IRIS Metals Limited explores for and evaluates mining tenements in Australia. It holds an interest in the Kookynie project comprising 20 prospecting licenses, 2 exploration licenses, and 1 mining license with a total area of approximately 35.5 square kilometers located in the north of Kalgoorlie; and Leonora project comprising 41 prospecting licenses that covers a total area of approximately 71 square kilometers located in the northeast of the Leonora townsite. The company was incorporated in 2020 and is based in Melbourne, Australia.

Australia

IRIS Metals Limited

Basic Materials

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). It has underperformed this peer group by 63ppts over six months and grown 28ppts slower in the past month. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 44ppts over six months and grew 25ppts slower in the past month. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

Another important profitability metric, return on assets (RoA), amounted to -5.9% in the last 12 months, an increase from -68.9% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to -6.1%, below the peers. 

IRIS Metals Limited reported a return on equity (RoE) of -6.1% in the last 12 months, up from -73.1% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -12.9 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

IR1.AX has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, negligible return on capital, and inadequate interest coverage. We note strong debt servicing capacity and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, IR1.AX is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, IR1.AX is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. 

IRIS Metals Limited

A$ 0.13

3

IRIS Metals Limited

A$ 0.13

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 0.13

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