Argonaut | The Natural Choice in Resources

Argonaut is a full service advisory, stockbroking & research and investment house with offices in Perth and Hong Kong. Argonaut is technically driven & focused on natural resource companies & businesses that service the metals, mining, energy and agri-business sectors. Argonaut has an established track record of creating significant wealth for clients.

Morning Notes

U.S. stocks rose on Tuesday, boosted by gains in financial and technology stocks. Strong housing data, rising oil prices and increasing confidence that higher interest rates won't undermine stock prices combined to help lift major indexes as investors sold govt. bonds and gold. All 10 S&P 500 sectors rose. Some investors said stocks were still absorbing recent indications that the U.S. Federal Reserve may raise interest rates in coming months. Rising rates are good for banks because they increase the gap between what banks charge on loans and what they pay for deposits, a spread known as the net interest margin. Sales of new homes rose at the fastest pace in more than eight years in April as prices rose, a sign of steady demand and limited supply. Purchases of new single-family homes jumped 16.6% from a month earlier to a seasonally adjusted annual rate of 619,000, the Commerce Department said Tuesday. That is the fastest pace since January 2008.

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Latest Research

With top line growth a tough ask, ASL’s strategy has been to focus on reducing costs and rationalising the business. The Company is executing, with today’s announcement that Drilling Tools Australia (DTA) is to be sold for $66m in addition to the sale of DT HiLoad and placing EDA on care and maintenance this half. We expect ASL to enter the next upcycle, when it comes, a leaner business. The strengthened balance sheet provides more comfort and flexibility and, in our view, there is deep value on a longer term view. We maintain a buy call on an unchanged valuation of $0.85

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Latest News

Argonaut as Joint Lead Manager has been successful in a heavily oversubscribed raising of A$74 million for Gold Road Resources Limited (ASX: GOR) (“Gold Road”) to new and existing institutional investors both in Australia and overseas including cornerstone investment by three high quality North American investors and a retail entitlement offer at an issue price of A$0.44 per share, together with Macquarie Capital (Australia) Limited.

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