Tag: Motley Fool Australia

Investing $1,000 every other month may not seem like it has the potential to change your life, but you’d be wrong.

The Australian share market has provided investors with an average total return of 9.2% per annum over the last 30 years.

This means that if you had invested $1,000 every other month and earned the market return, you would have grown your wealth to just under $930,000 today.

This is good for two reasons. Imagine you started investing these funds when you were 20. Now you would be 50 years old and have a share portfolio worth almost one million dollars.

If you were to now rotate your portfolio into high yield income shares that collectively offer a yield of 5%, you would generate $46,500 of income each year from these investments. That could arguably be enough for some people to quit the day job and start living a life of leisure if they have paid off their mortgage already.

Overall, I believe this demonstrates why investing on a regular basis and with a long term view can be a very rewarding endeavour and something you’ll be very thankful for in the future.

With that in mind, here are three shares that I think would be great options for a $1,000 investment today:

a2 Milk Company Ltd (ASX: A2M)

I think a2 Milk Company could be a great option for that first $1,000 investment. Although the company has been growing at a very strong rate over the last few years, I’m confident it still has a long runway for growth. Especially given the increasing demand for its infant formula products. In addition to this, I believe a2 Milk Company could accelerate its growth with new product launches and acquisitions in the near future.

Altium Limited (ASX: ALU)

This award-winning printed circuit board (PCB) design software provider could be another ASX share to buy. It has also been growing at a rapid rate over the last few years. This has been driven by the proliferation of electronic devices globally which has led to increasing demand for its software. Pleasingly, with the Internet of Things boom still accelerating, I think the future looks very bright for Altium.

IDP Education Ltd (ASX: IEL)

A final option to consider investing $1,000 into is IDP Education. It is a leading provider of international student placement services and English language testing services. Although its near term growth will inevitably be impacted by the pandemic, I expect it to rebound strongly once the crisis passes. Outside this, I believe its long term outlook is very positive due to its sizeable opportunity, strong market position, and growing software business.

More reading

• Why these ASX shares could help you beat the market
• 3 ASX shares to buy and hold for the next decade
• Is the Altium share price the steal of the century?
• Leading brokers name 3 ASX 200 shares to buy right now
• Why Appen, Healius, IDP Education, & Propel shares are racing higher

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 Altium and Idp Education Pty Ltd. The Motley Fool Australia owns shares of A2 Milk. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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It’s hard to know whether to buy or sell ASX 200 shares right now. The S&P/ASX 200 Index (ASX: XJO) has been volatile in recent days as investors worry about the recent bull run.

But despite the share market heating up, now is not the time to panic.

Here are a few things that I think are worth considering if you’re nervous about buying right now.

3 reasons to buy ASX 200 shares right now

The first thing to remember is why you’re investing in the first place. While it could be to make a quick buck, it’s most likely to build long-term wealth and enjoy a nice retirement.

That means that stepping out of the market while ASX 200 shares are volatile may not be the best strategy.

For instance, many investors missed out on huge winners like Afterpay Ltd (ASX: APT) because they cashed out of the market.

There are many Aussie companies that have shed billions in value this year. That could present some great buying opportunities right now.

The coronavirus pandemic hit global markets hard and ASX 200 shares like Woodside Petroleum Limited (ASX: WPL) have crashed lower in 2020.

That leads me to my second point: market timing.

In the long-run, it’s just not possible to time the market correctly. It’s easy to say that but not follow through, especially in a bear market. However, if you’re investing for the long-term, you should drown out the noise.

Consistently investing in ASX 200 shares is the best way to achieve long-term returns. That means you can invest for your time horizon in the decades ahead and not worry about current movements.

Transaction costs and taxes are two factors that can deplete your after-tax returns which investors often forget.

A final reason to invest in ASX 200 shares right now is that there aren’t many other good options available.

Interest rates are at record lows which means savings accounts and bonds don’t offer much yield.

Aussie property tends to be very expensive which means shares are really one of the few high-yield options available right now.

Foolish takeaway

These are just a few reasons to buy ASX 200 shares in the current market rather than not investing at all and holding cash.

