Latest Research

Metro Mining (MMI)

Metro Mining LogoSince our last note on Metro Mining (MMI), the Company has been busy and achieved key milestones through the development of its 100% owned Bauxite Hills DSO bauxite project in Cape York, Australia. MMI has secured Native Title and Land Access, delivered a Revised Positive Feasibility Study (PFS) with expanded production plan, attained a transhipment contract, submitted its Environmental Impact Statement (EIS), and via its now closed takeover offer, acquired a strategic 22% stake in its neighbour Gulf Alumina (public unlisted). Off-take agreements are continuing to progress well and a Definitive Feasibility Study (DFS) for a 4-5Mtpa production scenario is due for release shortly. MMI is targeting first bauxite production in Q3 2017. SPEC BUY maintained with a $0.22 target price.

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Vault Intelligence (VLT) - Over-Arching EHS

We initiate coverage of Vault (VLT) with a speculative buy recommendation and a valuation of $0.055. VLT is well funded to take advantage of the growing opportunity to sell its cloud-based, end-to-end Environmental Health & Safety (EHS) software into a market that is increasingly focused on governance, risk and compliance.

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Argonaut Metals & Mining - June Qtr Preview

Argonaut LogoArgonaut provides a preview for the June Q 2016. The resources rally following the Chinese New year has continued into the midyear. Gold and gold equities have been the outperformers, with gold hitting A$1,769 at June 30. Iron Ore continues to surprise, maintaining levels above US$50/dmt for the majority of the Q. In the near to medium term, Argonaut prefers zinc amongst the base metals and sees continued strength in AUD domiciled gold.

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Austal Limited (ASB) - Aftershock

Austal Limited LogoASB reported the costs of the ~US$4b LCS programme were underestimated, and thus recognition of prior profit overstated. As a result, a one off $156m WIP write-off will be recognised in FY16. ASB pulled back FY16 and FY17 earnings expectations but, importantly, indicated US ship construction margins of 5-7%. Our concern has centred on this programme, which dominates the order book, so greater margin clarity post a comprehensive review is positive. We have more confidence in our revised, albeit lower, numbers, which support a valuation of $1.50 (prior $1.70). ASB has a significant opportunity pipeline and we upgrade our recommendation to buy (prior hold).

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Paragon Care (PGC) - FY16 Earnings Update

Paragon Care LogoWith guidance for full year NPAT of $6.4-6.7m, PGC will deliver 2H16 numbers ahead of our prior forecasts. Cash flow, the weak area in the 1H numbers, was much improved in the 2H based on a closing cash position of $17m. In our view management has done a commendable job delivering strong financials while integrating large acquisitions and moving premises. We like the business model and expect PGC to become a larger integrated supplier to the healthcare industry on the back of further organic and acquisitive growth. We maintain a buy call on a valuation of $0.90 (prior $0.85).

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