The Arafura Resources Limited (ASX: ARU) share price has fallen today after news the company has pushed delivery of its Nolans Project back by 8 months.  The company also announced it won’t be initially mining cerium at the rare earth project. These adjustments to the company’s former plans come as it optimises its execution strategy.

At the time of writing, the Arafura share price is 9% lower than yesterday’s close, trading for 18 cents apiece.

Let’s take a deeper dive into the mineral exploration company’s news.

Optimising the project’s execution strategy

Today’s news from Arafura is that it’s decided to modify the execution strategy of the development of its Nolans Project. The new strategy will be a traditional detailed front-end engineering and design (FEED) model.

Nolans Project is to be a rare earth mine, mining neodymium-praseodymium. It’s located in the Northern Territory.

Arafura states the FEED model will result in a more competitive tendering process, a reduced risk for contractors and more cost certainty.

It will mean the contracts for construction and engineering will be split and, according to the company, will be more competitive as a result.

Also, its engineering contract will be carried on rates to a target cost, including performance and design warranties for the plant. The tendering of other contracts, such as the numerous on-site plants and infrastructure, will also be started.

All this will make the process 8 months longer than originally planned, due to the extended tendering process.

The company also shared its plans to defer the production of cerium at the project. Arafura said the optimisation process found cerium delivered only limited value to the project, as there will potentially be a future oversupply of the rare earth mineral. Only 5% of the project’s initial income was expected to come from cerium production.

Arafura said it was looking into federal government grants to help fund the FEED program. It has also applied for a grant through the Modern Manufacturing Initiative.

Commentary from management

Arafura managing director Gavin Lockyer said the project was “shovel-ready”, with Arafura still optimising its delivery and funding:

Arafura’s ore to oxide model is a differentiator from other companies that are only proposing to produce concentrates or intermediate products for processing elsewhere, and the feedback we’ve received from both customers and financiers indicates strong support for that approach and for the shift to the more traditional FEED model for the project.

Arafura Resources share price snapshot

The Arafura share price has performed well on the ASX lately, despite today’s setback. Currently, Arafura shares are up 40% year to date and up by 203% over the last 12 months.

The company has a market capitalisation of around $234 million, with approximately 1.1 billion shares outstanding.

More reading

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• The Elixir Energy (ASX:EXR) share price is down 10% today. Here’s why
• Here’s why the Pilbara Minerals (ASX:PLS) share price is tumbling lower
• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• Mighty Kingdom (ASX:MKL) share price falls on ASX entrance

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Zelira Therapeutics Ltd (ASX: ZLD) share price is lower during mid-afternoon trade despite announcing a positive trading update.

At the time of writing, the cannabis company’s shares are fetching for 5.9 cents, down 1.67%.

Q3 FY21 quarterly update

Investors appear unfazed by the company’s latest snapshot, sending Zelira shares slightly in the negative.

According to its release, Zelira delivered a robust performance for the quarter ending 31 March 2021.

Cash receipts including product sales and licensing payment rose to a record $225,000, reflecting a 249% increase on H1 FY21. The strong growth predominately came from the company’s United States launch of its SprinjeneCBD oral care product in December.

Zelira noted that it’s planning a suite of new products to be rolled out over the next two quarters. It is expected that this will further amplify growth in sales and create additional revenue streams.

Zelira managing director, Dr Oludare Odumosu hailed the robust result, saying:

The March quarter performance is the strongest quarterly cash receipts reported for Zelira Therapeutics since its inception and clearly demonstrates the start of the Company’s revenue ramp up.

Our long-term focus to develop a portfolio of clinically validated and scientifically formulated cannabinoid medicine and consumer products is starting to bear fruit as commercialisation ramps up. We are well placed to build on the March quarter’s momentum and accelerate our progress in 2021 as we launch new products and expand into new geographies.

Zelira appointment

Complimenting the result, Zelira highlighted its February address of being appointed to the National Cannabis Roundtable (NCR) board of directors in Washington DC, United States.

Founded in late 2010, the NCR is a trade association focusing on federal cannabis reform in the United States. The group consists of innovators, investors and employers across the entire chain of legal cannabis businesses.

NCR is seeking to decriminalise cannabis at the federal level, ensuring patients and customers have access to state-based cannabis programs.

Zelira appointed Dr Odumosu to represent the company on the NCR board.

