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

Stocks fell intraday ahead of a planned vote on a health-care bill that many investors say could test the viability of the Trump administration's agenda. Major indexes rose through most of the session, then erased their gains in the afternoon as prospects of a Republican plan to dismantle the Affordable Care Act appeared to dim. Many investors and analysts have said the vote will be a key test of whether President Donald Trump will be able to push through potential policy changes like tax cuts, fiscal stimulus and deregulation-hopes for which have helped stocks rally since the election. As of the afternoon, Republican lawmakers remained short of the votes needed to pass their health plan in the House of Representatives. Both major U.S. indexes finished lower for the day with the Dow Jones Industrial Average shedding 5 basis points to 20,657 whilst the S&P 500 dropped 0.1% at 2,346. The U.S. gold price also dropped, falling 0.3% to 1,244.5 US$/oz.

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Latest Research

Western Areas (WSA) generated normalised positive cashflow of $12.3m in the December Q, increasing the Company’s cash balance to $104m (no debt). Argonaut is anticipating positive cash flow once in the March Q despite an expected 10-12% drop in realised nickel prices. Geopolitical issues impacting Philippine and Indonesia nickel laterite exports to China has driven high nickel price volatility. This, coupled with WSA’s status as the only pure play nickel producer remaining on the ASX, has led to high share price volatility. WSA currently has 18% short interest versus an average of 4.5% for other mid to large cap ASX base metal producers. We believe there is high potential for WSA to rebound to the top of its 12-month trading range of $2.00/sh to $3.20/sh driven by a nickel price recovery, the near-term release of the Odysseus Pre-Feasibility Study (PFS), ongoing exploration results from the Neptune prospect and continued positive quarterly cashflow.

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Latest News

Argonaut as Co-Lead Manager has been successful in raising of A$110 million for Dacian Gold Limited (ASX: DCN) (“Dacian”) via an institutional placement and a 1 for 3.1 Accelerated Non-Renounceable Entitlement Offer for approximately 55 million new ordinary shares at an issue price of A$2.00 per share, with Macquarie Capital (Australia) Limited.

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