Congratulations to Gold Road Resources Limited

Argonaut, acting as Sole Lead Manager and Global Bookrunner for Gold Road Resources Limited (ASX: GOR) (“Gold Road”), has been successful in the Placement of 77.3 million new ordinary shares at an issue price of A$0.30 per share to new and existing institutional and sophisticated investors. The placement to raise A$23.2 million, was strongly oversubscribed and the calibre of the participants is testimony to the quality of Gold Road’s exploration projects.


Morning Notes

U.S. stocks tumbled Wednesday to their lowest levels since mid-August, as investors retreated from riskier corners of the market amid worries about the pace of global growth. The Dow Jones Industrial Average lost 238 points, or 1.4%, to 16,805. The S&P 500 Index shed 26 points, or 1.3%, to 1,946 and the Nasdaq Composite Index declined 71 points, or 1.6%, to 4,422. The Russell 2000 small-cap index entered correction territory during Wednesday's session, as a 1.5% decline brought the index to a loss of 10% from its July high.

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Latest Research

Following significant recent share price depreciation, Argonaut upgrades Alacer (AQG:AU, ASR:CN) to BUY with a Target Price of $2.60 (was $2.57, minor adjustment to exchange rate) with a 6 months view. Against a backdrop of mediocre gold sector operational performances, the stocks offers one of the lowest cost / risk heap leach projects in the near term. Çöpler is set to benefit stronger production in the H2 due to elevated grades. A cash Reserve of ~US$292m (at 30th June) and low costs buffers short term gold price volatilities. Longer term, Argonaut remains to be convinced on the independent development of the sulphide project, given high capital intensity, slow payback and modest production profile, although first quartile costs and long life are acknowledged. Given the sulphide project is long dated, and a board development decision is not expected until early 2015, financing risk appears limited in the near term. Given mine life, low cost and potential synergy, the asset could attract the attention of acquisitive TSX mid-tier producers including Eldorado (ELD:CN) and Alamos (AGI:CN).

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