for the Rhyolite Ridge Project
  • Fluor on-track to complete Definitive Feasibility Study (DFS) in late Q3 2019
  • Rhyolite Ridge remains uniquely positioned to become a major, low-cost supplier of lithium and boron products to major markets in the USA and Asia
  • ioneer and its financial advisor are in active negotiations with multiple strategic and offtake partners regarding development funding for Rhyolite Ridge.

(Graphic Source Company Reports)
Providing the materials for a sustainable & thriving planet:
  • Lithium and boron products integral to many emerging green technologies.
  • USA location close to major markets and provides strong ESG framework.
  • Long -life, scalable project to provide strong profits with small environmental footprint.

Ioneer is set to deliver a major lithium-boron mine in the USA100%-owned Rhyolite Ridge:

  • +30 year mine life, capable of producing at site:
  • +20,000 tonnes p.a. lithium carbonate.
  • +170,000 tonnes p.a. boric acid.
  • Uniquely positioned to be a major supplier of both products.
  • Forecast to be bottom of the lithium cost curve due to revenue from boron co-product.

Multi-generational source of lithium and boron

  • Strategically located in a tier one mining jurisdiction – Nevada.
  • Definitive Feasibility Study to be completed in late Q3 2019.
  • Production targeted for late 2021.
  • Lithium-boron Measured & Indicated Resource increased 27% to 130M tonnes.
  • Excellent potential to increase production scale and mine life.

 

Unique deposit as lithium and boron can be extracted using proven commercial processes to produce lithium and boron end-products on site.
(Chart Source: TradingView)

Financials

The company’s EPS stands at 0.001cents and EBITDA Margin at 21%. The P/E ratio is 237.5. The stock has a market cap of $280.25million and a share volume of 1.47billion. The stock has a 52-week range of $0.12 $0.31. (Data Source Company Reports).

2. LAKE RESOURCES NL (ASX: LKE)

TEAM VEYE | 02 Aug 2021 ASX | LKE

Lake Resources NL (ASX: LKE OTC: LLKKF) is an exploration and development company focused on developing its three lithium brine projects and one hard rock lithium project in the Lithium Triangle in Argentina. Lake holds a lithium lease which covers 180,000 hectares, which is 100% owned. The Company’s project includes Olaroz – Cauchari and Paso Lithium Brine Projects, Kachi Lithium Brine Project and Catamarca Lithium Pegmatite Project. In Olaroz – Cauchari and Paso Lithium Brine Projects Lake holds mining leases over 45,000 hectares in two areas in Jujuy Province, in North West Argentina. The Kachi Project is a consolidated package of 54,000 hectares of mining leases owned 100% by Lake. The Kachi Lithium Brine Project is located in Catamarca province. Catamarca Lithium Pegmatite Project holds 72,000 hectors of potential lithium bearing pegmatites in Ancasti, Catamarca Province..

From the Company Reports

Clean lithium developer Lake Resources NL (ASX: LKE; OTC: LLKKF), on 28 July 2021 released its Quarterly Report for the quarter ended 30 June 2021.

(Graphic Source – Company Reports)

Highlights

  • Strong interest for low-cost project debt finance of Lake’s flagship Kachi Lithium Project indicated by over half a dozen major international banks for approximately 70% of the total funding required, subject to support from Export Credit Agencies (ECA’s).
  • Expansion case to double production to 50,000 tpa LCE initiated due to increasing global demand for battery-quality lithium.
  • Drilling is underway at Kachi Project to support the expansion of future production and upgrade Kachi’s Total Resource from M&I Resources to Reserves for DFS.
  • Definitive Feasibility Study (DFS) continues for Kachi with Hatch as lead consultant, with completion anticipated in Q1 2022.
  • Lake well-funded through to final investment decision (FID) on construction finance, anticipated in mid-2022. Cash of A$26 million (US$19.2m) as of end June.
  • Discussions expanded with a wider group of potential off-takers and electric vehicle makers due to the high quality of Kachi products and low CO2 footprint, low water use and low land use.
  • ioneer and its financial advisor are in active negotiations with multiple strategic and offtake partners regarding development funding for Rhyolite Ridge.

