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

The S&P 500 snapped a two-week losing streak as the index climbed to another record Friday. Stocks were little changed overall in a quiet session Friday ahead of the long holiday weekend. It was the slowest trading day of the year, as measured by number of shares changing hands on major U.S. exchanges. The S&P 500 edged higher to its 20th record of the year and notched a weekly gain of 1.4%, its biggest since the end of April. The Nasdaq Composite also closed at a record. Stocks have risen on stronger-than-expected first-quarter earnings, continued signs of a steady economy and expectations that the Federal Reserve will only raise rates gradually. The Dow Jones Industrial Average edged down 2.67 points, or less than 0.1%, to 21080.28 on Friday. The S&P 500 added 0.75 points, or less than 0.1%, to 2415.82 and the Nasdaq Composite rose 4.94 points, or less than 0.1%, to 6210.19. The U.S. gold price rose strongly on Friday, jumping 0.9% to 1,266.70 US$/oz.

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Latest Research

Argonaut expects the June Q to be the turning point for Saracen Mineral Holdings (SAR). We believe the inflection point to positive cashflow has been achieved and free cash generation should increase out to FY20. Following a period of heavy investment into growth and exploration, key projects including a second decline into the Karari mine and pre-stripping of the Thunderbox A Zone are largely complete. As a result, production has lifted to the target 300kozpa run rate and AISC is forecast to decline from ~A$1,350oz in FY17 to A$950/oz in CY20. Upcoming newsflow in H2 CY17 will likely to include; positive cash in the June Q (Argonaut est. $5-10m), a significant reserve and resource upgrade across most operations, a revised group five-year plan, a bulk underground mining study at Thunderbox and further exploration success across the asset base. Argonaut upgrades SAR to BUY from HOLD with a revised target price of $1.22 (previously $1.05).

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Latest News

Argonaut has acted as Lead Manager to Botanix Pharmaceuticals Ltd (ASX: BOT) (“Botanix”) in its oversubscribed placement of A$7.4 million to new and existing institutional and sophisticated investors.

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