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' gains faded, as investors focused on coming U.S. employment data. Worries about the health of the global economy have led some analysts to reconsider their forecasts on when the Fed will raise interest rates from record-low levels. U.S. economic reports this week culminate with Friday's employment report for August, which is expected to show an addition of 220,000 jobs, according to economists surveyed by The Wall Street Journal. The unemployment rate is forecast to tick down to 5.2% from 5.3%.  The Dow and the S&P both rose marginally, by 0.1% to 16,375 and 1,951 respectively.

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Latest Research

Argonaut’s valuation on Regis (RRL) increases to A$1.70 (was A$1.45) incorporating the Gloster and Baneygo deposits into our model. These increases modelled mine lives at Moolart Well to 4.5 years (previously 3.0) and Garden Well to 8.0 years (was 7.0 years). With a reinvigorated exploration effort, a pipeline of exploration targets and recently consolidated tenement packages, Argonaut considers further extensions highly likely. RRL generated one of the highest normalised FCF / oz margins during FY15. The stock offers size, liquidity, strong cash flow, dividend and arguably better production visibility than many peers with its open pit operations and a sizable Reserve base. Declining strip ratios at Garden Well and Rosemont should ensure RRL’s industry leading margins longer term. The recent announcements regarding Reserve update, FY16 guidance and exploration update were well received by the market. Although this resulted in significant share price appreciation, a solid September Q production would further enhance investor confidence and could translate into further upside. BUY maintained.

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Latest News

Argonaut, as Lead Manager, has been successful in raising A$5.5 million (gross) for East Africa Resources Limited (ASX: EAF) (“East Africa”) via a heavily oversubscribed public offer to new and existing investors of approximately 275,000,000 new ordinary shares at an issue price of A$0.02 per share.

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