(Graphic Source – Company Reports)
  • Investor interest grows due to the strong financials of the Kachi Pre-Feasibility Study, with US$1.6 billion NPV8 (post tax), 35% IRR and US$260 million annual EBITDA.
  • Market data continues to indicate a growing lithium supply shortfall from early 2022.
Lake Resources NL, on 28 July 2021 announced that in recognition of the support received from its shareholders, it intended to undertake a bonus issue of options (Bonus Options) to all shareholders with an address in Australia or New Zealand (Eligible Shareholders) at 5:00 pm (Sydney time) on the Record Date (set out in the indicative timetable set out below).

Issue of Bonus Options to Shareholders

· Bonus Options will be issued for nil consideration to Eligible Shareholders at a ratio of one (1) free Bonus Option for every ten (10) shares held at 5:00 pm (Sydney time) on the Record Date (indicatively 10 August 2021).

· Bonus Options will have an exercise price $0.35 each, expiring on 15 October 2021 and, if exercised, will result in the issue of a second option (Additional Options) and each Additional Option will have an exercise price $0.75 each, expiring on 15 June 2022 and Lake intends to seek approval to list and trade the Additional Options on the ASX

Kachi Drilling Underway to Support Doubling Lithium Production

Lake Resources NL on 7 July 2021 announced that it was increasing drill testing at its flagship Kachi Lithium Project to support a doubling of future planned production.

 

(Graphic Source – Company Reports)
  • Drilling underway at flagship Kachi Lithium Brine Project to support the expansion of future production.
  • Four well, 1,600m drill program advancing amid a resurgence in Argentinian lithium investment.
  • The program aims to upgrade Kachi’s 4.4 Mt LCE Total Resource from M&I Resources to Reserves for Kachi’s Definitive Feasibility Study (DFS) and for production expansion study.
  • Less than 20% of the current total resource is utilised for planned 25,500 tpa lithium carbonate production over 25 years.
(Chart Source: Trading View)Technical Chart- Monthly Candlestick Price Chart Pattern
(Chart Source: Trading View)Technical Chart- Weekly Candlestick Price Chart Pattern
(Chart Source: Trading View) Technical Chart- Daily Candlestick Price Chart Pattern

3. RED 5 Limited

TEAM VEYE | 17 Jun 2020 ASX | RED

RED 5 Limited (ASX: RED) is an Australia-based mineral resource company. The Company’s operations are located in Western Australia’s Eastern Goldfields Region. Its operations include Darlot Gold Mine, King of the Hills, Siana Gold Mine and Mapawa Gold Project. The Darlot Gold Mine is located approximately 900 kilometers (km) north-east of Perth in the Eastern Goldfields region of Western Australia. The Hills Gold Mine is located 80km south of the Darlot Gold Mine and 28km north of the town of Leonora in the Eastern Goldfields region of Western Australia. It holds an interest in the Siana Gold Project and the Mapawa Gold Project, both located in the mining region of Surigao del Norte Province on the island of Mindanao. The Company also owns the Cables and Mission gold deposits, located approximately 10km north of its Darlot Gold Mine in Western Australia.

From the Company Reports

Red 5 exercises option to complete the acquisition of the Cables and Mission gold deposits.

The acquisition further advances Red 5’s strategy to increase Resources and extend mine life at the Darlot Gold Mining Operation.

Red 5 Limited (ASX: RED) on 22 May 2020 advised that it had exercised its option to complete the acquisition of the Cables and Mission gold deposits, located approximately 10km north of its Darlot Gold Mine in Western Australia. 

(Graphic Source Company Reports)

· The Cables and Mission deposits, located 10km from Red 5’s Darlot gold mining and processing operation, host a JORC 2004 Inferred Resource of 185koz which was last reported by Leopard Resources NL on 5 February 2014. 

· Total acquisition cost is $2.0M, with a $500k deferred payment on delineation and reporting of a 500koz JORC 2012 Resource. 

· Confirmatory Reverse Circulation drilling by Red 5 has confirmed the mineralisation with best intercepts of: 

· 7m @ 5.7g/t Au (20MIRC0001) 

· 4m @ 14.7g/t Au (20MIRC0002) 

· 5m @ 3.7g/t Au (20CBRC0003) 

· Gold mineralisation in the Cables and Mission deposits is hosted within similar dolerite units to those that host the Centenary orebody at the Darlot mining operations. 

· The acquisition advances Red 5’s strategy of expanding its Mineral Resource base for the Darlot gold processing plant as part of its Darlot Mining Hub Strategy, with key elements including: 

· Extension of existing Resources, including identification of mineable remnants; 

· Step-out underground exploration using HiSeis 3D seismic data; 

· Exploration for open pit deposits within Red 5’s existing tenements, including the Ockerburry Hill tenements; and 

· Regional ‘bolt-on’ acquisitions.

