Argonaut congratulates Metro Mining on Capital Raising

Argonaut has been successful in the Placement of A$2.0 million (gross) for Metro Mining Limited (ASX: MMI) (“Metro Mining”) via a Placement to institutional and sophisticated investors of 25 million new ordinary shares at an issue price of A$0.08 per share with joint lead manager, GMP Securities.


Morning Notes

A sharp slump in Chinese markets piled further pressure on stocks Monday, after patchy economic data and corporate earnings spurred declines last week. China stocks suffered their sharpest drop in eight years amid concerns the government is pulling back on measures to prop up to the market. Markets slipped in the U.S. The Dow Jones Industrial Average fell 128 points, or 0.7%, to 17,441 in afternoon trading while the S&P 500 index shed 0.6% after Friday's 1.1% fall. On Monday morning, investors received readings on U.S. durable goods orders in June, which rose 3.4%, compared with analysts' estimates of a 2.7% rise. The Dallas Fed said its reading on manufacturing activity stood at -4.6 in July, denoting contracting activity.

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Latest Research

A $31.6m equity raise via a 5 for 6 entitlement issue and a $20m subordinated loan have had a marked positive impact on ANG’s balance sheet, reducing gearing to ~28% and leverage to ~3.1x. With comfort around the balance sheet, we can start to focus on the business’s operational leverage. Although an earnings recovery is proving a long, hard road, we believe ANG to be undervalued on a longer term view. With balance sheet risk reduced we upgrade to buy (prior hold) on a $0.70 valuation (prior $1.15).

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