Encounter Resources Limited (ENR) AI Stock Analysis

• Market Cap: AU$122.20M
• Dividend Yield: N/A
• Average Volume (3M): 624.01K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.18
• Revenue Growth: N/A
• EPS Growth: 42.99%
• Country: AU
• Employees: N/A
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Industrial Materials
• EPS (TTM): >-0.01
• Shares Outstanding: 498,792,330
• 10 Day Avg. Volume: 406,672
• 30 Day Avg. Volume: 624,006
• PEG Ratio: 0.86
• Price to Book (P/B): 5.51
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -37.23
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 40 Underperform
• Price Target: ―

Encounter Resources Limited is facing substantial financial difficulties, evidenced by significant losses and negative cash flows despite a strong equity base. The technical indicators suggest ongoing bearish momentum, and the negative valuation metrics highlight profitability issues. Without an earnings call or significant recent corporate events to influence the outlook, the stock remains weak amid operational and market challenges.

Encounter Resources Limited Business Overview & Revenue Model

Company Description

Encounter Resources Limited engages in the exploration and development of mineral deposits in Australia. It explores for zinc, copper, gold, and cobalt deposits. The company holds interests in the Lamil and Yeneena projects located in the Paterson Province, Western Australia. It also holds interests in the Aileron project situated in the West Arunta, Western Australia; and the Elliott copper project located in the Northern Territory. The company was incorporated in 2004 and is based in Subiaco, Australia.

How the Company Makes Money

Encounter Resources Limited makes money by engaging in exploration activities to discover valuable mineral resources. The company generates revenue primarily through the sale or joint venture of its exploration projects once viable mineral deposits are identified and assessed. Key revenue streams include proceeds from selling exploration licenses and entering into partnerships or joint ventures with larger mining companies. These partnerships often involve larger companies providing funding for further exploration and development in exchange for a stake in the projects. Encounter Resources Limited may also earn revenue from government grants or incentives designed to support mineral exploration activities.

Encounter Resources Limited Financial Statement Overview

Summary

Encounter Resources Limited faces significant financial challenges, primarily due to lack of revenue generation and persistent losses. While the company maintains a strong equity base and low leverage, operational inefficiencies and negative cash flows hinder financial health. Without substantive revenue growth or operational improvements, the company risks continued financial strain.

Income Statement

Encounter Resources Limited has experienced significant revenue volatility, with recent years showing negligible revenue and negative net income. The company shows a consistent pattern of operating losses, as indicated by negative EBIT and EBITDA margins. The negative net profit margin further highlights profitability challenges. Historical revenue growth has been inconsistent, with recent declines impacting overall financial performance.

Balance Sheet

The balance sheet reveals a strong equity position, with the company maintaining a low debt-to-equity ratio, indicating limited leverage and financial risk. The equity ratio is robust, underscoring financial stability. However, the absence of revenue growth and ongoing losses in net income are concerning, reducing the effectiveness of the equity base in generating returns.

Cash Flow

Cash flow analysis indicates ongoing negative free cash flow, reflective of substantial capital expenditures without corresponding revenue growth. Operating cash flow remains negative, raising concerns about the company's ability to cover its costs. Financing cash flows have been positive, driven by external funding, which may not be sustainable long-term without operational improvements.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
0.00	0.00	135.00	6.59K	144.49K	42.00K
	Gross Profit
-8.44K	-74.42K	-73.63K	-62.06K	119.81K	41.34K
	EBIT
-2.96M	-2.50M	-1.63M	-5.42M	-1.56M	-1.43M
	EBITDA
-255.25K	-1.76M	-1.36M	4.50M	-1.51M	-1.13M
	Net Income Common Stockholders
-2.77M	-4.33M	-1.43M	4.43M	-1.53M	-1.13M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.66M	14.05M	11.82M	2.17M	5.69M	1.87M
	Total Assets
52.31M	37.93M	30.15M	16.66M	22.32M	16.89M
	Total Debt
173.20K	205.90K	49.06K	116.95K	177.42K	0.00
	Net Debt
-22.49M	-13.84M	-11.77M	-2.05M	-5.51M	-1.87M
	Total Liabilities
1.72M	1.68M	1.30M	470.09K	811.10K	554.19K
	Stockholders Equity
50.58M	36.25M	28.84M	16.19M	21.51M	16.33M
Cash Flow		Free Cash Flow
-10.70M	-9.03M	-4.27M	-3.77M	-5.14M	-2.97M
	Operating Cash Flow
-747.58K	-533.38K	-571.44K	-715.32K	-711.94K	-527.81K
	Investing Cash Flow
-9.66M	-8.22M	-3.32M	-2.81M	-1.68M	-1.45M
	Financing Cash Flow
25.61M	10.99M	13.55M	679.00	6.22M	1.36M

Encounter Resources Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.23
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AU:ENR, the sentiment is Positive. The current price of 0.23 is below the 20-day moving average (MA) of 0.24, above the 50-day MA of 0.21, and below the 200-day MA of 0.30, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 58.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AU:ENR.

