Latest Research

Saracen Mineral Holdings (SAR) - December Quarter Production

Saracen Mineral Holdings LogoSaracen (SAR) released December Q results with group production of 78koz, down 4% QoQ, at all-in sustaining costs (AISC) of A$1,176/oz (vs Sept Q AISC $1,008/oz). 1H production of 158koz is tracking well above the 300koz guidance for FY18. Cash increased to $82.9M (from $60.5m). We expect the 2HFY18 will be equally positive with high grade ores from Kailis and productivity improvements at Carosue Dam. Exploration continues to highlight the potential for mine life extension ahead of the upcoming 5-year plan. Despite the positives Argonaut continues to believe the stock is trading ahead of our risk weighted DCF valuation. We retain our preference for producers on significantly cheaper metrics such as Ramelius Resources (RMS, Not rated) and emerging producers such as Dacian Gold (DCN). We maintain our SELL recommendation and a revised $1.46 target price (prior $1.50).

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Argonaut Small Caps - Interim Reviews

Argonaut LogoSmall caps (ex-mining services) under coverage have performed well in recent months and are up 28% on average since 30 June 2017. Over this period GCS has fared the best (up 48%), TOX is up 43% following the bid from CWY in December, and CLX is up 40%. Exposure to the east coast and infrastructure has helped the share prices of DCG and SXE climb by more than 30%. PGC is up 5%, and ASB is up the least (although the 1% gain masks sharp moves both ways during the period).

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Threat Protect (TPS) - Executing

Threat Protect LogoThe latest two acquisitions from the existing monitoring client base means TPS has converted close on 3,000 reseller lines to direct lines so far this half. Boosting revenue, with little associated cost impact, adds to the good run-rate evident in the last two quarters. We expect TPS to continue with this strategy, leveraging the underutilised control rooms and positively impacting margin. We maintain our speculative buy recommendation on a blended valuation of $0.28 (this unchanged on prior after taking into account the 1 for 7 share consolidation ratified at the recent AGM).

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Decmil (DCG) - Solar PV Project

Decmil LogoDCG’s credentials are well established in resources, growing in infrastructure, and emerging in renewables. The MOU with Maoneng, if progressed successfully to a ~$275m EPC contract for the Sunraysia Solar PV project, would go a long way to establishing DCG as a contender for significant potential work in the renewables sector, and add to the opportunities in resources and infrastructure. Buy maintained on the compelling macro.

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Paragon Care (PGC) - Strengthens Offering

Paragon Care LogoThe $8.5m acquisition of an immunohaematology business strengthens PGC’s product offering, broadens relationships, is well within balance sheet capacity, and maintains strategic impetus. Acquisitive and organic growth to date has been well managed and suggests upside risk to our forecasts. We maintain a positive view and buy call on a valuation that has been upgraded slightly to $1.15 (prior $1.12).

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