More reading

• Is $1,000 invested in AGL Energy shares a smart investment?
• Will the Afterpay share price hit $100 in 2020?
• Why Afterpay and these ASX shares just stormed to new highs
• 5 things to watch on the ASX 200 on Wednesday
• ASX 200 jumps almost 4%, Webjet share price soars

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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If you’re looking for a source of income from dividend shares, then I think Commonwealth Bank of Australia (ASX: CBA) is a great option to consider.

I believe it is the highest quality bank on the Australian share market and expect its shares to provide investors with a very generous yield in 2021 (even after factoring in a dividend cut).

However, given that a lot of investors already have meaningful exposure to the banks, it might not be suitable for everyone.

In light of this, I have picked out three ASX dividend shares which I think would be quality alternatives to the banks. They are as follows:

Aventus Group (ASX: AVN)

I think Aventus could be a good dividend option. It is a retail property company specialising in large format retail parks across Australia. Aventus’ rental income has a reasonably high weighting towards everyday needs, with homewares, electrical, furniture, bedding and hardware making up the balance. I think this is a good and robust mix and leaves it well-placed for growth over the coming years. In respect to its distribution, Goldman Sachs recently forecast a ~17.3 cents per unit distribution in FY 2021. This equates to a forward ~7.9% distribution yield.

Dicker Data Ltd (ASX: DDR)

Another dividend share to consider buying instead of the banks is Dicker Data. It is a leading distributor of information technology products. It has delivered consistently solid earnings and dividend growth over the last few years thanks to its strong market position, growing demand, and the addition of new vendors. The good news is that I remain confident that this growth can continue over the coming years. And based on the high levels of insider buying it continues to report, its management team does as well. This year Dicker Data intends to pay a 35.5 cents per share. This represents a fully franked ~5% yield.

Wesfarmers Ltd (ASX: WES)

Lastly, I think this conglomerate is a dividend share to buy. Wesfarmers is the company behind brands such as Bunnings, Kmart, Target, online retailer Catch, and Officeworks. In addition to its retail exposure, the company owns a number of businesses in the chemicals and industrials industries. It also has a hefty cash balance which I suspect could be used to make earnings accretive acquisitions in the near term. Combined, I believe Wesfarmers is well-placed to grow its earnings and dividends at a solid rate over the coming years. At present I estimate that its shares offer a forward fully franked ~3.5% dividend yield.

More reading

• 3 high yield ASX dividend shares for income investors
• ASX 200 jumps 3%: CBA rebounds, Afterpay hits a new record high
• Why I would buy Wesfarmers and these ASX dividend shares
• Can ASX big banks generate an attractive sustainable dividend yield from FY21?
• 2 of the best ASX dividend shares for retirees to buy today

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Dicker Data Limited. The Motley Fool Australia owns shares of Wesfarmers Limited. The Motley Fool Australia has recommended AVENTUS RE UNIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Webjet Limited (ASX: WEB) share price was on fire on Tuesday and rocketed materially higher.

The online travel agent’s shares jumped over 11% to finish the day at $4.10.

Despite this strong gain, the Webjet share price is still down over 57% since the start of the year.

Does this make Webjet shares a bargain buy?

Unfortunately, at the current level I think Webjet is far from a bargain buy. In fact, I believe it shares are very expensive despite their significant decline.

As I mentioned here previously, at the start of the year when nobody had heard of COVID-19, Webjet’s market capitalisation stood at just under $1.3 billion.

A market capitalisation is essentially the value of the company. It represents the total number of shares on issue multiplied by the share price of the time. At that point Webjet had a total of ~135.6 million shares outstanding and a share price of $9.49.

How much do you think Webjet’s market capitalisation is today?

Given that its shares price is down 57% since the start of the year, you might expect that its market capitalisation would be down by the same amount to $559 million. But it isn’t.

Webjet actually has a market capitalisation of approximately $1.4 billion.

Yes, you read that correctly. Despite the tourism industry grinding to a halt during the pandemic and the next year or two looking incredibly uncertain, investors are giving Webjet a higher valuation.

How is this possible? This appears to have been caused by investors not taking into account Webjet’s highly dilutive capital raising.

