Azzet reports on three stocks with price moving updates today.
EOS rallies after inking US$80m contract ~
Shares in Electro Optic Systems Holdings (ASX: EOS) were trading over 26.4% higher by 1:40 pm AEDT (2:40 am GMT) – pushing the stock’s valuation past A$1 billion - after the counter drone mid-cap stock announced a lucrative contract to supply a high-energy laser weapon to a South Korean customer.
The binding conditional contract valued at US$80 million (about $120 million) will see EOS manufacture and supply a 100kW high-energy laser weapon system to an undisclosed customer in the Republic of Korea.
Subject to regulatory approvals and contract conditions being met, the agreement also includes a newly formed joint venture between EOS and the customer to supply the [laser system] weapons within South Korea and would license the intellectual property around the weapon to the new joint venture company.
Once completed, the contract is expected to represent EOS’s second export order for its 100kW-class laser defence technology, with production planned at its Singapore manufacturing facility and delivery expected by the end of 2027.
Commenting on today’s update, management told the market that the conditions of the contract include the payment by the customer of the initial deposit (US$18 million), the customer procuring the issuance of a letter of credit for the remaining amount of the contract, and the customer inspecting and being satisfied with EOS' Singapore facility.
The customer expects these to be completed prior to 31 January 2026.
The contract was also subject to customary terms, including milestone payments and full refund entitlements in the event of non-performance.
“The EOS laser weapon development program included three years of field testing and numerous firing trials of the laser in close collaboration with customers,” management said.
“To ensure high performance, it is supplied with algorithms, radar, threat detection, target acquisition and beam locking systems.”
Investors wanting more detail should listen to tomorrow’s webinar, during which managing director Dr Anreas Schwer is expected to discuss the new contract.
While the stock’s share price has been on the rise all year, it took off in August and peaked at over $10 a share in early October.
By early December, the stock had given back half of that value, before embarking on another ascent last week.
Despite the recent rollercoaster ride, the stock is up more than fourfold on the $1.30 it was trading at on 2 January this year.
Underpinning EOS’ turnaround story is the pace at which modern warfare is changing, courtesy of the Ukraine war and the tension between Israel and Iran.
To the uninitiated, the company produces everything from remote weapon stations (RWS), counter-drone systems, high-energy laser weapons, and technology used for tracking activity in space.
What started the share price rally in August was a major contract coup from the Netherlands valued at around $125 million, which marked the world's first export order for a laser defence system in the 100-kilowatt class.
Following today’s second watershed laser order, there’s growing market speculation that a $500-plus million contract in the Middle East could be in the making.
Several brokers already have 12-month price targets of between $8.10 and $11.18 before factoring in any of these potential contract wins.
Electro Optic Systems Holdings has a market cap of $1 billion; the share price is up 411% in one year and up 27% in the last week.
While EOS's 200-day moving average is trending upwards and highlights long-term investor interest in the stock, the 20-day moving average is falling as upwards momentum wanes.
Consensus is Strong Buy.
Redcastle Resources Ltd soars on exceptional gold grades update
Shares in Redcastle Resources (ASX: RC1) were trading 6.7% higher after the junior gold and minerals explorer reported promising initial assay results from its grade control drilling at the Redcastle Reef deposit in the Eastern Goldfields of WA, revealing exceptionally high-grade gold intercepts.
These results confirm the continuity and high-grade nature of the mineralised system, supporting the existing Mineral Resource Estimate and enhancing the company’s mine planning and production capabilities.
Exceptional gold grades from initial grade control drilling at the Redcastle Reef deposit, including 1m at 3,650g/t gold from 15m, within a broader 7m interval averaging 527g/t gold.
The company said the drilling program is aimed at refining grade definition for mine planning, with further results expected as the program continues.
Commenting on today’s update, management told the market that it’s particularly encouraging to see that RB JV grade control drilling is supporting RC1’s existing Mineral Resource Estimate (MRE) drilling results.
