VSA Morning Miner, 31/03/21

Tectonic Gold (AQSE:TTAU)

Tectonic Gold (AQSR:TTAU) has reported interim results to December 2020, however, the company is in a substantially stronger position than at the time of filing the accounts. The loss in the period was £60k showing £192k in cash following the raise of £400k in September 2020. However, attached to the raise were warrants exercisable on the back of drilling. Exercising these 0.7p warrants has so far raised more than £500k to support drilling in the coming months with further exercises expected.

This drilling will focus on the Southern copper discovery and extending the known 800m strike length as well as testing deeper targets. The company is still analysing samples from the initial drill campaign with 500 currently being assayed. TTAU hit mineralisation with every hole reported to date in the phase one campaign, which indicates the presence of a stacked vein system near surface, and is reportedly gaining interest from contiguous license holders Rio Tinto as well as Newcrest.

Although TTAU is now fully focused on its Queensland gold portfolio its legacy investments in Kazera Global haver performed strongly with recent announcements from the diamond operation in South Africa reporting in excess of 200cts production since December which will likely be sufficient to generate operating profits.

Having strengthened its cash position and planning its 2021 campaign TTAU is well placed to progress exploration and generate potential catalysts to drive a rerating. We also note that Brett Boynton, CEO, has bought further shares in the market.

We reiterate our Speculative Buy recommendation.


Oliver O’Donnell, CFA, Head of Research & Natural Resources Analyst | T: +44 (0)20 3617 5180 | E: [email protected]
Paul Renken, Senior Geologist | T: +44 (0)20 3005 5011 | E: [email protected]

VSA Capital Research | T: +44 (0)20 3005 5000 | E: [email protected]

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