This capital raising means there are now a total of ~339 million shares outstanding. Which, when multiplied by the current share price, equates to a market capitalisation ~$100 million higher than its pre-pandemic valuation.

Short interest building.

In light of this, I can’t say I’m surprised that short sellers have begun to target Webjet. Short sellers are investors that profit when a share price declines.

On Monday, Webjet had 9.2% of its shares held short, making it one of the 10 most shorted shares on the ASX.

In light of the above, although I am a big fan of Webjet and its brands, I think it is a very risky share to own at the current level.

More reading

• ASX 200 jumps almost 4%, Webjet share price soars
• ASX 200 falls 2%, ASX travel shares drop heavily
• These 5 ASX shares were last week’s best performers
• Is the Webjet share price ridiculously cheap?
• ASX winners and losers from last week

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Webjet Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Afterpay Ltd (ASX: APT) share price has rocketed 93% higher since the start of the year to $56.52.

That would be impressive growth at the best of times, let alone after a steep bear market. Afterpay shares slumped as low as $8.01 before rocketing more than 600% higher in the last three months.

It’s been a wild ride for long-term Afterpay shareholders in recent years. In fact, the Afterpay share price was trading at just $2.95 in June 2017.

But could Afterpay repeat the trick and double again in 2020?

Why the Afterpay share price could surge higher

It’s fair to say investors panicked as coronavirus restrictions took hold in February. Shares in the buy now, pay later company plummeted lower before rocketing even higher than where they started.

Afterpay has a $15.1 billion market capitalisation right now. This means the Aussie payments company could leapfrog into the ASX 50 by the end of the year.

$100 per share seems like a long way from the current Afterpay share price of $56.52. However, Afterpay has proven time and again that it can deliver strong growth to shareholders.

The group’s retail merchant networks continue to grow and bad debts are staying low. Successful expansions into the United States and the United Kingdom have also been strong growth factors.

But there’s no such thing as a sure thing in ASX shares, particularly in this market. I’m expecting there to be more volatility on the way, especially as government stimulus measures are wound back.

If we see another strong earnings result, then the Afterpay share price could surge towards $100 per share. However, any slight wobble could send the company’s shares into another slump.

Foolish takeaway

The Afterpay share price has already delivered strong returns for long-term shareholders. But now it’s always a question of, ‘is it too late to buy?’.

I think there’s still strong growth potential for Afterpay despite increasing competition at home and abroad.

I wouldn’t say $56.52 per share is a cheap buy, but if earnings continue to grow then who knows how high it could go.

More reading

• Why Afterpay and these ASX shares just stormed to new highs
• ASX 200 jumps almost 4%, Webjet share price soars
• ASX tech shares are soaring – these are my top 3 today
• The Zip Co share price is up 500%. Too late to invest?
• Why Afterpay, Super Retail, Uniti, & Viva Energy are charging higher

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The All Ordinaries (ASX: XAO) returned to form on Tuesday and raced notably higher.

While the majority of shares on the index pushed higher, some climbed more than most.

Three ASX shares that climbed so strongly they reached new highs are listed below. Here’s why they are flying high right now:

Afterpay Ltd (ASX: APT)

The Afterpay share price hit a new record high of $57.07 on Tuesday. Investors have continued to pile into the buy now pay later sector on the belief that the pandemic has accelerated the adoption of the payment method. In addition to this, strong sales and customer growth in the United States and the prospect of an expansion into the Asia market in the future has got investors excited. The latter follows recent news that WeChat owner Tencent Holdings has become a substantial shareholder.

Macquarie Telecom Group Ltd (ASX: MAQ)

The Macquarie Telecom share price reached an all-time high of $35.00 yesterday. Investors were buying the data centre and telecom company’s shares on Tuesday after it revealed plans to build a new data centre. Macquarie Telecom will start building the Intellicentre 5 Bunker (IC5 Bunker) at its Canberra campus in July. This is in response to increased demand for cloud and cyber security services in its government segment. Stage one is expected to complete in December.