“Redcastle Reef has long been recognised for the presence of coarse gold, and these results further confirm that characteristic,” the chairman noted.
“RC1 is fortunate to have access to experienced personnel with extensive expertise in managing coarse-gold mineralisation in the Eastern Goldfields over many years.”
Redcastle’s JV with BML - a leading gold mining contractor based in Kalgoorlie – is expected to realise the company’s vision of delivering cash flow and shareholder value from its Queen Alexandra and Redcastle Reef projects within the prolific gold province.
The miner expects to achieve capital-light early production due to BML’s decision to fund 100% of the mining and working capital required to deliver first revenue, estimated in a recently completed scoping study to be around $20 million.
BML will be arranging and funding processing and related costs until first revenue, while also managing all day-to-day mining operations and arranging toll milling agreements, and in return, will receive 50% of surplus gold sales proceeds after recovering costs.
Much of this strategy is based on the maiden resource of 13,000oz for Redcastle Reef and the updated resource of 29,000oz contained gold at Queen Alexandra.
According to a scoping study, a 10-month toll treatment pathway for Queen Alexandra could produce around 13,700 oz and generate gross revenue of ~$65.6 million and an undiscounted, pre-tax cash surplus of between $14 million and $15 million.
Redcastle Resources has a market cap of $10 million; the share price is up 5% in the last year and up 3.7% in the last week.
The stock’s shares appear to be in a long-term bearish trend, confirmed by multiple indicators.
Consensus does not cover this stock.
Fortescue sinks after taking full ownership of Alta Copper
The market spend little time deciding what it thought of Fortescue Metal Group’s (ASX: FMG) plans to buy the remaining 64% of Canada’s Alta Copper Project in northern Peru it doesn’t already own – valuing the target at CN$139 million – with the share price down 0.7% this afternoon.
The deal will see Alta shareholders receive cash consideration of CAN$1.40 per share, representing a significant and attractive premium of 50% to Alta Copper’s 30-day volume weighted average price (VWAP).
It’s understandable that Alta’s directors – who collectively own 12.5% - have unanimously recommended shareholders vote in favour of the deal.
Management told the market today that this low-risk, low-cost bolt-on, which strengthens the company’s long-dated copper pipeline, is consistent with its critical minerals strategy, which is focused on expanding the company’s copper portfolio.
“Fortescue is well placed to advance the Cañariaco Project relying on its presence in Latin America since 2018 and its well established technical, permitting and community engagement expertise,” management noted.
“Following completion of the Transaction, Fortescue will apply its proven approach of working collaboratively with local and indigenous communities to ensure the responsible, long-term development of the Cañariaco Project.”
While the deal is unlikely to affect near-term cash flow, EPS, or valuation metrics, it reinforces management’s focus on long-dated copper growth while maintaining iron ore cash flow and capital discipline.
According to RBC Capital Markets, the deal reflects a subtle re-weighting toward copper optionality, contrasting with prior high-capital energy initiatives, with limited immediate spend and potential upside if copper prices remain structurally strong.
While management clearly sees today’s announced Alta buyout as a strategic rather than an earnings-driven move - enhancing Fortescue’s copper portfolio depth - investors will want clear milestones on permitting, capex, and development sequencing before assigning value to the asset.
The Cañariaco Copper Project is understood to include the Cañariaco Norte and Sur deposits and the Quebrada Verde prospect across 91 square kilometres.
Cañariaco hosts measured and indicated resources of 1.1 billion tonnes at 0.42% copper equivalent, plus inferred resources of 0.9 billion tonnes at 0.29% copper equivalent.
A preliminary economic assessment completed in June 2024 outlined the potential for a long-life copper operation.
Fortescue Metal Group has a market cap of $69.7 billion; the share price is up 16% in one year and up 12% in the last month.
The stock appears to be in a strong bullish trend, confirmed by multiple indicators.
Consensus is Hold.
This article does not constitute financial or product advice. You should consider independent advice before making financial decisions.