Argonaut | The Natural Choice in Resources

Argonaut is a full service advisory, stockbroking & research and investment house with offices in Perth and Hong Kong. Argonaut is technically driven & focused on natural resource companies & businesses that service the metals, mining, energy and agri-business sectors. Argonaut has an established track record of creating significant wealth for clients.

Morning Notes

U.S. stocks declined intraday as a round of lukewarm corporate earnings reports and renewed trade tensions weighed on sentiment. The Dow Jones Industrial Average fell 96 points, or 0.4%, to 25104. The S&P 500 shed 0.2%, and the technology-heavy Nasdaq Composite dropped 0.2%. The S&P's financial sector was the weakest of the 11 sectors in the broad index, falling 1.2%. Shares of big U.S. banks had risen over much of the past week after the firms posted results that generally beat market expectations. But reports from American Express, Bank of New York Mellon and Travelers weren't received as favourably. American Express fell 2.8%, despite reporting strong card-member spending and loan growth. Bank of New York slumped 5.7% after posting weaker-than-expected revenue, and Travelers dropped 3.5% as weather-related catastrophes dented its bottom line. Shares of Wells Fargo, meanwhile, were little changed after The Wall Street Journal reported the bank is in the process of refunding tens of millions of dollars in charges added to customers' accounts without their full understanding. The US gold price was down 0.4% at 1222.3 US$/oz

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Latest Research

Evolution Mining (EVN) delivered March Q production of 202koz (+6% vs March Q 191koz) above Argonaut’s estimates of 193koz. All-in sustaining costs (AISC) of A$846/oz were 10% higher QoQ (A$768/oz in March Q). Standout performance came from the Ernest Henry (EH) asset with 24koz at a record low AISC of negative -$823/oz (including by-product credits) and generating net mine cash-flow of A$59.4m for the Q. Group operating mine cash-flow of $221m (+26% vs Mar Q $175m) and net mine cash flow of $136m (+22% vs March Q $111.4m) were higher than Argonauts forecasts as a combination of record-low costs at EH and improved production. FY18 production of 801koz came in at the upper end of 790-805koz guidance (vs Argonaut 794koz), however operating mine cash flow came in at $812m, well above our forecast as a result of significantly lower AISC which saw the full year come in at A$797/oz, -6% lower than Argonaut forecasts and well below the FY18 A$820-870/oz guidance. The stock remains in line with our valuation. HOLD recommendation maintained.

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Latest News

Argonaut Congratulates Gage Roads Brewing on the Highly Successful Acquisition of Matso's Broome Brewery and Equity Raising.  Argonaut acted as Financial Advisor to Gage Roads for the $16 million acquisition of Matso’s Broome Brewery, the iconic West Australian flavoured beer brand owned by the Peirson-Jones family. Argonaut provided key negotiation and transaction execution support and has helped deliver a strategic and highly accretive benefit to Gage Roads shareholders.

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