Argonaut - Industrials - Could WA Buck The Trend?

April 18, 2019

The significant negative correlation in economic growth between WA and the eastern states may signal a pending recovery in the west.  However, there are more concrete reasons behind our view that 2020 will be a better year for WA, largely centred on resource and infrastructure spend.  Small cap contractors,...

Sandfire Resources (SFR) - The Autumn Years

April 18, 2019

Sandfire Resources (SFR) released March Q results with 16.1kt Cu and 10.9koz Au in concentrate at a total cash cost of US$1.08lb, (vs Argonaut’s forecast 17.4kt Cu and 9.7koz Au at US$1.06/lb). Low grade ore from the first Monty stopes were included in the blend, and this mine should...

Saracen Mineral Holdings (SAR) - Consistent Production

April 17, 2019

Saracen (SAR) produced 89.2koz gold at an all-in sustaining cost (AISC) of A$1,035/oz for the March Q, beating Argonaut’s forecast of 87.0koz @ A$1,100/oz. Group production has now averaged ~89koz for three quarters highlighting the stability of operations. Thunderbox was the standout for the Q, generating record production of...

OZ Minerals (OZL) - Soft Q1, Busy Year Ahead

April 12, 2019

OZ Minerals (OZL) released March Q results with group production of 27.74kt Cu and 34.6kt Au, down 7% and 13% respectively QoQ. Operations were impacted by a range of issues including manning, equipment availability and weather. Importantly though, issues impacting the flagship Prominent Hill mine are not expected to...

Pantoro Ltd (PNR) - Taking The Bull By The Horns - Initiation Coverage

April 11, 2019

Pantoro Ltd (PNR) is a gold producer with its flagship project near Halls Creek in the Kimberley Region of Western Australia. PNR acquired the Halls Creek Project in 2014 and poured first gold in late 2015. The project currently has a Mineral Resource of 1.5Mt at 8.3g/t Au containing...

Stanmore Coal (SMR) - Strong March Q - Cash Building

April 9, 2019

Even taking into account the lumpy earnings typical to construction-exposed contractors, financial performance this year is unusually weak. Our analysis of historic performance across the merged business suggests, even in a low case scenario, a more typical EBITDA performance comfortably ahead of current FY19 guidance. In our view...

SRG Global (SRG) - FY19 Atypical

April 9, 2019

Even taking into account the lumpy earnings typical to construction-exposed contractors, financial performance this year is unusually weak. Our analysis of historic performance across the merged business suggests, even in a low case scenario, a more typical EBITDA performance comfortably ahead of current FY19 guidance. In our view...

Dacian Gold (DCN) - Cautious Optimism Into June Q

April 9, 2019

DCN has announced a guidance downgrade for its Mt Morgans operation in Western Australia. Underground equipment availability was blamed for the poor performance. All-in sustaining costs (AISC) for the March Q are expected to be in the range of A$1,400-$1,500/oz. Equipment availability issues have been resolved and production...