CEO of Trulieve and second vice chair of NCR’s board of directors, Kim Rivers commented:

We are excited to have Zelira join our growing Roundtable. Their focus on research and health is ground-breaking and will help us showcase the breadth and potential of the cannabis industry as we seek to further reform and grow the legal cannabis industry in the US.

Dr. Odumosu added:

The manner that the federal government handles reform will have fundamental impacts on the people we serve. Zelira is committed to bringing break-through therapeutics to market and we need to have a regulatory framework in place that will allow research to expand and grow on a Federal/National level.

Outlook

Looking ahead, Zelira plans on growing revenues from the multiple products it has across its Australian and United States portfolio. It noted that it is currently progressing licencing discussions for its Hope and Zenivol products in the United States. In addition, negotiations are set to resume in expanding distribution to other markets, particularly Germany and the United Kingdom.

Zelira share price snapshot

Zelira shares have gained around 40% over the past year, but are down 35% since the start of 2021.

Based on the current share price, Zelira has a market capitalisation of roughly $70 million, with 1.19 billion shares outstanding.

More reading

• The Elixir Energy (ASX:EXR) share price is down 10% today. Here’s why
• Here’s why the Pilbara Minerals (ASX:PLS) share price is tumbling lower
• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• Mighty Kingdom (ASX:MKL) share price falls on ASX entrance
• What’s with the WPP AUNZ (ASX:WPP) share price today?

Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Elixir Energy Ltd (ASX: EXR) share price is plummeting today following news of the company’s latest placement and share purchase plan.

At the time of writing, the Elixir Energy share price is down 10%, with shares in the company trading for 41 cents apiece.

Let’s take a closer look at the news released by the energy company today.

Elixir Energy’s capital raising

The Elixir Energy share price fall comes after the company announced it has successfully raised $10 million from a significantly oversubscribed placement.

The company will issue more than 27.7 million new shares under the placement.

They were each priced 20% less than the previous closing price and 18% less than the 5-day volume-weighted average price, at around 36 cents apiece.

Elixir Energy will also be completing a share purchase plan. It will issue shares at 36 cents apiece to raise another $20 million.

The share purchase plan is to open on Friday and will close on 7 May 2021.

The money raised by both expeditions will go towards Elixir Energy’s “multi-faceted” appraisal program in Mongolia. 

The company aims to bring forward the project development and production by between 18 and 24 months.

Commentary from management

Elixir managing director Neil Young said the company’s efforts have allowed it to expand and accelerate its program in Mongolia. He added:

In addition to the support from existing and new sophisticated investors in the successful placement announced today, we are pleased to provide the opportunity to ensure all of our shareholders have the chance to share in our growing success by participating in a SPP.

Elixir Energy share price snapshot

Despite the drop following today’s news, the Elixir Energy share price is having a fantastic year on the ASX.

Currently, it’s up by 189% year to date and has lifted a massive 1,925% over the last 12 months.

The company has a market capitalisation of around $366 million, with approximately 814 million shares outstanding.

More reading

• The Elixir Energy (ASX:EXR) share price is charging up today. Here’s why

Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Pilbara Minerals Ltd (ASX: PLS) share price has come under pressure on Wednesday.

In afternoon trade, the lithium producer’s shares are down 4% to $1.25.

Why is the Pilbara Minerals share price under pressure?

Investors have been selling Pilbara Minerals shares today despite the release of a strong third quarter update.

According to the release, the company achieved record production of 77,820 dry metric tonnes (dmt) of spodumene concentrate during the three months ended 31 March. This is up 22% from its second quarter production of 63,712 dmt.

Positively, during the latter two months of the quarter, the company was operating with annualised production capacity of approximately 330,000 tonnes per annum of dry spodumene concentrate. This equates to quarterly production of 82,500 dmt.

Why are its shares falling then?

Taking some of the shine off the quarter, and possibly the reason for the weakness in the Pilbara Minerals share price today, was its shipping update.

During the quarter, the company achieved spodumene concentrate shipments of 71,229 dmt. This was broadly flat on the prior quarter’s shipments of 70,609 dmt.

Management advised that its final March shipment was only partially completed as a result of port delays beyond its control.

Lithium prices continue to rise

Another positive from the report was that lithium chemicals pricing continued to significantly improve during the quarter. Furthermore, this is now starting to be reflected in the price received for spodumene concentrate sales.

Management notes that at the end of March it received a letter of credit ahead of an April 2021 spot sale of spodumene concentrate. This order implies a headline price of US$655/dmt, which it feels highlights the recent strong upward trajectory in pricing.