Ramelius Resources Limited (ASX: RMS)

The Ramelius share price stormed to new high of $1.86 on Tuesday. When the gold miner’s shares reached that level, it meant they were up 130% since this time last year. Investors have been buying Ramelius’ shares after the gold price charged higher in 2020 due to the pandemic and interest rate cuts. The company’s shares were also given a boost last week when S&P Dow Jones indices announced its inclusion in the S&P/ASX All Australian 200 Index from 22 June 2020.

More reading

• ASX 200 jumps almost 4%, Webjet share price soars
• Why I would buy CSL and these ASX blue chip shares
• ASX tech shares are soaring – these are my top 3 today
• The Zip Co share price is up 500%. Too late to invest?
• Why Afterpay, Super Retail, Uniti, & Viva Energy are charging higher

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia owns shares of AFTERPAY T FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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On Tuesday the S&P/ASX 200 Index (ASX: XJO) rebounded strongly and recorded a very strong gain. The benchmark index jumped 3.9% to 5,942.3 points.

Will the market be able to build on this on Wednesday? Here are five things to watch:

ASX 200 poised to extend its gains.

It looks set to be another good day of trade for the ASX 200. According to the latest SPI futures, the benchmark index is expected to open the day 26 points or 0.45% higher this morning. This follows a positive night of trade on Wall Street which saw the Dow Jones rise 2.05%, the S&P 500 jump 1.9% higher, and the Nasdaq index stormed 1.75% higher. Strong U.S. retail sales data helped drive Wall Street higher.

Oil prices rise.

Energy producers such as Oil Search Limited (ASX: OSH) and Woodside Petroleum Limited (ASX: WPL) could be on the rise today after oil prices pushed higher. According to Bloomberg, the WTI crude oil price rose 2.4% to US$37.99 a barrel and the Brent crude oil price climbed 2.5% to US$39.76 a barrel. Supply cuts have been supporting oil prices.

Gold price jumps.

It could be a positive day of trade for gold miners including Evolution Mining Ltd (ASX: EVN) and Saracen Mineral Holdings Limited (ASX: SAR). Overnight the gold price stormed higher amid concerns over a coronavirus outbreak in China. According to CNBC, the spot gold price is up 0.5% to US$1,735.90 an ounce

Viva Energy given buy rating.

The Viva Energy Group Ltd (ASX: VEA) share price was a very strong performer on Tuesday but could still go higher according to analysts at Goldman Sachs. This morning its analysts retained their buy rating and lifted their price target on the fuel retailer’s shares to $2.15. The broker notes that fuel volumes are recovering quicker than expected and its guidance is well ahead of consensus expectations.

Jumbo Interactive to return.

The Jumbo Interactive Ltd (ASX: JIN) share price is scheduled to return from its trading halt this morning. The online lottery ticket seller requested the halt on Monday while it prepared an announcement relating to the Western Australia lottery market. Last year the state government suggested it might privatise its wagering.

More reading

• ASX 200 jumps almost 4%, Webjet share price soars
• Top brokers just upgraded these ASX 200 shares today
• 3 ASX 200 shares to buy for income and growth
• Why I think this ASX 200 rally is fake
• UBS picks the best ASX retail stocks for the post COVID-19 world

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Jumbo Interactive Limited. The Motley Fool Australia owns shares of and has recommended Jumbo Interactive Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Australian share market is home to a number of world class healthcare companies such as Ramsay Health Care Limited (ASX: RHC) and Cochlear Limited (ASX: COH).

While I believe both companies still have a lot of growth left in them, the law of large numbers would indicate that the impressive growth rates they have achieved over the last decade or two will be hard to replicate in the future.

So, if you’re looking for outsized returns in the healthcare sector, you might want to look at a few up and coming healthcare companies that could be stars of the future.

Three small cap healthcare shares that I think are worth watching closely are listed below:

Mach7 Technologies Ltd (ASX: M7T)

The first small cap healthcare share to look at is Mach7. It is a medical imaging data management solutions provider which uses software to create a clear and complete view of the patient. This helps inform diagnosis, reduce care delivery delays and costs, and improve patient outcomes. The company has also just expanded its offering with the acquisition of Client Outlook. It is a leading provider of an enterprise image viewing technology and increases Mach7’s total addressable market from US$0.75 billion to US$2.75 billion. This is significantly more than the revenue of $9.1 million it recorded during the first half. 