 
King of the Hills

Final Feasibility Study Progress Update

Final Feasibility Study work program progressing to plan. Maiden JORC 2012 Mineral Resource estimates finalised for the Cerebus-Eclipse and Centauri satellite deposits (total KOTH satellite deposit open pit Mineral Resources increased to 308koz), with mining and engineering studies in progress.

(Graphic Source Company Reports)

Red 5 Limited on 13 May 2020 provided an update on the ongoing Final Feasibility Study (FFS) for an integrated bulk open pit and underground mine and processing operation at the King of the Hills (KOTH) gold project in Western Australia, which remains on-track for completion in the September 2020 Quarter

· Final Feasibility Study (“FFS”) for the proposed stand-alone integrated bulk open pit and underground mining and processing operation at the King of the Hills (“KOTH”) Gold Project in Western Australia is on schedule for completion in the September 2020 Quarter. 

· GR Engineering Services (“GRES”) is progressing the design of the Process Plant and other on-site infrastructure (expected completion June 2020) and obtaining third-party vendor equipment pricing. 

· Expressions of Interest received for the provision of KOTH energy requirements on a “Build Own Operate” basis have confirmed pricing similar to the Pre-Feasibility Study (PFS) estimates. 

· Mine planning studies continue (managed by SRK and Entech) with the final KOTH open pit and underground mine designs and mine schedules expected to be completed in June 2020. 

· The Cerebus-Eclipse and Centauri satellite deposits, located to the north-west of the KOTH Gold Project, are being assessed for initial open pit mine developments to deliver oxide ore to the proposed Processing Plant in the early stages of a bulk mining operation. 

· Non-binding indicative proposals received from open pit mining contractors align with PFS costings. 

· Drilling and assaying of numerous low-grade stockpiles completed. The FFS team is assessing the potential inclusion of existing stockpiles in future KOTH Mineral Resource models and mine plans. 

· Early works design and procurement activities have commenced including bulk earthworks design, sourcing of transportable buildings for the accommodation village and office space and procurement plans for long-lead items.


Additional Resources defined for satellite open pit deposits at King of the Hills

Maiden JORC Mineral Resource estimates for the Cerebus-Eclipse and Centauri deposits further extend the pipeline of potential early mill feed sources for the proposed integrated bulk open pit and underground mining and processing operation at King of the Hills (KOTH).

(Chart source: TradingView)

Red 5 Limited on 6 May 2020 advised the completion of maiden JORC 2012 Mineral Resource estimates for the Cerebus-Eclipse and Centauri near-mine deposits at the King of the Hills (KOTH) gold mine in Western Australia

· Maiden JORC 2012 open pit Mineral Resource estimates completed for the Cerebus-Eclipse and Centauri deposits, located to the north-west of current mining operations at Red 5’s KOTH gold mine in Western Australia: 

· Cerebus-Eclipse: Indicated and Inferred Resource of 2.8Mt @ 1.2g/t Au for 112,000oz 

· Centauri: Indicated and Inferred Resource of 1.7Mt @ 1.5g/t Au for 81,300oz 

· Together with the previously announced Mineral Resource estimates for the Rainbow and Severn deposits (see ASX announcement 1 May 2019), this increases the total Satellite Open Pit Mineral Resource base at KOTH to 308,200 ounces. 

· These satellite deposits represent an important component of Red 5’s proposed mining strategy for the KOTH Project, providing potential complementary mill feed and cash flow during the early stages of the proposed stand-alone 4Mtpa processing operation. 

· Final Feasibility Study for an integrated bulk open pit and underground mining and processing operation at KOTH is on-track for completion in the September 2020 Quarter

 

4. Lycopodium Limited

TEAM VEYE | 01 Mar 2022 ASX | LYL

Lycopodium Limited (ASX: LYL) is an Australia-based company, which is engaged in engineering and project delivery services in the resources, infrastructure and industrial processes sectors. The Company operates through three segments: Minerals, Process Industries and Project Services Africa. The Minerals segment offers of engineering and related services to the mining industry. The Process Industries segment consists of engineering and related services provided to the manufacturing and renewable energy facilities across Australia and South East Asia. The Project Services Africa segment consists of project management, construction management and commissioning services provided to the extractive mining industry in Africa.

