Latest Research

Kidman Resources (KDR) - Mt Holland Integrated Study

Kidman Resources LogoKidman 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.

read more...

Berkeley Energia (BKY) - Uranio No Si

Berkeley Energia LogoThe title of this report is a graffiti quote on an old building near Berkeley Energia’s (BKY) Retortillo uranium mine development site. Translated, the graffiti says, “uranium no”, which is crossed out to say “uranium yes”. This reflects the conjecture weighing on the mine’s final permitting. The actions of the local community to ward off mainly non-residents in a recent anti-mine protest shows the local support. Similarly, a public statement by the Regional Castilla y León Government yesterday urging the Central Government’s approval for the project, highlights the provincial support. This statement was in response to media reports containing an anonymous government source stating, “The [Central Sanchez] government will wait for the ongoing proceedings to go through but it will say no [to the required permits],” This media quote remains unsubstantiated, but has caused BKY shares to tumble 45% this week. If BKY is successful in attaining the remaining permits, we expect a significant share price re-rating.

read more...

Ausdrill (ASL) - On Track

Ausdrill Limited LogoASL has confirmed its expectation for standalone profit growth of 20-30% in FY19, and remains upbeat on growth opportunities. We expect the Barminco acquisition to proceed and deliver significant benefits for the combined entity. The FY19 accounts are likely to be complicated, and we provide forecasts on a reported and adjusted basis to aid analysis. We maintain our positive stance and BUY call on a $2.40 blended valuation (prior $2.45).

read more...

Otto Energy Limited (OEL) - Drilling Update: A Two Well Disappointment

Otto Energy Limited LogoOEL’s two wells that have just completed drilling have both failed to achieve a positive outcome. We have written down our valuation of the Bivouac Peak project to zero thereby reducing our OEL price target. However, the short-term weakness in the share price presents a buying opportunity as OEL is well protected on the downside by its free cash flow and large drilling program. We maintain our Buy recommendation on OEL but with a reduced-price target of $0.10.

read more...

Decmil Limited (DCG) - Awarded Sunraysia EPC Contract

Decmil LogoFinancial close on the 255MW Sunraysia solar farm has paved the way for finalisation of the $277m EPC contract with DCG to build one of the largest solar farms in Australia.
This has been well flagged, although not in our numbers to date due to financial and timing uncertainty. It is a large project for DCG, and we expect the market to focus initially on solar farm EPC risk more than the reward.

read more...