Stanmore Coal (SMR) released strong March Q results with record saleable coal production of 691kt produced at a cost of A$82/t FOB (excl. royalties). FY19 production guidance has been upgraded from 2.15Mt to 2.30Mt as a result of minimal weather disruptions during the wet season. During the Q, The Company’s cash position increased by $9.6m to $58.4m and the $22.8m working capital facility was completely repaid. Mining from Isaac Plains East (IPE) is now in full swing and currently producing 100% coking coal with yields >80%. SMR is trading at a very undemanding EV/EBITDA multiple of 1.7x, applying the lower end of FY19 EBITDA guidance of $140-155m. BUY recommendation maintained.
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