- GUL, ODA, FEL and CRS have delivered over 30% return to their shareholders in the past one month, as of 15 June 2020.
- CIO, in which GUL owns 36.7% of shares, has achieved outstanding drill results from the South Darlot Gold Project.
- Orcoda, a logistics solution provider, has entered a long-term contract, providing the Company with $2-3 million annually.
- FEL has secured an attractive valuation with the sale of a non-core asset, aiding its upcoming exploration programs and enabling further value accretive opportunities.
Investment in small-cap stocks comes with high risk as compared to large-cap or mid-cap stocks. However, investment in this space also provides opportunity of making quick addition to investors’ wealth, as these businesses hold the potential to register strong price increases.
In this backdrop, let us discuss four ASX-listed small-cap players - GUL, ODA, FEL and CRS, which have delivered more than 30% in returns to their shareholders in the last one month, as of 15th June 2020.
Gullewa Limited (ASX: GUL)
Gullewa Limited (ASX: GUL) is engaged in exploration and mining activities, in addition to investments in equities and property space.
Outstanding drill results at South Darlot Gold Project - The Company recently updated the market with an announcement made by Central Iron Ore Limited (CIO), in which GUL owns 36.7% of shares. The CIO announcement highlighted outstanding drill results from the South Darlot Gold Project in Western Australia, a joint venture with Red5 Limited.
CIO received results from a 20-hole drill program, including 17 reverse circulation and 3 diamond core holes at the Endeavour Prospect at the project. The results included a suite of narrow vein, high gold grades of a maximum of 124.4 g/t.
Stock Performance - On 15th June 2020, the stock of GUL last traded at $0.105 per share, inching downward by 16% from its previous close. The stock has delivered returns of 92.31% and 257.14% during the past one month and three months to shareholders, respectively.
Orcoda Limited (ASX: ODA)
Logistics solution provider, Orcoda Limited (ASX: ODA) is an operational efficiency specialist, aiding its clients with best-in-class solutions combining management expertise, software, and contracting services.
Long-Term Contract - The Company recently announced that a long-term nine-year contract has been signed by its wholly owned subsidiary, Resource Connect Logistics with the Mt Buller & Mt Stirling Resort Management Board. The contract covers Guest Transit Services and Rideshare services to resort customers during the annual ski seasons.
ODA expects to generate revenue from the contract of around $2 million – $3 million per annum or approximately $20 million - $30 million, provided the contract runs for the complete nine-year period. The contract includes a five-year term plus two additional two-year options.
COVID-19 Measures - During the March 2020 quarter, the Company decreased its overheads to reach cash burn of around $100k per month going forward. ODA also rolled out cost-saving measures due to COVID-19, wherein, Managing Director, Chairman and a non-executive director agreed to a 50% reduction in their incomes for a period of 6 months while another non-executive director kindly taking his income to zero.
Stock Performance - On 15th June 2020, the stock of ODA traded downward by 3.448% to $0.140 per share. In the last one month and six months, the stock delivered a return of 31.82% and -34.09%, respectively.
FE Limited (ASX: FEL)
FE Limited (ASX: FEL) is involved in the exploration and development of minerals, with rights or interests in various projects and tenements in Australia, holding potential for gold and base metals, copper, iron ore, and battery metals.
Sale of Royalty to TRR Services Australia Pty Ltd - Recently, the Company’s JV partner Macarthur Minerals Limited announced to have closed the sale of its Evanston royalty interest to TRR Services Australia Pty Ltd, a wholly owned subsidiary of Trident Resources PLC. The royalty interest sale concerned a portion of the wider iron ore mine of Koolyanobbing, which is located in WA’s Southern Yilgarn region.
FEL has received the first instalment of $3.5 million while the second instalment amounting to $3 million is likely to be received in 12 months.
The Company is now working towards plans for performing an FLEM survey at the Hillside copper and gold project in the Pilbara region, with the focus on a section of gossan line (previously identified) as well as a series of individual Fixed Loop Electromagnetic Survey (FLEM) surveys over high priority SkyTEM electromagnetic targets (previously identified).
Stock Information - On 15th June 2020, the stock of FEL closed the day’s trade at $0.014 per share, downward by 12.5% from its previous closing price. The last one-month return of the stock was noted at 33.33%
Caprice Resources Ltd (ASX: CRS)
Caprice Resources Ltd (ASX: CRS) is into mining and mineral exploration. The Company recently announced that Scott Patrizi made a change to holdings (indirect) in CRS by acquiring 8,000 fully paid ordinary shares at a consideration of $920.00 on 21st May 2020.
March quarter update - As per its quarterly update for March 2020, the Company is conducting a thorough desktop review of all future planned activities to be completed at the Wild Horse Hill Project.
At the end of March 2020 quarter, net cash outflow due to operating activities stood at $90,000. The Board of Directors have agreed to the accrual of their fees for the time being in order to assist CRS in maintaining its cash reserves during the period of COVID-19. CRS also noted that the restrictions regarding travel during the COVID-19 pandemic would impact on its ability to undertake field activities at the Wild Horse Hill and Northampton Projects over the June quarter.
Stock Performance - On 15th June 2020, the stock of CRS settled at $0.175 per share with a decline of 2.778% against its previous closing price. The stock of CRS has delivered returns of 50% and 71.43% during the period of one month and three months to shareholders, respectively.
There is no investor left unperturbed with the ongoing trade conflicts between US-China and the devastating bushfire in Australia.
Are you wondering if the year 2020 might not have taken the right start? Dividend stocks could be the answer to that question.
As interest rates in Australia are already at record low levels, find out which dividend stocks are viewed as the most attractive investment opportunity in the current scenario in our report.