Medadvisor Ltd (ASX: MDR)

A second small cap healthcare share to watch is this healthcare technology company. Medadvisor has a focus on personal medication adherence and offers an app that connects to pharmacy dispensing systems. It has been designed to ensure correct and reliable medication use. In Australia it has connected over one million users through nearly 60% of Australian pharmacies and a network of thousands of GPs. In addition to this, the company is operating in the United States, Asia, and UK markets.

Volpara Health Technologies Ltd (ASX: VHT)

A final small cap ASX healthcare share to watch is Volpara Health Technologies. It is a growing technology company that offers cost-effective, mission-critical software that help radiologists deliver the highest-quality breast imaging services. Volpara’s software also uses artificial intelligence imaging algorithms to assist with the early detection of breast cancer. Management estimates that it currently has a US$750 million annual recurring revenue (ARR) opportunity in breast cancer screening. This compares to the ARR of NZ$18 million it recorded in FY 2020.

More reading

• 2 ASX healthcare shares to buy for long-term growth
• 3 fantastic ASX 200 shares to buy right now
• Ramsay Health Care and 1 other ASX share I would buy for both growth and income
• Why you should watch these ASX small cap shares closely in the 2020s
• Insiders have been buying these ASX 200 shares

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 Cochlear Ltd., MACH7 FPO, MedAdvisor, and VOLPARA FPO NZ. The Motley Fool Australia has recommended Cochlear Ltd., MedAdvisor, Ramsay Health Care Limited, and VOLPARA FPO NZ. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The S&P/ASX 200 Index (ASX: XJO) jumped almost 4% today, it rose to 5,942 points.

The share market is rebounding again as the US Federal Reserve moved to start buying individual corporate bonds to add liquidity to the market.

The best ASX 200 performer

The strongest growth in the ASX 200 today came from Viva Energy Group Ltd (ASX: VEA). The share price went up by 15.5% after it announced profit guidance and gave a business update.

Viva Energy said that the group underlying earnings before interest, tax, depreciation and amortisation (EBITDA) for the first half of FY20 is expected to be approximately $257.5 million to $287.5 million.

The underlying net profit after tax (NPAT) is expected to be approximately $20 million to $50 million.

The ASX 200 business said that the announced on-market share buyback will commence in June 2020.

The company is going to proceed with its major maintenance of the residual catalytlic cracking unit during 2020 at a reduced cost and over an extended timeframe, with total capital expenditure of the event expected to be between $85 million to $100 million, down from $110 million to $140 million previously.

Total sales volumes for the first half of FY20 are expected to be approximately 6,100 million to 6,200 million litres. However, this has been offset by cost reductions and improvements in retail fuel margins.

Volatile shares jump higher

A number of volatile ASX shares bounced back today.

The Webjet Limited (ASX: WEB) share price rose by 11.4%. EML Payments Ltd (ASX: EML) saw its share price grow by 11.4%. The Afterpay Ltd (ASX: APT) share price climbed 10.5%. Zip Co Ltd (ASX: Z1P) experienced a 9.5% share price rise of. The Challenger Ltd (ASX: CGF) share price jumped 10%. The Flight Centre Travel Group Ltd (ASX: FLT) share price grew 7.8%.

According to the ASX, there were only two shares that fell in the ASX 200. The Saracen Mineral Holdings Limited (ASX: SAR) share price dropped 0.9% and the Pro Medicus Limited (ASX: PME) share price dropped 0.4%.

Pharmaceutical supply agreement

The pharmaceutical industry announced some positive news today. The government and health department has reached an agreement about an additional $92 million of funding through the community service obligation (CSO) as well as an introduction of a floor price to continue to support medicine supply through the wholesaler network over the next five years.

This new funding is effective from 1 July 2020. Both Australian Pharmaceutical Industries Ltd (ASX: API) and Sigma Healthcare Ltd (ASX: SIG) are part of the National Pharmaceutical Services Association (NPSA) industry body which made the announcement. The API share price went up more than 5% today. The Sigma share price also climbed 5% today.