This compares very favourably to its unit cash operating cost of US$383/dmt that was achieved during the quarter. It is also a big increase on the average selling price of approximately US$410/dmt during the third quarter.

Even better, though, is that management continues to target a unit cash operating cost of US$320-350/dmt. This is based on an AUD:USD exchange rate of 0.72 and its processing plant operating at steady-state production.

If it achieves this and prices remain strong, the company will be generating significant free cash flows. This could be a big positive for the Pilbara Minerals share price in the coming quarters.

More reading

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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ASX 200 retail shares like Super Retail Group Ltd (ASX: SUL) are worth watching this afternoon. That’s because today saw the release of the latest Australian Bureau of Statistics (ABS) retail trade data.

What’s the latest for ASX retail shares?

Today’s retail trade data contained some good news for retailers even as the S&P/ASX 200 Index (ASX: XJO) fell 1%. Market conditions strengthened slightly during March with seasonally adjusted estimate up 1.4% from February 2021 to $423.9 million.

In seasonally adjusted terms, Australian turnover climbed 2.3% in March 2021 compared to the year prior. Today’s ABS release suggested the March 2021 quarter will be relatively unchanged compared to last quarter in seasonally adjusted current price terms. In fact, the ABS is forecasting a 0.1% decline from the December 2020 quarter on that basis.

The 1.4% increase in March follows a 0.8% decline in February 2021. That was aided by both Victoria (+4%) and Western Australia (+5.5%) rebounding from coronavirus-related lockdowns.

Queensland’s figures edged lower, attributed to the 3-day Brisbane lockdown towards the end of the month, but this was offset elsewhere in the country. The strongest increases were seen in cafes, restaurants and takeaway food services, particularly across Victoria and WA.

Through-the-year sales rose 2.3% compared to March 2020 figures, following a 9.1% increase in February 2021. The ABS attributed that to March 2020 coronavirus figures which saw a surge in supermarket retail spending at the likes of Coles Group Ltd (ASX: COL) and Woolworths Group Ltd (ASX: WOW).

ASX 200 retail shares like Super Retail are worth watching this afternoon on the back of the latest figures. At the time of writing, the Super Retail share price is up 0.8% to $12.40 while JB Hi-Fi Limited (ASX: JBH) shares have pared back 0.4% of losses following the release.

Foolish takeaway

ASX 200 retail shares are moving this afternoon after the latest retail trade statistics from the ABS. Month-on-month increases from Victoria and Western Australia offset weaker numbers in Queensland to help monthly turnover climb higher.

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Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Super Retail Group Limited. The Motley Fool Australia owns shares of COLESGROUP DEF SET and Woolworths Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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Mighty Kingdom Ltd (ASX: MKL) shares jumped 10% to 33 cents per share upon listing on the ASX this morning. However, the momentum quickly reversed, sending the shares downward.

At the time of writing, the Mighty Kingdom share price is down 6.67% to 28 cents. Based on the number of quoted securities, the company holds an indicative market capitalisation of around $42.5 million.

Background

Mighty Kingdom is Australia’s largest independent game developer. The company came into existence in 2010 with a small team of creatives headed by managing director Philip Mayes. Since then, the team has expanded to 103 developers.

Over its 11-year history, Mighty Kingdom has produced and released more than 50 games. Across the portfolio, the company has racked up over 50 million downloads. Titles include the Shopkins games, LEGO Friends: Heartlake Rush, Ava’s Manor and Sugar Slam offered on Snap Inc‘s Snapchat.

The developer derives its revenue from a diversified business model. This means Mighty Kingdom makes money from a ‘work for hire’ basis, licensing third-party brands, and developing original intellectual property (IP) that is funded by third-party publishers. It does, however, have an interest in furthering its capability of self-publishing original IP.

Funds from the initial public offering (IPO) will certainly go towards these efforts, with the company tapping new investors for $18 million prior to listing.

Why is the Mighty Kingdom share price falling?

Despite the gaming sector offering huge growth prospects, investors are today selling off Mighty Kingdom shares. A snippet of information might have investors wary of the company on its ASX debut. It has a long history of losses and isn’t promising that will change.

Based on the company’s filings, revenue for the last three years has jostled between $2.14 million and $2.6 million. As you might have guessed, 103 employees don’t come cheap and are the company’s biggest expense. As such, Mighty Kingdom has been loss-making. In FY20, total comprehensive losses amounted to $3.59 million.

