Two stocks under discussion- AUQ, EGL

Alara Resources Limited

The Balcatta, Australia-based Alara Resources Limited (ASX: AUQ) is a mineral exploration company with a portfolio of projects in the Middle East region. It has a market cap of AUD 12.58 million and ~629.02 million outstanding shares. At the end of the trading session on March 15th, 2019, the AUQ stock price skyrocketed 40% to AUD 0.028 by AUD 0.008 with ~ 10.28 million shares traded.

Meanwhile, on the same day, Alara Resources announced to have entered into an ~ AUD 96-million investment agreement with SAMA Global Investment, headquartered in Doha, Qatar. According to the deal, SAMA will invest AUD 96 million into Al Hadeetha Resources LLC for the development of the Washihi-Mazzaza Copper Project (repayable by Al Hadeetha) and charge an establishment fee of ~ AUD1.6 million to be paid over a six-year-term beginning after 24 months of grace period.

Recently, the company also posted its financial results for the half-year ended December 31st, 2018, whereby the total comprehensive loss for the year amounted to $ 250.5k, and the company’s net assets stood at ~ $ 21.64 million. During the period, the operating activities led to cash outflows of $ 688.4k. On the contrary, there were large cash inflows of $ 10.56 million from investing activities primarily due to proceeds for disposal of subsidiaries. The net cash and cash equivalents stood at $ 13.23 million at the end of the half-year.

Also, Alara Resources recently appointment McNally Bharat Engineering Company Limited for project engineering, geotechnical drilling as well as detailed designing of plant and other site infrastructure for the Washihi-Mazzaza Copper Project.

Environmental Group Limited

The Environmental Group Limited (ASX: EGL) is an industrial sector company which operates through four business segments comprising Total Air Pollution Control (TAPC), Baltec IES, EGL Water and Tomlinson Energy Service.  It is based out of Notting Hill, Australia.  To date, EGL has a market cap of AUD 10.88 million. On March 15th, the EGL stock price closed the trading session at AUD 0.055, rising by 10%, indicating an intra-day gain of AUD 0.005 with ~ 1.62 million shares traded.

On March 15th, the Group’s wholly owned subsidiary TPAC secured a $ 12.9 million design and supply contract of the Gas Scrubbing Plant for a project in Western Australia affirming its expertise in developing technologies to reduce dust, odours and harmful gasses from the environment. The project is expected for delivery to the site by Q3 2020.

In the same month, the EGL Board finalised a five-year market rate loan of $ 2 million with the Commonwealth Bank of Australia (CBA) at lower rates compared to the Group’s overdraft facility. The principal repayments will begin in June 2020 after the interest is paid for the first 12 months.

The Group also released its half-yearly financial results for the period ended December 31st, 2018, posting revenue from ordinary activities at $ 10.898 million and loss attributable to the equity holders of EGL at ~$ 231k, both down 40.9% and 129.7% respectively on the prior corresponding period ended December 31st, 2017. The net cash at the end of the period stood at $ 789.6k.

On February 5th, 2019, Environmental Group Limited also completed the final acquisition of RCR Tomlinson Limited’s Energy division, through a cash payment of $ 3 million.


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