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Evolution Mining (EVN) delivered March Q production of 191koz (+2% vs Dec Q 186koz QoQ) in line with Argonaut’s estimates of 191koz. All-in sustaining costs (AISC) of A$768/oz were -2% lower QoQ (A$784/oz in Dec Q). Standout performance came from the Ernest Henry (EH) asset with 23koz at AISC of negative -$510/oz (including by-product credits). Group operating mine cashflow of $175m (Mar Q $205m) and net mine cashflow of $111.4m (Dec Q $134.2m) were lower than expectations as a result of delayed shipments from Mt Carlton and Cowal and will be realised in the June Q. Group ore reserves increased to 7.1Moz (net of depletion) representing ~9 years of mine life on current production rates. We now forecast production at the mid-point of the revised 790-805koz FY18 production guidance. We revise our target price upwards to $3.01ps ($2.66 prior) and maintain our HOLD recommendation after recent share price strength.

Sino Gas and Energy (SEH) announced a strong increase in production which averaged 25MMscr/d for the March Q, up 16% Q-on-Q. Operating margins increased by 35% to US$4.8/Mscf driven by higher production and higher natural gas prices. SEH has now received Overall Development Plan (ODP) approval in-principle for Linxing (LX) and Sanjiaobei (SJB) with final finalisation for both expected in H1 2018. The only cloud looming over the ODP process is the ongoing negotiation with LX SOE partner CUCBM regarding profit and cost allocations under the Production Sharing Contract (PSC). We believe SEH should emerge from this process with an equivalent or better economic standing than at present.

St Barbara (SBM) announced March Q production of 86koz (-14% vs Dec Q) at an all-in sustaining cost (AISC) of $982/oz (+8% on Dec Q). Lower throughput at Gwalia was impacted by mine sequencing and was partly offset by high head-grades running at 15g/t (92% above reserve grades). Cash at bank increased by $50m to $262m after dividend payments of $16m and investments of $4m. Simberi FY18 guidance was updated to 125-132koz (from 115-125koz) to reflect improved operational performance, however costs have rose by 14% on lower grades and work stoppages. Full year group guidance now stands at 375-392koz (prior 365-385koz) at an AISC of $920-970/oz. We view SBM as a high-quality gold miner with significant free cash generation. We move to a HOLD recommendation (from SELL) following revisions to our model to push Gwalia mine life out to 10 years and increase our target price to $3.84 (prior $3.23ps).

Regis Resources (RRL) released March quarterly production of 85koz (-7%, Q-o-Q) which was in line with Argonaut's expectations whereby wet conditions resulted in disruptions to mining at the satellite pits. Group costs increased to $905/oz (vs $855/oz +7% Q-o-Q) on lower milled grades and higher strip ratios. Operating cashflow was $71m (vs $84m, +30% Q-o-Q) with cash and bullion decreased to $168m (-2% Q-o-Q). FY18 YTD production of 269koz at AISC $873/oz remains in line with refined production guidance of 355-360koz. We move to a HOLD recommendation (prior BUY) following recent share price strength and following revisions to our model. We increase our target price to $4.69ps ($4.62 prior).

Saracen (SAR) reported March Q results with group gold production of 79.7koz at an all-in sustaining cost (AISC) of $1,181/oz versus Argonaut’s forecast of 78koz at $980/oz. The Company’s cash and bullion increased $16.2m Q-on-Q to $91.5m with both Carosue Dam and Thunderbox generating strong free cash flow. Looking forward, SAR is focussed on defining a 7-year production outlook growing to 350-400kozpa. Organic growth through exploration is the key driver for this target and we believe higher production rates will be largely driven by successful Reserve expansion and an uplift in the average milled head grade.

OZ Minerals (OZL) released March Q results with 27.5kt copper and 30.8koz gold in concentrate at an all-in sustaining cost (AISC) of US$1.36/lb versus Argonaut’s forecast of 23.0kt and 33.0koz at US$1.30/lb. Open pit operations at Prominent Hill are now complete and mining will now transition to 100% underground ore with the mill being topped up with stockpile feed. Carrapateena development remains on track with $65m spent during the Q, leaving $~743m to completion. In March, OZL announced the acquisition of Avanco Resources (AVB) for ~$418m comprising 50:50 cash and scrip. Argonaut values AVB at $400m making the acquisition roughly value neutral, however we acknowledge the high strategic value as OZL gains a foothold in the proven IOCG district of Carajás, in Brazil.

Metro Mining (MMI) is on the cusp of its first shipment from the Bauxite Hills Project in Northern Queensland. Product is currently being stockpiled with barging and ship loading to commence from the 18th April. MMI’s first sales are fortuitously timed amidst positive macro factors, such as US Sanctions on Russian global major Rusal and Chinese refinery restarts, which are pushing up alumina and aluminium prices. MMI will ship at an initial 2Mtpa rate then ramp up to 6Mtpa over four years, making it the largest Australian bauxite exporter after RIO.

Myanmar Metals (MYL) holds an option to acquire a majority stake in the Bawdwin Mine in Myanmar, which we regard as the best under-exploited polymetallic asset globally. Large scale mining at Bawdwin ceased during WWII leaving intact a high-grade core resource of 41.4Mt at 5.7oz/t silver, 11% zinc & lead and 0.33% copper. MYL is scheduled to exercise its option on Bawdwin in May and gain a 51% majority stake and operatorship of the mining concession which incorporates the resource, a 38km2 land holding, hydro power, and access to strategic transport routes and water. SPEC BUY recommendation.

OZ Minerals (OZL) has made an off-market takeover offer for Avanco Resources (AVB, not covered) comprising 8.5¢/sh cash and 0.009 OZL shares for every AVB share (50:50 cash/scrip). This values AVB at 17¢/sh or $418m which is a 119% premium to the company’s 1-month VWAP. While this represents a significant premium to the last price of 7.7¢/sh, OZL is buying a large portfolio of complementary copper/gold assets and will attain a foothold in a proven IOCG district of Carajás in northern Brazil. Our modelling indicates that OZL can fund the acquisition from existing cash whilst still funding the remaining $808m for the Carrapateena project and maintaining dividends. BUY recommendation.

PEA has acquired Contract Power, one of its key competitors in remote power supply. The $90m acquisition ($85m cash and $5m scrip) will be debt funded with the acquisition price implying a 6x EV to FY19f EBITDA multiple which, in our view, is fair for a business with the sort of long term earnings visibility that Contract Power offers. On our numbers we forecast the deal will be ~10% EPS accretive in FY19. We believe PEA is now very well positioned to capitalise on a strong growth pipeline and maintain our BUY recommendation on a revised $0.80 valuation (previously $0.70).