Latest Research

CTI Logistics Limited (CLX) - Across The Nullarbor

CTI Logistics Limited LogoThe $7.5m acquisition of Jayde Transport fits with CLX’s intention to build a national transport and logistics business. It is strongly accretive given a compelling EBITDA acquisition multiple of 3.2x. We anticipate a slowly reviving WA economy to be reflected in west coast earnings over time, while an increasing east coast exposure expands CLX’s footprint and provides stability. We believe CLX is building a solid platform off which to grow, is ably led by an experienced management team, and is trading on undemanding multiples. We maintain a buy call on a revised valuation of $1.60 (prior $1.50).

read more...

Swick Mining Services (SWK) - Re-Initiation

Swick Mining Services LogoSwick’s latest innovation, Orexplore, has the potential to significantly disrupt the multi-billion-dollar a year minerals analysis industry and is a world-first technology. If commercialised successfully we believe Orexplore will provide substantial growth in coming years. We also expect growth from Swick’s core drilling business on the back of margin expansion in an improving commodities environment. These strong growth prospects underpin our BUY recommendation on a blended valuation of $0.40 per share.

read more...

Independence Group (IGO) - Pivotal Quarter

Independence Group LogoIndependence Group (IGO) released September Q results with all assets generating positive free cashflow (FCF) and producing within stated guidance. Most notable was Nova nickel /copper achieving commercial production, ramping up to near-nameplate throughput. On a group level, IGO returned to positive FCF, before a $29m debt repayment. Net debt decreased to $142m (from $164m). Argonaut downgrades to a SELL (from HOLD) upon valuation grounds.

read more...

Saracen Minerals Holdings (SAR) - Bursting Out Of The Gate In Q1

Saracen Minerals Holdings LogoSaracen (SAR) released September Q results with group production of 80.3koz, in line with the June Q, with an 11% decrease in all-in sustaining costs (AISC) to A$1,008/oz. Annualised production is tracking at 321koz, well above the 300koz guidance for FY18. However, SAR is resisting an early upgrade, taking a wait-and-see approach on the performance from the high/grade nuggetty Kailis pit which comes on line in the current Q. Cash and bullion increased by $15.3m QoQ to $60.5m. Argonaut maintains a HOLD recommendation and a $1.35 target price.

read more...

Western Areas (WSA) - Recovery Project Opens Up New Doors

Western Areas LogoWestern Areas (WSA) released September Q results with 5.3kt nickel in concentrate production at C1 cash costs of A$2.49/lb (before payability), down 7% and up 3% respectively. The Mill Recovery Enhancement Project (MREP) is well advanced and expected to commence commissioning in Q1 2018. This project will both enhance nickel in concentrate recoveries and produce a higher grade nickel product for the battery market. WSA retains a strong balance sheet with $146m cash and receivables (no debt). Downgrade to SELL based upon valuation grounds.

read more...