What’s Driving European Cobalt’s Share Price Today?

European Cobalt

The share price of European Cobalt (ASX: EUC) has been trending upwards on October 19, 2018. The stock price witnessed robust upward momentum after the news related to the high-grade cobalt as well as nickel were spread among the market participants. From shallow underground drilling at the Dobsina project which is being carried out in Slovakia, the company had returned high-grade cobalt as well as nickel. The share price of European Cobalt has been struggling a lot in 2018 as the stock has delivered the return of -42.68% in the previous six months. However, during the same period, the shares of the company’s peers have also witnessed the unfavorable momentum.

The shallow portable drilling at Joremeny Adit has managed to return high grades which were limited to 4.9% cobalt as well as 5.04% nickel. However, low-grade cobalt accounts for below 1% as well as a high grade is more than 2%. The company incurred losses amounting to $4.1 million in FY 2018 from continuing operations post the benefit of the taxes which have been availed. However, it represents a decline on the YoY basis. In FY 2017, the losses amounted to $19.8 million. This fall in the losses was witnessed mainly on the back of a rise in the revenues as well as fall in some of the line items of the expenses. Coming to the balance sheet parameters, the company witnessed a rise in the total value of the current assets in FY 2018 on the YoY basis. 

In FY 2018, total current assets were $18.4 million while in FY 2017 these assets were $2.9 million. This increase was mainly aided by a rise in all the items of the current assets like cash, trade and other receivables, term deposits as well as other assets. The company saw a rise in the total non-current assets from $0.048 Mn on FY 2017 to $0.089 Mn in FY 2018 thanks to the plant and equipment.

Between FY 2017 and FY 2018, the company witnessed a rise in the cash flow which has been used in the operations from $1.1 million to $3.5 million. These outflows have increased YoY primarily because of the expenses related to the exploration as well as evaluation. The company witnessed the substantial rise in the cash has been used in the investments from $0.1 million in FY 2017 to $15 million in FY 2018 mainly because of payments made towards term deposit as well as plant and equipment. However, in FY 2018, there was no net inflow in regard to the acquisition of entities while in FY 2017 net inflow was $3,363.

As we write, the stock of European Cobalt Limited is trading at A$0.051 per share which implies the rise of A$0.004 or 8.511% intraday. The company is presently having a market capitalization of $35.8 million. However, even after witnessing the substantial rise today, the stock price is still trading towards the lower level.

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