Vision Lithium Inc. (TSXV: VLI) is a mineral exploration company, is engaged in the exploration and evaluation of mineral resources in Québec, Canada. The company explores lithium, gold, copper, zinc, and base metals. Its flagship project is the Godslith lithium property covering an area of 5,560 hectares located to the northwest of Gods River, Manitoba. Vision Lithium Inc. was incorporated in 1997 and is headquartered in Val-d’Or, Canada.

Financial & Operational Updates:

• For the quarter ending November FY21, the company witnesses an increase in an operating loss of 11.4% to CAD 202K as compared to the operating loss of CAD 181K for the quarter ending on November FY20.
• The net loss was curtailed to CAD 120K for November FY21 vs the net loss of CAD 171K for the quarter ending on November FY20 because of a Deferred tax Income of CAD 78.7k.
• The company recorded cash outflows (negative) from operating activites to CAD 168.2K in November FY21 quarter as compared to the positive cash flows from operations of CAD 8.4K in the November FY20 quarter.
• On the business front, the company announced that it initiated the drilling on its recently acquired Cadillac Lithium Property, for exploring high-grade metal.  
  

Technical Analysis:

The stock witnessed a vertical rise, in February 2021, breaching the CAD 0.80 levels to print the highs of CAD 0.95, to pull back eventually. The cool-off, printed the lows around CAD 0.10 during October 2021 and from there the stock gained some traction and again sold off at the rallies. The Relative Strength Index is placed to 35.66 levels which is levying down and can break the 30 mark, indicating the over-sold territory. The biggest proponent of the long-term trend, 200 DMA is above the stock price, indicating the stock's downtrend at current levels. For the prices to move towards the North, the 200 DMA has to be placed beneath the stock prices and the recent resistance of CAD 0.215 has to be pierced, keeping the support of CAD 0.13 on the charts.

Stock Recommendation:

Increasing losses, negative cash outflows, lack of updates on the recent mining and exploration activities, when clubbed with the weak technical, gives the investors a sense of discomfort to consider the stock for investment purposes. Hence, we recommend the rating of ‘Avoid’ to the stock at the closing price of CAD 0.165 as of 4 February 2022. 

One-Year Technical Price Chart (as on February 4, 2022). Source: REFINITIV, Analysis by Kalkine Group

*The reference data in this report has been partly sourced from REFINITIV.

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