These numbers might have investors second-guessing whether the Mighty Kingdom share price stacks up.

More reading

• Here’s why the Pilbara Minerals (ASX:PLS) share price is tumbling lower
• Why ASX 200 retail shares like Super Retail (ASX:SUL) are worth watching
• What’s with the WPP AUNZ (ASX:WPP) share price today?
• Can 5G boost the Telstra (ASX:TLS) share price?
• Why Challenger, Nuix, Splitit, & Temple & Webster are sinking

Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The WPP Aunz Ltd (ASX: WPP) share price is unmoving today after the company’s shareholders voted in favour of a scheme that will see WPP buy back all of the shares it doesn’t own.

At the time of writing, the WPP Aunz share price is back where it started at the market open, trading at 65.2 cents per share.

Wpp Aunz Ltd is a marketing agency in Australia that markets itself as “Australia’s leading creative transformation company”.

It operates in four reportable segments: Global Integrated Agencies, Large Format Production, Public Relations & Public Affairs, and Specialist Communications. The majority of the revenue is generated from the Global Integrated Agencies segment.

WPP’s share buyback scheme

The majority of WPP AUNZ’s minority shareholders voted in favour of the proposed scheme, under which WPP via Cavendish Square Holding BV (an indirect wholly-owned subsidiary of WPP) will acquire all of the company’s shares that it does not already own.

The company said 96.45% of votes cast by its minority shareholders at the scheme meeting (either in person or by proxy) voted in favour of the scheme.

Share buybacks are a fairly low-risk method of a company profiting from its continued growth, assuming continued investment in research and development is impractical as often is the case with marketing agencies. 

WPP management pleased with the result

WPP AUNZ chair Robert Mactier said it was an important step for WPP’s continued progression.

Minority shareholders have overwhelmingly voted in favour of the transaction which was negotiated on their behalf by the Independent Board Committee. 

The significant transaction premium, compared to recent trading levels, was based on an improved outlook for the business which was delivered as a result of the significant work from [CEO] Jens Monsees and the management team in executing on the group’s transformation strategy.

That the business was in a position to both weather the COVID-19 crisis, and emerge as a stronger business, is a credit to Jens and his team. WPP AUNZ will continue to be a strong force in the Asia Pacific region under full ownership by WPP plc.

WPP share price snapshot

The WPP share price rose strongly in December last year and has stabilised since then. It originally surged from 37 to 69 cents per share in the month from November and has remained within 7 cents of that figure since. 

More reading

• WPP Aunz (ASX:WPP) reports quarterly sales drop but reaffirms guidance

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Telstra Corporation Ltd (ASX: TLS) share price is not having a great day today. A the time of writing, Telstra shares are down 1.47% to $3.34 a share. That’s a disappointing pullback for investors seeing as it was only last week that Telstra was hitting new 8-month highs of $3.48 a share and got mighty close to its 52-week high of $3.54.

Even so, this is an ASX blue chip that climbed more than 30% between 30 October and 12 February. One of the reasons investors could be relatively bullish on the Telstra share price is its 5G rollout.

5G is the next generation technology for mobile internet. It promises to revolutionize connectivity in the same way the shift to 4G technology did years ago by allowing dramatically higher download speed, as well as reduced latency. The problem is that investment in 5G infrastructure is a Herculean task.

Analysis from Ausbil Investment Management recently stated that a 5G network requires “up to 10 times more towers, base stations and macro-cells to provide ‘blanket’ wireless coverage for users to the same reach as 4G”. That means that the telco which is able to put together a 5G network most effectively stands to benefit from this barrier to entry. And, as Ausbil predicts, “an extra leg of growth as the new 5G networks are deployed”.

There is evidence to suggest Telstra is winning the 5G race here in Australia.

Telstra leads 5G race

According to Telstra’s investor day presentation last year, the company estimates it is the “clear market leader… with the best 5G network in the country”. Telstra’s 5G network already covers more than 50% of Australia’s population, and the company tells us that it will hit 75% by June, just 2 months away.

The telco has also stated that, as of February 2021, it has roughly 1 million active 5G devices on its network. It also stated that 5G is already having a positive impact on its mobiles segment. Here is some of what Telstra said on that matter back in its earnings presentation in February:

We continued to see strong customer growth in mobiles. We added 80,000 net retail postpaid mobile services… This is in fact the strongest branded performance in several halves, and it reinforces the benefits of our clear leadership in 5G.

