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Reach Resources Limited (AU:RR1)
:RR1
Australian Market

Reach Resources Limited (RR1) AI Stock Analysis

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AU

Reach Resources Limited

(Sydney:RR1)

Rating:70Outperform
Price Target:
Reach Resources Limited demonstrates strong financial performance with high profitability and a robust balance sheet. However, cash flow challenges and technical analysis indicators hint at potential short-term price weakness. Despite these issues, the low P/E ratio suggests the stock may be undervalued, presenting a potential investment opportunity if cash flow issues are resolved.

Reach Resources Limited (RR1) vs. iShares MSCI Australia ETF (EWA)

Reach Resources Limited Business Overview & Revenue Model

Company DescriptionReach Resources Limited engages in the exploration and evaluation of mineral resource projects in Australia. The company primarily explores for gold, as well as for nickel, cobalt, copper, and base metals. It holds interests in the Primrose gold project located in the northeast of Perth. The company was formerly known as Cervantes Corporation Limited. Reach Resources Limited was incorporated in 2001 and is headquartered in Perth, Australia.
How the Company Makes MoneyReach Resources Limited makes money through the exploration and development of mineral resources, with the primary revenue streams coming from the sale of mineral products extracted from their projects. The company undertakes exploration activities to identify viable mineral deposits, which are then developed into operational mines. Revenue is generated from the sale of minerals extracted from these sites. Additionally, Reach Resources Limited may engage in partnerships or joint ventures with other mining companies to leverage expertise and share costs, potentially enhancing revenue through shared profits or royalties. The company's financial performance is influenced by factors such as mineral prices, exploration success, and the efficiency of mining operations.

Reach Resources Limited Financial Statement Overview

Summary
Reach Resources Limited exhibits strong profitability with impressive revenue growth and high profit margins. The balance sheet is robust with no debt, promoting financial stability. However, negative free cash flow indicates cash management challenges that need to be addressed to ensure sustainable growth.
Income Statement
85
Very Positive
The company has shown impressive growth in revenue, with a significant increase from past years, leading to a strong gross profit margin of 99.51% for TTM. The net profit margin is also robust at 62.28%, reflecting effective cost management. EBIT and EBITDA margins are high, indicating operational efficiency. The revenue growth trajectory is positive, indicating strong market performance and potential for future growth.
Balance Sheet
78
Positive
The balance sheet is strong with zero debt, leading to a favorable debt-to-equity ratio of 0. Return on Equity (ROE) is high at 13.91%, reflecting effective use of equity to generate profits. The equity ratio of 98.90% signifies a solid capital structure with low liabilities, enhancing financial stability. However, the reliance on equity might limit financial flexibility.
Cash Flow
62
Positive
The cash flow position presents challenges, with negative free cash flow indicating cash outflows exceeding cash inflows from operations. The operating cash flow to net income ratio is negative, suggesting cash flow issues despite reported net income. The free cash flow to net income ratio is also negative, highlighting the need for improved cash management strategies to support sustainable growth.
BreakdownTTMJun 2024Jun 2023Jun 2022Jun 2021Jun 2020
Income Statement
Total Revenue3.20M3.20M6.59K100.00K29.65K0.00
Gross Profit3.18M3.20M1.57K100.00K29.65K0.00
EBITDA3.12M1.92M-944.00K-546.00K-323.00K100.04K
Net Income1.99M1.94M-2.66M-451.00K-343.00K82.83K
Balance Sheet
Total Assets14.48M15.02M6.55M6.08M3.95M2.15M
Cash, Cash Equivalents and Short-Term Investments4.43M6.01M1.23M1.13M2.04M468.46K
Total Debt0.000.000.00450.00K450.00K1.01M
Total Liabilities158.52K338.86K524.55K555.45K489.65K1.37M
Stockholders Equity14.32M14.69M6.03M5.53M3.46M783.61K
Cash Flow
Free Cash Flow-3.18M-4.77M-1.61M-1.34M-934.79K-403.93K
Operating Cash Flow-981.46K-950.79K-867.37K-489.48K-728.89K-228.30K
Investing Cash Flow1.93M-617.16K-881.34K-2.62M154.43K256.81K
Financing Cash Flow3.22M6.35M1.84M2.21M2.46M2.80K

Reach Resources Limited Peers Comparison

Overall Rating
UnderperformOutperform
Sector (43)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
AURR1
70
Outperform
AU$7.00M3.1316.50%
43
Neutral
AU$1.41B-6.14-40.62%3.98%-4.78%-42.91%
DEAVI
€4.48M-25.45%
€4.45M-24.05%
AUFAU
AU$8.31M-41.11%
AUKTA
43
Neutral
AU$9.07M-103.26%-100.00%44.94%
AUGLA
36
Underperform
AU$6.82M-39.64%46.88%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
AU:RR1
Reach Resources Limited
0.01
-0.01
-50.00%
DE:AVI
Viking Mines Limited
0.01
0.00
0.00%
DE:CXB0
Asra Minerals Limited
0.01
0.00
0.00%
AU:FAU
First AU Ltd.
AU:KTA
Krakatoa Resources Ltd.
0.01
0.00
0.00%
AU:GLA
Gladiator Resources Limited
0.01
-0.01
-50.00%

Reach Resources Limited Corporate Events

Reach Resources Confirms Optimized Gold Resource at Blue Heaven
Apr 23, 2025

Reach Resources Limited has confirmed an optimized Mineral Resource Estimate (MRE) for its Blue Heaven deposit at Murchison South, revealing a potential for shallow, open pit mining operations. The MRE, conducted by Mining Plus, indicates a resource of 61,300 ounces of gold, with 92% occurring in high-grade fresh rock. The current spot gold price of approximately A$5,000/oz presents a significant upside compared to the A$3,500/oz used in the MRE. With over 65% of the MRE classified as indicated and mineralization starting from the surface, the company is well-positioned to capitalize on the strong gold market. Additionally, metallurgical tests show a 97% recovery rate, and processing discussions are ongoing, suggesting potential positive implications for stakeholders.

