Latest Research

Salt Lake Potash (SO4) - Encouraging Trench Pump Tests

Salt Lake Potash LogoSO4 has completed sustained pump tests on two trenches in the southern portion of Lake Wells to determine flow rates. On Argonaut calculations the lower rate is a comfortable 20% ahead of the Scoping Study assumption. With feasibility work ongoing at Lake Wells we expect considerable newsflow, and numbers to be tightened, over coming months.

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Sandfire Resources (SFR) - Debt Free, Cash Generation Increasing

Sandfire Resources LogoSandfire Resources (SFR) released a strong December Q with 18.1kt copper and 10.2koz gold in concentrate, beating Argonaut’s forecast of 16.0kt copper and 9.0koz gold. Low costs (US$0.81/lb C1), high sales volumes, rising copper prices and positive Quotational Pricing (QP) adjustments resulted in strong cashflow, with group cash increasing ~$53m Q-on-Q. Subsequently, SFR announced it will repay the $50m outstanding debt at the end of January 2017. Argonaut’s target price increases to $6.25, however we downgrade to a HOLD recommendation due to recent share price accretion (previously BUY at $5.80).

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Western Areas (WSA) - Solid December Qtr

Western Areas LogoWestern Areas (WSA) generated a strong December Q producing 5.8kt nickel in concentrate at C1 costs of $2.35/lb (before payability), beating Argonaut’s forecast of 5.4kt at $2.50/lb. WSA’s cash balance increased to $104m from $81m in the previous Q, benefiting from higher nickel prices, lower costs, higher sales and several positive one-off items. The Company is maintaining growth and development projects including the Odysseus Project Feasibility Study (due in The Mach Q 2017) and regional exploration at both Cosmos and Forrestania. We believe the development of Cosmos as a second production facility and the ongoing group Resource development puts WSA in a strong position to benefit from a nickel price recovery. In light of the recent share price weakness, Argonaut upgrades WSA to a BUY (from HOLD).

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Saracen Mineral Holdings (SAR) - Time to Deliver

Saracen Mineral Holdings LogoSaracen Holdings (SAR) released record December Q production of 66.2koz (previously released) at all-in sustaining costs (AISC) of $1,416/oz (in line with Argonaut’s forecast of 65koz at $1,350/oz. The cash balance increased by just $1.4m to $43.9m as Thunderbox stripping and exploration expenditure remained high. H2 FY17 will be a defining period for the Company as the market expects delivery on forecast higher production and lower costs. After becoming debt free in March Q 2015, SAR has added very little cash to its balance sheet, consistently ranging between $30-45m. Argonaut maintains a HOLD recommendation with a revised target price of $1.22.

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Dacian Gold (DCN) - Jupiter Rising

Dacian Gold LogoDacian Gold (DCN) has delineated two new zones of shallow mineralisation proximal to the planned Jupiter open pit. These zones were identified during the extended 722-hole reconnaissance aircore/RAB drill program aimed at testing extensions to the known open pit mineralisation. These discoveries have potential to add shallow oxide resources which could significantly improve the economics of the Mt Morgans Project. Recently, DCN also announced that construction has commenced on the project following receipt of key regulatory approvals. The Company is targeting first production in Q1 CY18.

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