So from all of this, we can reasonably conclude that Telstra’s investment in a 5G network is already paying dividends (pardon the pun). As with all emerging technologies, the full spectrum of benefits that 5G will bring is not entirely clear yet. What we do know is that Telstra seems to be the best-placed telco to harvest those benefits if and when they do appear.

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Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The S&P/ASX 200 Index(ASX: XJO) is on course to record a disappointing decline. In afternoon trade, the benchmark index is down 1% to 6,948.3 points.

Four ASX shares that have fallen more than most today are listed below. Here’s why they are tumbling lower:

Challenger Ltd (ASX: CGF)

The Challenger share price is under pressure again and down 7% to $5.18. Investors have been selling the annuities company’s shares since the release of its third quarter update. While Challenger delivered solid asset growth, its margins have come under pressure due to a sharp decline in credit spreads over the year that were not fully reflected in customer pricing. This means the company is only guiding to the low end of its profit guidance range for FY 2021.

Nuix Ltd (ASX: NXL)

The Nuix share price has crashed almost 17% to $4.22. This morning the investigative analytics and intelligence software provider downgraded its FY 2021 guidance just six weeks since reaffirming it. Nuix advised that during April, a significant and larger than expected number of customers elected to transition from module-based subscription licenses to consumption and Software-as-a-Service (SaaS) license models. This has resulted in a shift in both revenue and Annualised Contract Value (ACV) profiles.

Splitit Ltd (ASX: SPT)

The Splitit share price has fallen 6.5% to 79 cents following the release of a disappointing first quarter update. According to the release, For the three months ended 31 March, Splitit achieved Merchant Sales Volume (MSV) of US$82 million. While this was an increase of 247% compared to the same period last year, it was down 5% quarter on quarter from US$86.3 million.

Temple & Webster Group Ltd (ASX: TPW)

The Temple & Webster share price has sunk 8.5% to $10.00. This decline appears to be a delayed reaction to the online furniture and homewares retailer’s third quarter update on Tuesday. Although Temple & Webster is still performing strongly, it warned that it would be focusing on revenue growth and not its earnings for the foreseeable future. It is doing this in order to capture market share.

More reading

• Top brokers name 3 ASX shares to buy today
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• Got money to invest? Here are 2 ASX shares to buy
• ASX 200 drops, Challenger plummets, Lynas falls

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Temple & Webster Group Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited. The Motley Fool Australia has recommended Nuix Pty Ltd and Temple & Webster Group Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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The Lynas Rare Earths Ltd (ASX: LYC) share price continues to slide after what initially looked like a good quarterly result on Tuesday.

The Lynas share price has fallen almost 14% this week, today reaching a 2-month low of $5.41 at the time of writing, down 7.6%. 

Didn’t the quarterly result read well?

Lynas’ quarterly results read well at face value. 

Its rare earth oxide and NdPr (Neodymium and Praseodymium) had largely improved to 4,463 tonnes and 1,359 tonnes compared to the respective  3,410 tonnes and 1,367 tonnes produced in the second quarter of FY21 (2Q21).  

Rare earth prices also continued to march higher in the quarter to A$35.5/kg compared to A$29.5/kg last quarter and A$19.8/kg a year ago. 

The company observed that the “rare earths market appears to be recovering well, with both magnet and catalyst sectors experiencing robust demand during the quarter”.

As part of Lynas’ 2025 growth plan, its new Kalgoorlie rare earth progressing facility project continues to push forward with the approval for the start of limited preliminary construction. The company was pleased to hear Prime Minister Scott Morrison publicly state that this project is a “…gold standard example of the cooperation on critical supply chains between Australia and the US.”

Higher production, higher prices, a recovering industry and government recognition. So what exactly is going wrong? 

What’s driving the Lynas share price lower? 

Upon closer inspection, the update shed light on subdued sales due to the impact of the COVID-19 pandemic on trade, and recent shipment delays due to the Suez Canal blockage. 

The company also observed that several Chinese rare earth producers are planning to increase production. Among them, the leading global rare earths supplier Northern Rare Earth, which plans to double production within 3 years. 

Northern Rare Earth accounts for some 60% of China’s total rare earth production. The doubling of its output could very well weigh on prices in the medium to long term. 

The market appears to have swept aside the company’s quarterly achievements and focused more on looming supply woes. Despite today’s fall, the Lynas share price is still up 29% year-to-date. 

More reading

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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