Lode Resources Ltd engages in exploring gold, silver, and copper deposits. It holds 100% interests in seven exploration licenses located in the New England Fold Belt in northern New South Wales. The company was incorporated in 2019 and is based in Sydney, Australia.

Australia

Lode Resources Ltd

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. 

LDR.AX reported revenue of AUD 0mn in the last 12 months, down 0% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS fell 0% from FY23 to AUD 0.00.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Over the past six months the stock has exceeded the performance of this peer group by 4ppts and its growth decelerated by 3ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is mildly favourable.

Another important profitability metric, return on assets (RoA), amounted to -7.7% in the last 12 months, an increase from -14.2% in FY24. 

In the last 12 months, the return on capital employed (RoCE) grew to -7.9%, below the peers. 

Lode Resources Ltd reported a return on equity (RoE) of -8.1% in the last 12 months, up from -14.5% in FY24. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.5 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.

LDR.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 very unstable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. 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, bleak profitability, negligible return on capital, poor working capital management, and inadequate interest coverage. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, LDR.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, LDR.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. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. 

Lode Resources Ltd

A$ 0.12

2

Lode Resources Ltd

A$ 0.12

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

A$ 0.12

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