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Northern Star (NST) delivered a weaker Dec Q with production of 214koz at an elevated AISC of $1,365/oz (-6% on production, +11% on costs, vs Sept Q 208koz @ AISC $1,226/oz). The result was impacted largely as a result of lower production at Jundee and higher costs across the board. Net cash increased to $292m (+5% vs Sept). Mined and milled tonnes rose by 3%/7% respectively. FY19 guidance has been maintained at 850-900koz, however full year cost guidance has increased to $1,125- $1,225/oz, reflecting up front capital investment at Pogo and NST’s mining for margin strategy of lower grade ores in a higher gold price environment. A strong 2HFY19 rebound is highly likely at Pogo, but the stock’s premium trading metrics appear to be less justified after what we feel was a subdued performance. HOLD maintained.

Saracen Mineral Holdings (SAR) released December Q results with strong group production of 88.8koz at an all in sustaining cost (AISC) of A$1,067 (vs September Q : 88.9koz @ A$993/oz). Subsequent to a strong first half, SAR has increased FY19 guidance from 325-345koz to 345-365koz. SAR has also upscaled FY19 capital commitments with an additional $35m for mine development at Karari/Dervish and Thunderbox. At 31 December the Company had $142.6m in cash, bullion and liquid assets. Downgrade to SELL from HOLD with a revised $2.10 target price (from $1.85).

With all geographic regions contributing for Austal, we have long expected a solid performance in FY19. Recent share price moves reflect this positive outlook. In our view, consistent margins and earnings in the US, together with a growing level of group Support work (>$200m in FY18), helps underpin earnings. Meanwhile, investment in new designs and technology, and expanding capacity in Australasia, sets ASB up to take advantage of growing demand in the commercial ferry market. BUY maintained on a $2.30 blended valuation (prior $2.25).

Paladin Energy (PDN) released December quarter results with sales of 475,000lbs at US$31.41/lb, generating US$14.9m revenue. This was in-line with forecast sales from the previous quarter. The Company ended 2018 with US$44m cash, up from US$31m at 30 September. PDN’s Langer Heinrich and Kayelekera mines are on Care and Maintenance while uranium prices remain low. The Company has initiated a concept study on Langer Heinrich to investigate options to decrease costs, increase throughput and productivity and potentially recover vanadium as a by-product. Argonaut maintains a BUY recommendation with a $0.28 target price.

CLX’s operations closely mirror the business cycle, and with a WA recovery taking time and growth risks elsewhere in the country, we build more conservatism into our forecasts. Positively, CLX exhibits greater geographic diversity, while consolidation and cost control in WA positions the Company to benefit from an eventual turnaround. Our blended valuation remains $1.35 and CLX continues to trade on undemanding multiples in our view. We remain positive on the longer term outlook, and retain our BUY call accordingly, although acknowledge the current macro environment is likely to extend the recovery period.

Stanmore Coal (SMR) produced a stellar December Q with ROM coal production of 799kt and total sales of 573kt, up 60% and 80% respectively. This result comes after a successful transition from Isaac Plains (IP) to Isaac Plains East (IPE) mining area. ROM coal production was at a 3.2Mtpa annualised run rate versus the nameplate throughput for the Coal Handling and Wash Plant (CHPP) of 3.5Mtpa. Cash decreased from $19.3m at the end of September to $9.6m. This follows a heavy build in working capital, which has since unwound leaving a current cash balance of ~$31.2m (no debt). Golden Investments issued a third and final takeover offer, which is now unconditional, with an unchanged all-cash price of $0.95/sh. Given the independent expert’s valuation of $1.48-1.90/sh, we do not believe the bid will be successful. BUY recommendation with a revised $1.75 target price.

Genesis Minerals (GMD) has released several key updates from its Ulysses Project which continues to show the potential to expand the resource inventory. Drilling at Orient Well, 10km east of Ulysses returned high grade intercepts including 20m @ 9.10g/t Au which remains open along strike in both directions. At Ulysses, zones of mineralisation have been extended outside of the current resource envelope adjacent to existing mineralisation as well as a new zone discovered at Ulysses East over ~350m along strike from the existing 760koz resource. We see strong potential for further discoveries at Ulysses which will
ultimately see growth in the resource inventory in the near term. With the lack of quality near term development assets on the horizon, we continue to believe that GMD remains a strong candidate as an acquisition target which trades on cheap metrics with significant exploration upside. Speculative Buy maintained and $0.10ps target price.

AMN continues to advance its DFS and has completed a number of key activities. AMN is also looking to reduce its upfront costs by trucking LNG to the Lake Mackay project rather than building a gas pipeline. The company is also studying the option of splitting the plant between Lake Mackay and the Wyndham Port to save on capex and opex. The WA government has reduced rents on brine projects due to large tenements holdings. We are upgrading AMN to a Speculative Buy from a Hold with a price target of $0.94.

GRB has expanded on its vision for greater east coast penetration. By replicating WA’s brand-in-hand success, investing in sales and marketing, and establishing potential eastcoast venues, retail growth is expected to follow. Together with indications of higher output from the Palmyra brewery (up to 14M litres instead of the 11M litres in the original plan), it suggests potential upside to our (largely unchanged) numbers. Our target price of $0.129 continues to back a BUY call, as does the strong momentum, strategy evolution, and the brands’ potential attractiveness as an addition to a larger brewer’s portfolio.

Atrum Coal (ATU) released an updated resource for its 100% owned Elan South coking coal project in Alberta, Canada with a 170% increase to 97Mt. Elan South abuts Riversdale Resources’ 195Mt Grassy Mountain (unlisted) to the south. Grassy Mountain has attained A$99m cumulative investments from Hancock Prospecting for a 19.99% equity stake equating to ~A$500m on a 100% basis. Teck Resources has five mines to the west of Elan with a ~25Mtpa production profile. This region is an established source of high quality seaborn hard coking coal. Initial quality testing of Elan South shows low ash, sulphur and phosphorous with volatile matter, swell and coal ranking properties suitable for the hard coking coal market. We introduce a SPEC BUY recommendation.