Reach Resources Limited (RR1) AI Stock Analysis

• Market Cap: AU$7.00M
• Dividend Yield: N/A
• Average Volume (3M): 4.33M
• Price to Earnings (P/E): 3.1
• Beta (1Y): 0.57
• Revenue Growth: N/A
• EPS Growth: N/A
• Country: AU
• Employees: N/A
• Sector: Basic Materials
• Sector Strength: 71
• Industry: Gold
• EPS (TTM): <0.01
• Shares Outstanding: 874,431,340
• 10 Day Avg. Volume: 1,326,784
• 30 Day Avg. Volume: 4,328,337
• PEG Ratio: -3.88
• Price to Book (P/B): 14.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -16.33
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 70 Outperform
• 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 Business Overview & Revenue Model

Company Description

Reach 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 Money

Reach 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

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

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

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.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	3.20M	3.20M	6.59K	100.00K	29.65K	0.00
Gross Profit	3.18M	3.20M	1.57K	100.00K	29.65K	0.00
EBITDA	3.12M	1.92M	-944.00K	-546.00K	-323.00K	100.04K
Net Income	1.99M	1.94M	-2.66M	-451.00K	-343.00K	82.83K
Balance Sheet
Total Assets	14.48M	15.02M	6.55M	6.08M	3.95M	2.15M
Cash, Cash Equivalents and Short-Term Investments	4.43M	6.01M	1.23M	1.13M	2.04M	468.46K
Total Debt	0.00	0.00	0.00	450.00K	450.00K	1.01M
Total Liabilities	158.52K	338.86K	524.55K	555.45K	489.65K	1.37M
Stockholders Equity	14.32M	14.69M	6.03M	5.53M	3.46M	783.61K
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 Flow	1.93M	-617.16K	-881.34K	-2.62M	154.43K	256.81K
Financing Cash Flow	3.22M	6.35M	1.84M	2.21M	2.46M	2.80K

Reach Resources Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RR1	70 Outperform	AU$7.00M	3.13	16.50%	―	―	―
Sector *	43 Neutral	AU$1.41B	-6.14	-40.62%	3.98%	-4.78%	-42.91%
AVI		€4.48M	―	-25.45%	―	―	―
CXB0		€4.45M	―	-24.05%	―	―	―
FAU		AU$8.31M	―	-41.11%	―	―	―
KTA	43 Neutral	AU$9.07M	―	-103.26%	―	-100.00%	44.94%
GLA	36 Underperform	AU$6.82M	―	-39.64%	―	―	46.88%

Reach Resources Limited Corporate Events

Reach Resources Confirms Optimized Gold Resource at Blue Heaven

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

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

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

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

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

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

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

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

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

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

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

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.