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

Consumer-discretionary shares lifted U.S. stock indexes intraday while oil prices slid. The Dow Jones Industrial Average added 71 points, or 0.3%, to 21083. The S&P 500 rose 0.4% and the Nasdaq Composite climbed 0.6% - both heading toward fresh closing records. Strong first-quarter earnings and broadly upbeat U.S. economic data have pushed stocks higher this year despite waning expectations for tax cuts and fiscal stimulus from the Trump administration. Still, some investors say they remain wary of the stock run. The S&P 500 traded as of Wednesday at roughly 22 times its last 12 months of earnings, according to FactSet, above its 10-year average of 17 times trailing earnings. Consumer-discretionary stocks rose, among the biggest gainers in the S&P 500 for the day. Falling for the day, the U.S. gold price shed 0.3% to finish at 1,255.40 US$/oz.

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Latest Research

Argonaut expects the June Q to be the turning point for Saracen Mineral Holdings (SAR). We believe the inflection point to positive cashflow has been achieved and free cash generation should increase out to FY20. Following a period of heavy investment into growth and exploration, key projects including a second decline into the Karari mine and pre-stripping of the Thunderbox A Zone are largely complete. As a result, production has lifted to the target 300kozpa run rate and AISC is forecast to decline from ~A$1,350oz in FY17 to A$950/oz in CY20. Upcoming newsflow in H2 CY17 will likely to include; positive cash in the June Q (Argonaut est. $5-10m), a significant reserve and resource upgrade across most operations, a revised group five-year plan, a bulk underground mining study at Thunderbox and further exploration success across the asset base. Argonaut upgrades SAR to BUY from HOLD with a revised target price of $1.22 (previously $1.05).

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Latest News

Argonaut has acted as Lead Manager to Botanix Pharmaceuticals Ltd (ASX: BOT) (“Botanix”) in its oversubscribed placement of A$7.4 million to new and existing institutional and sophisticated investors.

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