2 Stocks In Red Zone – LPD and FAR

  • May 08, 2019 AEST
  • Team Kalkine
2 Stocks In Red Zone – LPD and FAR

While S&P/ASX 200 closed 0.4% lower today at 6269.1 points, let's have a look at two stocks which traded in the red zone for the day. LPD and FAR are facing sell-off from the market participants and are down by 15.7% and 4.5% respectively.

Lepidico Ltd 

Lepidico Ltd (ASX: LPD) is a metals and mining company which is focused on exploration and production of lithium chemicals. It’s L-Max® technology is capable of low-cost lithium carbonate supply from alternative sources which can significantly complement the lithium market. Another technology, LOH-Max™ produces lithium hydroxide from lithium sulphate without by-produce sodium sulphate.

In the recent March 2019 quarterly update, the company reported having a zero-harm track record since data collection commenced in September 2016. A good number of lepidolite-mineralised individual pegmatites were found during the drilling at Youanmi project. The company has also been able to save considerable cost associated with the integration of LOH-Max™ into the Phase 1 Plant design. On the cash flow front, the company used net cash of A$3.1 million for operating activities, A$1,000 had been used towards investing activities, and no financing activity was reported for the quarter. The company noted A$4.9 million cash and cash equivalents at the end of the quarter.

On 7th May 2019, the company announced that it is undertaking a 1:9 pro-rata renounceable rights issue of approximately 372,908,354 shares at $0.029 for each fully paid ordinary share, to facilitate the merger of the company with Desert Lion to globally lead the development of lithium chemicals from Lepidolite. One free listed option will be attached for every two new shares issued, exercisable at $0.05 on or before the three years of the date of issue.

The market capitalisation of the company is A$127.53 million. The 52 week high and low of the stock is A$0.046 and A$0.015 respectively. The stock closed at an intraday low of A$0.032 (down by 15.8%), as of 8th May 2019. In the last one year, the stock has delivered a negative return of 7.32%w while the YTD return stands at a healthy 153.3%.

FAR Limited

FAR Limited (ASX: FAR) is an ASX listed oil and gas exploration company having high-value assets in Australia, East Africa and West Africa. The company holds a portfolio of exploration licences in Senegal, The Gambia and Guinea-Bissau all of which are in West Africa. In East Africa, it has exploration land in oil and gas province of Kenya.

In the recent March 2019 quarterly update, the company continued with front-end engineering design (FEED) activities for the SNE field development as planned. It has continued with the evaluation, data integration and interpretation studies flowing drilling of Samo-1 well in offshore. During the quarter, seismic acquisition across permit WA-458-P began and was subsequently safely and successfully completed.

On the cash flow front, the company used net cash of A$4.39 million for operating activities, A$2.54 million had been used towards investing activities, and a net outflow of A$122,000 was reported for the financing activities.

On 8th May 2019, the company released a cleansing notice stating that it had issued a total of 707,854,544 ordinary fully paid shares to institutional and sophisticated investors at a price of 5.5 cents per share on 2nd May 2019. In another announcement on the same day, it also answered to the ASX’s price and volume query. ASX was suspicious about the recent price and volume change in the company’s shares to which the company replied with satisfactory answers, stating itself to be clean.

The market capitalisation of the company is A$407.18 million. The 52 week high and low of the stock is A$0.14 and A$0.0.053 respectively. The stock touched an intraday low of A$0.061 and closed at A$0.063 (down by 4.5%), as of 8th May 2019. In the last one year, the stock has delivered a negative return of 31.25%, and the YTD return stands at a negative 1.5%.


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