Argonaut | The Natural Choice in Resources

Morning Notes

Poor earnings results and falling oil prices pulled back the S & P 500 by 0.4% to 2,756; AUD reaches 2018 low as Scott Morrison faces prospect of minority government; Euro under pressure as the U.K. and E.U disagree on Brexit conditions; Gold $1222, AUD Gold $1727, HUI -1.35%, GDXJ -1.21%, Silver $14.57, Plat $823; Iron Fe 62% $74.40, Fe 58% $49.30, Rebar 4168, BHP adrs +0.72% disc A$33.34; WTI $69.36, Brent $79.83, U.S. producers have been pumping more than 10.5m barrels a day since April, and U.S. crude stockpiles rose by 3m barrels last week, according to Bloomberg; Turkish government is due to publish their findings post an investigation into the death of Jamal Khashoggi.

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Latest Research

Kidman Resources (KDR) released an integrated study for the Mt Holland mine and lithium concentrator and the Kwinana lithium hydroxide (LiOH) refinery (50:50 JV between KDR and SQM). The study outlined up to 47 years project life producing 45.3ktpa LiOH with upfront capex of US$601m and cash operating costs of US$5,409/t (per tonne LiOH). We place Mt Holland in the top three hard rock lithium projects globally given its scale, grade, geometry and low sovereign risk jurisdiction. Unfortunately, KDR has not had resolution to date for an exemption from claims relating to minimum expenditure obligations for tenements held by Kidman subsidiaries. The matter is currently with the Minister for Mines and Petroleum. Argonaut believes the Minister will ultimately grant the exemption which should result in a rerating of the stock. However, there is no definitive timeline on the Ministers pending decision. Argonaut downgrades KDR to a SPEC BUY from BUY pending an outcome on the minimum expenditure obligation claims.

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Latest News

Argonaut is pleased to announce the successful $12.5 million Initial Public Offering (“IPO”) on the ASX of Stealth Global Holdings Ltd (“Stealth” or “the Company”). Stealth is a fast-growing sales and distribution group supplying safety, industrial, workplace and healthcare consumable products and customised supply solutions to business customers across the resources, engineering, transport and general industrial sectors.

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