Reach Resources to Host Investor Webinar on Murchison South Gold Project
Apr 13, 2025

Reach Resources Limited has announced an investor webinar scheduled for April 15, 2025, where CEO Jeremy Bower will present the latest results from the Murchison South Gold Project. This event aims to engage shareholders and investors, potentially impacting the company’s market positioning by providing insights into its operational progress and future prospects.

Reach Resources Confirms 61K Oz Gold Resource at Blue Heaven
Apr 9, 2025

Reach Resources Limited has announced the completion of a Mineral Resource Estimate (MRE) for the Blue Heaven deposit at Murchison South, confirmed by independent consultants Mining Plus. The deposit, with a resource of 681,000 tonnes at 2.8 grams per tonne for 61,300 ounces of gold, shows potential for shallow, open-pit mining. With a strong gold market and a spot price significantly higher than the pit shell price used in the MRE, the company sees considerable upside potential. The majority of the resource is classified as indicated, with mineralization starting from the surface and remaining open along strike and at depth. The company is also conducting metallurgical test work, achieving a 97% recovery rate, and is in discussions for processing partnerships.

Reach Resources Initiates Trading Halt for Key Announcement
Apr 7, 2025

Reach Resources Limited has requested a trading halt on its securities pending an announcement about a mineral resource estimate for its Murchison South Gold Project. This trading halt is expected to end by the start of normal trading on April 9, 2025, or upon the release of the relevant announcement. The halt allows the company to manage the dissemination of significant information that could impact its market operations and stakeholder interests.

Reach Resources Limited Issues 20 Million Unquoted Equity Securities
Apr 2, 2025

Reach Resources Limited announced the issuance of 20 million unquoted equity securities, with two new classes exercisable at $0.02 and $0.03, both expiring on April 1, 2028. This strategic move aims to bolster the company’s financial position and enhance its capability to pursue growth opportunities in the resource sector, potentially impacting its market positioning and stakeholder interests.

Reach Resources Limited Releases Interim Financial Report for 2024
Mar 9, 2025

Reach Resources Limited has released its interim financial report for the half-year ending December 31, 2024. The report includes comprehensive financial statements and declarations, providing insights into the company’s financial position and performance. This release is crucial for stakeholders as it offers a detailed overview of the company’s financial health and operational outcomes during the period.

Reach Resources Confirms Gold Mineralization at Murchison South
Mar 2, 2025

Reach Resources Limited announced successful results from their recent RC drilling program at the Murchison South gold project, with all 14 holes intersecting gold mineralization. These results validate previous drilling efforts and will be used by Mining Plus to optimize pit designs in high-grade areas, potentially enhancing the project’s economic viability and strengthening the company’s position in the gold mining sector.

Reach Resources Addresses ASX Queries on Murchison South Gold Project Assay Results
Feb 25, 2025

Reach Resources Limited has addressed queries from ASX regarding the initial assay results from its Murchison South Gold Project. The company confirmed that the results from the first two drill holes could materially affect the price or value of its securities. However, due to the project’s nature and the need for comprehensive data from all 14 drill holes, the company delayed the announcement to avoid misleading investors. The company asserts compliance with ASX Listing Rules, emphasizing the importance of context in reporting isolated assay results.

Reach Resources Limited Issues Unquoted Equity Options
Feb 25, 2025

Reach Resources Limited announced the issuance of unquoted equity securities, specifically options expiring on November 30, 2027, with exercise prices of $0.03 and $0.02. This issuance involves a total of 15,000,000 options, which are part of an employee incentive scheme and are not intended to be quoted on the ASX. This move could potentially enhance employee engagement and align their interests with the company’s long-term goals.

Reach Resources Sees Surge in Trading Amid Ongoing Drilling Activities
Feb 19, 2025

Reach Resources Limited has experienced a significant increase in both the price and trading volume of its securities, attributed to ongoing drilling activities at its Murchison South Gold Project. The company has completed an RC drilling program and plans to release initial results after a trading halt, which could impact market perceptions and investor interest.

Reach Resources Reports Promising Gold Assay Results at Murchison South Project
Feb 19, 2025

Reach Resources Limited has announced promising assay results from the first two drill holes at its Murchison South gold project. These results show high-grade gold mineralization, aligning with historical data and suggesting the presence of significant gold resources. The drill program, which includes 14 holes, is expected to provide more insights once the remaining assays are received, potentially enhancing the company’s resource model and validating historical drilling efforts.

Reach Resources Initiates Trading Halt Ahead of Key Announcement
Feb 17, 2025

Reach Resources Limited has requested a trading halt on its securities, effective immediately, pending the release of an announcement. The halt is intended to address an ASX price query and to disclose assay results from the company’s Murchison South Gold Project. This move could impact the company’s stock performance and inform stakeholders of potential developments in their gold exploration activities.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Apr 08, 2025