Financials:

LYCOPODIUM LTD (ASX: LYL)

 
(Source: Refinitiv, Thomson Reuters)

From the Company Reports

Lycopodium Limited (ASX: LYL) (‘Lycopodium” or the “Company”) on 23 February 2022 announced its Half-Year Results FY2022. The Company has generated revenue of $102.4 million and net profit after tax (NPAT) of $15.3 million for the six-months ended 31 December 2021 (1H FY2022).

During 2021 the Company was awarded a number of significant Engineering, Procurement and Construction Management (EPCM) contracts, which have now commenced onsite works. This includes the Motheo Copper Project in Botswana (Sandfire); Bomboré Gold Project in Burkina Faso (Orezone); Ahafo North Gold Project in Ghana (Newmont); Talison Lithium MSA Project in Western Australia (Talison); Navachab Gold Mine Expansion in Namibia (QKR); and the design, supply and project delivery for the Séguéla Gold Project in Côte d’Ivoire (Fortuna Silver Mines).

1H FY2022 Highlights

Operational

· Achieved first ore at Rio Tinto’s Western Turner Syncline Phase 2 Project in the Pilbara in October.

· Commenced onsite works across a number of EPCM projects – Motheo (Botswana), Bomboré (Burkina Faso), Ahafo North (Ghana), Talison MSA (Western Australia), Navachab (Namibia), Séguéla (Côte d’Ivoire).

· Commissioning and handover of Talison’s Tailings Retreatment Project at Greenbushes.

· Significant new domestic projects won – Talison CGP3 and Tianqi LHP2, both in Western Australia.

· Award of Lepidico’s Phase 1 Integrated Project (Namibia and UAE) and, most recently, Batu Hijau (Indonesia).

· In Industrial Processes, capitalised on the move to domestic manufacturing, providing design consultancy services to Commonwealth Serum Laboratories (CSL).

Award of Engineering and Construction Management Services Contract for Batu Hijau Plant Expansion Project

Lycopodium on 10 January 2022 announced that it had been awarded an Engineering and Construction Management Services contract from PT Amman Mineral Nusa Tenggara (PT AMNT) for the Batu Hijau Process Plant Expansion Project in Indonesia.

Batu Hijau is an open-pit copper-gold mine located on the island of Sumbawa in the province of West Nusa Tenggara, about 1,500 kilometres east of Jakarta.

 Value Proposition:

· P/E vs Index: LYL is at a good valuation based on its P/E at 9.19x compared to Sector P/E at 55.06x and Index P/E at 42.06x.

· P/B vs Index: LYL is at a good valuation based on its P/B at 2.22x compared to Sector P/B at 4.38x and Index P/B at 4.82x.

· P/S vs Sector vs Index: LYL is at a good valuation based on its P/S at 1.35x compared to Sector P/S at 1.47x and Index P/S at 4.82x.

· Dividend Yield vs Index: LYL is at a good valuation based on its Dividend Yield of 8.81% compared to Sector at 6.66% and Index Dividend Yield at 5.71%. (Source: Refinitiv, Thomson Reuters)


Relative Valuation:

 
(Source: Refinitiv, Thomson Reuters)

LYL with its trailing twelve month key metric P/E at 9.19x below Industry median at 10.55x, EV/EBITDA at 2.88x compared to Industry median at 5.27x and Dividend yield of 8.8% well above Industry dividend yield of 3.81% positions it at a good value proposition.

 Earnings projected to grow at a CAGR of 10.8% between FY22-FY26

*Forecasted Twelve Months or NTM (Next Twelve Months): of any financial metrics measure such as EV/Sales, EV/ EBITDA, or P/B, PCF, P/E is the calculation forecasted for the immediate next twelve months from the current date based on projections applied to the revenues, EBITDA etc.

*TTM or Trailing Twelve Months refers to a company’s past 12 consecutive months of performance data from the current date used in financial reporting.

Peer Analysis: 

(Source: Refinitiv, Thomson Reuters)

LYL with P/E at 9.19x and D/E at 21% and Dividend Yield at 8.8% is well placed among its peer group.

Financial Metrics: 

(Source: Refinitiv, Thomson Reuters)

· Improved Margins: LYL witnessed strong margins (year on year) with Net margins growth of 3.14% (year on year) to 8.67% well above Industry margin of 2.58%.

· Improved ROE: ROE increased by 2.15 % (year on year) to 17% (June 2021).