Special dividend and capital return announced by Orora Ltd (ASX: ORA)

ASX 200 packaging business Orora held an extraordinary general meeting (EGM) today to approve a capital return and share consolidation. Both of these items were approved in the meeting today.

The sale of Orora’s Australasian fibre business to Nippon Paper Industries for $1.72 billion resulted in net proceeds after tax and costs of approximately $1.55 billion.

The Orora board decided that best thing to do with $600 million of that capital is to return it to shareholders. A special dividend of $450 million is the main element of the plan, which equates to 37.3 cents per share, partially franked at a rate of 50%.

The other $150 million will be delivered to shareholders by way of a capital return. It will be a cash payment of 12.4 cents per share. This was payment approved today at the meeting. The special dividend and capital return will be paid to shareholders on 29 June 2020.

The company now has little to no debt. The directors said they’d prefer the remaining proceeds are used for potential growth investment opportunities. However, if no opportunity is found then directors will consider an additional return of excess capital to shareholders.

More reading

• Top brokers just upgraded these ASX 200 shares today
• 2 unloved ASX shares that could stage a big turnaround
• ASX tech shares are soaring – these are my top 3 today
• 3 ASX 200 shares to buy for income and growth
• Why I think this ASX 200 rally is fake

Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of Emerchants Limited and ZIPCOLTD FPO. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. recommends Pro Medicus Ltd. The Motley Fool Australia owns shares of and has recommended Challenger Limited, Pro Medicus Ltd., and Webjet Ltd. The Motley Fool Australia owns shares of AFTERPAY T FPO. The Motley Fool Australia has recommended Emerchants Limited and Flight Centre Travel Group Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Rox Resources Limited (ASX: RXL) share price was a standout performer on the ASX today after the company announced a high-grade gold hit at one its mines.

This announcement saw the Rox Resources share price more than double, with shares closing 108.33% higher at 5 cents. This jump takes the company’s current market capitalisation to around $91 million.

Rox Resources is an emerging Australian minerals exploration company, with advanced gold and nickel projects in Australia.

The company owns a 70% interest in the Youanmi Gold Mine, and wholly-owns the Mt Fisher Gold Project, Fisher East Nickel Project and Colluabbie Nickel Project, all located in Western Australia.

What did Rox Resources announce?

This morning, Rox reported further results from the drilling program being undertaken at the Grace prospect at Youanmi. The current drill program commenced in late May and assay results have now started to flow in.

Rox stated that deepest drilling completed at Grace has intersected impressive gold grades, including:

• 25 metres at 34.79 grams per tonne (g/t) gold from 143 metres, including:
  • 6 metres at 140.7 g/t gold from 150 metres.

According to the company, this was the deepest intercept to date, extending mineralisation both along strike and down-dip.

Commenting on the drilling results, managing director Alex Passmore said:

“These very impressive results are the best we’ve seen and significantly, are from the deepest drilling at Grace to date. The exploration model we are applying at Grace is continuing to work well, delivering what is shaping up to be a substantial high-grade deposit. We look forward to updating the market on further assays as they become available.”

Recent developments

Today’s announcement follows Rox’s share placement and share purchase plan (SPP) recently undertaken to raise $12.7 million. In late May, the company completed a $8.74 million institutional placement at an offer price of 2.4 cents per share. And yesterday evening, Rox announced it has closed its SPP over-subscribed, accepting a total of $4 million.

The funds will be used to underpin the company’s growth plans at the Youanmi Gold Mine and Fisher East Nickel Project. Additionally, Rox has used some of the capital to increase its interest in the Youanmi joint venture from 50% to 70%. As announced on 11 June, the company exercised its option to acquire an additional 20% interest in the joint venture for $2 million cash and $1 million in shares.

The company’s joint venture partner for Youanmi, Venus Metals Corporation Limited (ASX: VMC), also saw its shares rise today, notching a 38.24% gain.

More reading

• 3 exciting small cap ASX healthcare shares to watch
• ASX 200 jumps almost 4%, Webjet share price soars
• Why I would buy CSL and these ASX blue chip shares
• 2 ASX healthcare shares to buy for long-term growth
• Top brokers just upgraded these ASX 200 shares today

Motley Fool contributor Cathryn Goh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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