Latest Research

Doray Minerals (DRM) - Impairments And Impediments

Doray Minerals LogoDoray Minerals (DRM) reported its full year result with a net loss of $35m after a non-cash impairment charge of A$46.8m on the Andy Well and Deflector assets. Revenues of $70.2m were 4% less than the previous period and were 23% less than Argonauts forecasts due to the awaited sale of the copper-gold middlings (worth up to $15m at current spot prices). Our recent site visit to Deflector confirmed the operation is running well and above nameplate throughput capacity. We believe the stock trades at a discount to its peers due to the near term re-financing of its debt facility and the ongoing high cost production issues at Andy Well. We maintain our HOLD recommendation and revise our target price to $0.38ps ($0.59 prior) pending the resolution of short term impediments including the re-negotiation of debt and the sale of the copper-gold middlings.

read more...

Orbital Corporation (OEC) - REMSAFE Needs A Spark

Orbital Corporation LogoReasonable performances from most segments were offset by a surprisingly weak result from Safety & Productivity (REMSAFE) and, although there is little change to our group FY17 forecast, we have pared back growth assumptions for this segment. Our positive view on the long term potential for OEC’s technologies is unlikely to be reflected in share price gains while near term earnings are so weak. Hold maintained.

read more...

Gascoyne Resources (GCY) - Dollars For Dalgaranga

Gascoyne Resources LogoGCY announced it has successfully completed a bookbuild to raise up to $50m at a placement price of $0.50ps and an additional $5m via a Share Purchase Plan (SPP). The funds will be applied towards the development of the Dalgaranga Gold Project as well as exploration and working capital. Argonaut sees this as the successful first de-risking step along the path to production for GCY. We believe a number of key value catalysts will occur in the short term including i) the completion of debt financing ii) a maiden resource and reserve for Gilbeys South, iii) an upgrade to the mine plan to include the updated Gilbey’s South ores and; iv) the award of Engineering, Procurement and Construction (EPC) contracts to commence construction of the project. BUY recommendation maintained and target price of A$0.86ps ($0.75 prior).

read more...

Global Construction (GCS) - Balance Sheet Strength Underpins Growth

Global Construction Services LogoGCS’s first half results were broadly in line with our forecasts, demonstrating continued performance in tough market conditions in WA. During the period, GCS also delivered on its geographical diversification strategy, acquiring a controlling stake in Gallery Facades – a company with operations focused on the East Coast. GCS maintained a disciplined approach to capital management, ending the half year with a net cash position of $14m. The balance sheet strength and Gallery Facades acquisition provide comfort around forecast future growth, and lead to an increased valuation of $0.75 (prior $0.65).

read more...

TFS Corporation (TFS) - Set For Big 2H

TFS Corporation LogoEarnings in 1H are typically a fraction of the full year number (for which TFC has reiterated cash EBITDA guidance of $78m+), with the operational update providing an indication of momentum into the 2H. Product sales are ramping up, demand for plantation investment product is strong, and the pharma business is progressing Phase II trials on 4 products and has 1 potentially entering Phase III in CY2017. Buy maintained on a $3.30 valuation.

read more...