· Debt Equity: Debt to equity at 21.04% is well below Industry D/E of 65.92%.

Outlook

In spite of the disruptions and uncertainties of FY2021, LYL continued to win work with existing and new clients across its core operating sectors of Resources, Infrastructure and Industrial Processes. This saw revenue remain steady, consistent with the guidance provided at 1H FY2021. With minimal debt, the Company’s strong Balance Sheet provides capacity for investment.

Industry overview

Value-driven process, engineering and project delivery organisations are the backbone across most major commodities, including iron ore, gold, copper, nickel, lithium, graphite, diamonds, platinum and mineral sands. Such projects spread across the globe, predominantly in Africa, Australia, Southeast Asia and North and Central America. The studies pipeline has remained strong and continues to deliver subsequent FEED, EP, EPCM and EPC scope opportunities.

 Market Risk Analysis

· Operating under the challenges presented by the global pandemic, with varying degrees of restrictions across operational jurisdictions

· Impact on operations

· Shortage of experienced manpower

· Supply chain disruptions

 

Technical Analysis:

(Chart source: TradingView) Technical Chart- Monthly, Weekly and Daily Candlestick Price Chart Pattern

 

The stock has retraced almost 61.8% of the fall it made from its high at $6.41 in January 2020. The stock is trading above the Ichimoku cloud and above the middle band of the Bollinger. It has breached the resistance at $5.38, indicating bulls getting stronger over sellers.

On a weekly price chart, the “Higher Highs” with RSI (Relative Strength Index) pointing up with 200 day EMA (Exponential Moving Average) as a major support, signals bullish trend.

On a daily price chart, the stock price trading above the EMAs (Exponential Moving Average) with MACD (Moving Average Convergence and Divergence) in a positive territory and trading above the Ichimoku cloud signals bullish potential in the stock.

With price pattern in all t/f pointing upside and forming “Higher Highs” signals bullishness in the stock.

 

5. PepinNini Minerals Limited (ASX: PNN)

TEAM VEYE | 04 Apr 2022 ASX | PNN

PepinNini Minerals Limited (ASX: PNN) is an Australia-based exploration company. The Company is focused on developing and discovering mineral deposits. Its Salta Project holds approximately 10 mining licenses approximately 19,851 hectares (ha) in the western part of Salta Province, NW Argentina. Salta Lithium Project includes lithium brine project and Santa Ines copper gold Project. The lithium brine project consists of approximately 6 mining leases covering approximately 13,713 ha. Santa Ines copper gold project consists of approximately 4 mining leases covering approximately 6,138 ha. Its Musgrave Province Nickel-Copper-Cobalt Project is located in far north west South Australia in the Anangu Pitjantjatjara Yankunytjatjara lands. The project holds approximately two granted tenements and 8 exploration license applications comprising approximately 14,003 square kilometers through NiCul Minerals Ltd (NCL). Its other projects include Eyre Peninsular Kaolin Project and Rio Tinto Joint Venture.

 

(Chart source: TradingView) Technical Chart-Daily Candlestick Price Chart Pattern

Diversified minerals company PepinNini Minerals Limited (ASX: PNN) (PepinNini or the Company) on 31 March 2022 reported a further increase in lithium grade from its brine blending program at the Salta Lithium-Brine Project, in Salta province in north-west Argentina.

Highlights:

·    The highest lithium (Li) concentrate to date – 5.3% – delivered from evaporation tests of blended brine from the Incahuasi and Rincon salares at the Salta Lithium Project.

·    Very high-grades also returned from individual brines from the Rincon and Incahuasi salares which supplied the brines for the blending program:

o    Brine from the Rincon salar also achieved a lithium concentrate >5% Li.

o    Brine from the Incahuasi salar returned a concentrate of 3% Li – result restricted due to a lack of brine for continued evaporation.

·   Evaporation testing of blended brines now complete – provided conclusive evidence that brines evaporate to a high concentration of lithium with low contaminants.

·   Final results due in April and will help determine development options for the Project – given the positive progressive results, plans are well advanced.

 

Outlook:

The brine blending program is in its final stages of completion with the evaporation testing now complete. The program has continued to deliver exceptionally high-grade lithium concentrate results, which have progressively increased as the blended brines have evaporated over the duration of the program. The Salta Project is located in the Salta province in north-west Argentina and is part of the Lithium Triangle, the World’s leading lithium brine region.

 Disclaimer

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