Encounter Resources Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CYL	62 Neutral	AU$1.46B	17.39	35.27%	―	148.01%	―
CHN	56 Neutral	€601.05M	―	-16.63%	―	―	57.93%
Sector *	51 Neutral	$2.01B	-1.27	-21.11%	5.15%	2.92%	-30.46%
STM	45 Neutral	AU$103.07M	―	-2.97%	―	―	-20.00%
MTH	41 Neutral	AU$70.74M	―	-5.23%	―	―	54.26%
ENR	40 Underperform	AU$122.20M	―	-7.21%	―	―	42.99%

Encounter Resources Limited Corporate Events

Encounter Resources Announces Cessation of Securities

Encounter Resources Limited announced the cessation of certain securities, including options and performance rights, due to expiry or unmet conditions. This development may impact the company’s capital structure and could influence investor perceptions regarding its strategic initiatives and financial health.

Encounter Resources Cancels Employee Incentive Securities

Encounter Resources Limited announced the cancellation of 700,000 unlisted employee options and 125,000 employee performance rights due to cessation of employment, along with an additional 800,000 unlisted employee options that expired on April 30, 2025. This move reflects the company’s ongoing adjustments in its employee incentive program, potentially impacting its operational dynamics and aligning its workforce incentives with current strategic goals.

Encounter Resources Secures Government Grants for Key Exploration Projects

Encounter Resources Limited has been awarded co-funded grants totaling up to $430,000 under the Western Australian Government’s Exploration Incentive Scheme. These grants will support a regional airborne electromagnetic survey at the Aileron project in the West Arunta, which aims to assist with carbonatite targeting, identify potential copper sulphide mineralization, and define water resources. Additionally, a drilling grant will support exploration at the Lamil copper-gold project in the Paterson Province, where previous drilling has indicated promising gold mineralization. These initiatives are expected to enhance Encounter’s exploration capabilities and potentially lead to significant resource discoveries, bolstering its position in the mining industry.

Encounter Resources Issues Unlisted Options as Part of Employee Incentive Scheme

Encounter Resources Limited has announced the issuance of 700,000 unlisted options exercisable at $0.336, set to expire on March 31, 2029. This move is part of an employee incentive scheme and is not intended for quotation on the ASX, reflecting the company’s ongoing efforts to incentivize its workforce and align their interests with long-term corporate goals.

Encounter Resources Issues New Employee Incentive Securities

Encounter Resources Limited has announced the issuance of 700,000 unlisted employee options and 125,000 employee performance rights as part of its Employee Share and Option Plan and Performance Rights Plan. This move is aimed at incentivizing employees and aligning their interests with the company’s growth objectives, potentially enhancing operational performance and stakeholder value.

Encounter Resources Kicks Off 2025 Exploration at Aileron

Encounter Resources Limited has initiated its 2025 exploration activities at the Aileron project in the West Arunta region, WA. The program includes extensive drilling and geophysical surveys aimed at defining and expanding mineral resources, particularly niobium and rare earth elements. The initiative is supported by the WA Government Exploration Incentive Scheme and involves a comprehensive approach to resource definition and environmental assessment, potentially enhancing the company’s position in the mineral exploration sector.

Encounter Resources Limited Releases Interim Financial Report for 2024

Encounter Resources Limited has released its interim consolidated financial report for the half-year ended December 31, 2024. The report includes various financial statements such as the statement of profit or loss, financial position, changes in equity, and cash flows, providing stakeholders with a comprehensive overview of the company’s financial performance during this period.

Encounter Resources Highlights Strategic Focus at Investor Conference

Encounter Resources Limited announced its participation in the Euroz Hartleys Institutional Investor Conference, highlighting its efforts to build shareholder value through the discovery of niobium and copper in Australia. The announcement underscores the company’s strategic focus on mineral exploration, which is crucial for its market positioning and potential growth, though it also acknowledges the inherent risks and uncertainties involved in such ventures.

Encounter Resources Announces Director’s Change in Securities Interest

Encounter Resources Limited announced a change in the director’s interest, specifically regarding Mr. Philip Crutchfield’s acquisition of securities in the company. This update reflects the company’s ongoing governance and transparency practices, potentially impacting stakeholder perceptions and the company’s market positioning.