Greatland Gold Plc

Greatland Gold Plc (GGP) is a mining company focusing mainly on the exploration of gold in Western Australia and Tasmania. The company had divided its operations based on geographies in which it operates, which include Australia and the UK. The company has been working on 5 minerals projects, which include Warrentinna project, Firetower project, Bromus project, Ernest Giles project and Havieron project.

Recent News
On 15^th July 2019, Monday, Greatland Gold Plc announced the identification of exploration targets at East of Paterson Range after an aeromagnetic survey conducted over the licenced land. The Paterson Range East is wholly owned by Greatland and is near Company's Havieron prospect and covers an area of 224 square kilometres. The aeromagnetic data indicates a number of targets with Havieron like a magnetic signature. The company will commence surface geochemistry and ground gravity by August.

Financial Highlights – H1 Financial Year 2019 (£)

 (Source: Interim Report, Company Website)

For the first half of the financial year 2019, the companyis in the development stage didn’t generate any revenue and is depended on its cash balances for its operating expenses. The Operating Loss stood at £1,460,758 for H1 FY2019 versus a loss of £718,096 in H1 FY2018. In the H1 of the FY2019, the company’s pre-tax loss and Loss for the period stood at £1,458,171 versus a loss of £716,988 in H1 FY2018.The company’s basic loss per share stood at 0.05 pence in H1 FY2019 versus a loss per share of 0.03 pence in H1 FY2018. The company’s cash and cash equivalents stood at £3,969,359 for H1 FY2019 versus £4,499,411 in H1 FY2018.

Share Price Performance

Daily Chart as at July-16-19, before the market close (Source: Thomson Reuters)

On July 16, 2019, at the time of writing (before the market close, at 1:46 PM GMT), Greatland GoldPlc shares were trading at GBX 1.865, down by 2.35 per cent against the previous day closing price. Stock's 52 weeks High and Low are GBX 2.55/GBX 0.975. Stock’s average traded volume for 5 days was 37,397,087.80; 30 days – 22,889,629.63and 90 days – 25,805,416.28.The average traded volume for 5 days was up by 63.38 per cent as compared to 30 days average traded volume. The company’s stock beta was 2.10, reflecting high volatility as compared to the benchmark index. The outstanding market capitalisation was around £63.78 million.

Conclusion
The company for the first half of the financial year 2019has not generated any revenue and its profitability are in the negative zone. A mixed movement in the commodity prices may negatively impact the economic viability and profitability of the company’s projects. The gold prices in the international market had improved, but other commodity prices had weakened.The company operates in a challenging environment which requires continuous investment, sometimes at the cost of profitability, to stay ahead of competitors.

Keeping in mind the weak financial performance, we recommend the investors to “Avoid” taking fresh positions at the closing price of GBX 1.91 (as on 15^th July 2019).
 

ECR Minerals Plc

ECR Minerals PLC (ECR) is an AIM-listed mineral exploration and development company, which has full ownership of five gold exploration projects in Australia, along with other projects in the Philippines and Argentina. The exploration for gold in Australia is its current focus, and the company has an aim to deliver the next multi-million-ounce gold resource in the country. Craig Brown is the Chief Executive Officer of the group. The company’s segments are Danglay Gold Project, SLM Gold Project, Central Victorian Gold Projects and Iceberg Gold Project.

Recent News
On 15th July 2019, Monday, ECR Minerals plc provided an update over Timor Gold Project’s exploration activities in the state of Victoria in the Australian region. The company had started a rock chip sampling programme in the licence area. Total of 91 samples was collected and was submitted for assay testing in the laboratory.

Financial Highlights – H1 Financial Year 2019 (£)

 (Source: Interim Report, Company Website)

For the first half of the financial year 2019, the company is in the development stage and not generated any revenue and is dependent on its cash balances for its operating expenses. The Operating loss stood at £262,957 for H1 FY2019 versus a loss of £243,226 in H1 FY2018. In the H1 of the FY2019, the company’s pre-tax loss and Loss for the period stood at £282,562 versus a loss of £247,945 in H1 FY2018.The company’s basic loss per share stood at 0.07 pence in H1 FY2019 versus a loss per share of 0.10 pence in H1 FY2018. The company’s cash and cash equivalents stood at £622,457 for H1 FY2019 versus £701,499 in H1 FY2018.

Share Price Performance

Daily Chart as at July-16-19, before the market close (Source: Thomson Reuters)

On July 16, 2019, at the time of writing (before the market close, at 2:52 PM GMT), ECR Minerals Plcshares were trading at GBX 0.90, down by 10 per cent against the previous day closing price. Stock's 52 weeks High and Low are GBX 1.35/GBX 0.602. Stock’s average traded volume for 5 days was 2,781,035.60; 30 days – 3,799,511.67and 90 days – 5,831,279.56.The average traded volume for 5 days was down by 26.81 per cent as compared to 30 days average traded volume. The company’s stock beta was 0.37, reflecting lower volatility as compared to the benchmark index. The outstanding market capitalisation was around £4.48 million.

Conclusion
The company is in the exploration stage and has not reported any revenue until now, with no certainty that the exploration projects could be economically exploited. The profitability of the company had been in the negative zone for the period. As a result, investors will need to be cautious before taking a position in this company. Moreover, there is also a risk that its growth ambitions would outpace cash requirement for managing working capital and fund new projects, and it would fail to secure adequate cash flow.

Keeping in mind the risk associated and weak financial performance, we recommend the investors to “Avoid” taking fresh positions at the closing price of GBX 1 (as on 15^th July 2019).

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