Latest Research

GR Engineering (GNG) - Revenue Deferred

GR Engineering LogoGNG downgraded FY17 revenue guidance due to slippage in anticipated progress claim timing on recently awarded projects, causing ~$30m revenue to be deferred from FY17 into FY18. As a result, we have decreased our FY17 revenue and EBITDA forecasts to $215m and $16m respectively (previously $250m and $25m). More positively, this deferment of revenue has boosted FY18, where GNG has given guidance for $300-$330m. The anticipated record revenue for FY18 underpins our BUY recommendation on a revised valuation of $1.70 per share (previously $1.75).

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Kibaran Resources (KNL) - Revised BFS: Production Increased

Kibaran Resources LogoKibaran Resources (KNL) released a revised Bankable Feasibility Study (BFS) for its 100% owned Epanko Graphite project in Tanzania. The study outlines a 50% increase in production to 60ktpa graphite concentrate for a 15% increase in pre-production capex (US$88.9m vs the US$77.5m in the 2015 BFS). The project generates a 30% post-tax IRR and has an initial 18-year mine life. Epanko is differentiated from other potential graphite development projects by its high grade and its large flake size distribution. KNL is the only graphite developer to have the majority of its forecast production in binding offtake agreements with non-Chinese parties. The revised BFS is differentiated from other studies by the rigour of independent assessment to meet Tanzanian and international social and financial standards. The Company is also investigating downstream processing to produce battery grade spherical graphite, with a BFS expected Q3 CY17.

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Metro Mining (MMI) - Debt Secured - Ready To Break Ground

Metro Mining LogoMetro Mining (MMI) has secured $40m debt financing through Sprott Private Resource Lending and Ingatatus AG Pty Ltd, a related party of Metro’s strategic cornerstone shareholder Balanced Property. These funds will support development of the Bauxite Hills project which is expected to commence production Q2 CY18. MMI also announced that it had attained State Environmental Approvals and final Federal Approvals are expected imminently. Project construction is on track to commence Q3 CY17. Argonaut maintains a BUY recommendation with a $0.44 target price.

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Pacific Energy (PEA) - Contract Slippage

Pacific Energy LogoA significant rain event and contract delays will impact PEA’s short-term earnings, causing us to peel back our FY17 and FY18 forecasts. However, we believe the Company has strong long-term growth potential, underpinning the investment appeal. PEA has been a stand-out performer among resource services companies and on the back of a large pipeline of opportunities we maintain our positive longer-term view. We have decreased our valuation to $0.80 (previously $0.85), but maintain our BUY call.

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Tox Free Solutions (TOX) - FY17 Guidance

Tox Free Solutions LogoTOX’s segment expectations are largely positive aside from the ongoing challenging conditions in the Pilbara. Revised guidance for underlying FY17 EBITDA of $82-83m is slightly below our prior forecast, but importantly, we believe TOX will emerge from the current financial year with a strong, diversified base off which to grow. We are not expecting large acquisitions in the near term and FY18 will provide cleaner, easier to analyse, numbers. Our $2.50 blended valuation and buy call are maintained

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