Barry FitzGerald
Finally, quarterly reporting season is dusted.
For the most part, it’s a pretty dull couple of weeks if you’re the type that watches ASX announcements. And not even the voracious Garimpeiro has enough stamina to wade through some 600 reports from junior explorers, looking for inspiration.
Fortunately, the research desk at Bell Potter has, and Fitz is forever grateful for the kind of application that has seen BP single out six juniors that mentioned impressive Maiden Resource Estimates in their quarterlies.
Reporting an MRE means a company has enough information to allow it to declare it’s actually got an asset. It does not mean that asset will be profitable, makes the company a takeover target, or even that a mine will be developed.
But you have to start somewhere. Here are those that caught BP – and Garimpeiro’s – eye.
Green Technology Metals (ASX:GT1): Trading mid-week at 65c. Bell Potter (BP) valuation, $1.38.
“A busy March quarter for the lithium explorer, with a maiden resource of 4.5Mt grading 1.01% lithium at its Root project in Ontario. It is the start of the story at Root.”
Delta Lithium (ASX:DLI): Trading mid-week at 55.5c. BP valuation, 85c.
“Five drill rigs are working on upgrading the mineral resource estimate at the Mt Ida project, and that the early stage Yinnetharra project was generating some impressive results.”
Dreadnought (ASX:DRE): Trading mid-week at 5.4c. BP valuation, 19c.
“Has been kicking goals on the rare earths front in the Gascoyne region at its Mangaroon project.”
Rumble (ASX:RTR): Trading mid-week at 21c. BP valuation, 60c.
“Maiden MRE estimate for its Earaheedy zinc/lead project … came in at 94Mt at 3.1% combined zinc/lead.” Garimpeiro reckons it’s “on its way to becoming a world-scale discovery.”
Deep Yellow (ASX:DYL): Trading mid-week at 63c. BP valuation, $1.05.
“A long-term play on the uranium market with its attractive portfolio of advanced assets.”
Santana (ASX:SMI): Trading at 63c mid-week. BP valuation, $1.45.
“A 2.9Moz resource across four deposits at its Bendigo-Ophir gold project in New Zealand. BP said to watch out for an updated resource estimate in the December half.”
John Athanasiou
CEO, Red Leaf Securities
The tech sector is bouncing back, strongly. So far this year it has outpaced the ASX 200 benchmark by a factor of 3 to 1, second only to gold stocks in terms of performance since the start of 2023.
The tailwind? Maybe a little bit of hopium in the form of the cash rate to hold or potentially decrease as inflation gets under control.
“Essentially when the cost of finance decreases it means the costs of holding assets which don’t pay a dividend – like many tech companies – decreases,” Athanasiou says.
So far, most of the action has been at the higer end of the ASX tech market. But history shows it eventually trickles down – and these are the small cap tech players Red Leaf reckons are ready to run.
Kalina Power (ASX:KPO): Market cap $19.7m, SP 0.013c. This carbon capture clean tech is a top pick for Athanasiou. Focused on the North American market and with more than $1 billion worth of projects in the pipeline, it’s just engaged Price Waterhouse Coopers (PwC) as a strategic advisor.
PwC will help KDP find funding for its project development business plan and growing portfolio of projects.
Athanasiou said PwC will only be paid a success fee. “Given the market cap is only ($19.7) million and PwC have been told go to find $25 million of investment we see plenty of upside with Kalina,” he said.
Bluebet Holdings (ASX:BBT): Market cap $50m, SP 0.25c. BBT was founded by veteran bookmaker Michael Sullivan in 2015 and listed on the ASX in July 2021. Yep, this is a gambling stock.
Athanasiou said the Aussie side of the business recently became cashflow positive while their US operations are growing. They operate in Colarado and Ohio, and looking to grow into other US states fairly soon, including Louisiana and Indiana.
“They have a market cap of ($50) million and $27 million in cash,” he said.
Jaxsta (ASX:JXT): Market cap $18m, SP 0.049c. One for the true music fan, Jaxsta owns the world’s largest dedicated database of official music credits. In February, it announced plans to acquire Vampr, the world’s largest music creator networking platform/app.
The acquisition provides JXT access to 1.3 million creators to drive subscriptions and is expected to finalise on June 1, 2023.
They also recently launched vinyl.com, a simple to use marketplace for buying, well, vinyl. (We told you it was for the true fans.)
“We like to to call Jaxta a company with microcap valuation and a billion dollar board,” Athanasiou said.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.