Latest Research

Metro Mining (MMI) - Debt Secured - Ready To Break Ground

Metro Mining LogoMetro Mining (MMI) has secured $40m debt financing through Sprott Private Resource Lending and Ingatatus AG Pty Ltd, a related party of Metro’s strategic cornerstone shareholder Balanced Property. These funds will support development of the Bauxite Hills project which is expected to commence production Q2 CY18. MMI also announced that it had attained State Environmental Approvals and final Federal Approvals are expected imminently. Project construction is on track to commence Q3 CY17. Argonaut maintains a BUY recommendation with a $0.44 target price.

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Pacific Energy (PEA) - Contract Slippage

Pacific Energy LogoA significant rain event and contract delays will impact PEA’s short-term earnings, causing us to peel back our FY17 and FY18 forecasts. However, we believe the Company has strong long-term growth potential, underpinning the investment appeal. PEA has been a stand-out performer among resource services companies and on the back of a large pipeline of opportunities we maintain our positive longer-term view. We have decreased our valuation to $0.80 (previously $0.85), but maintain our BUY call.

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Tox Free Solutions (TOX) - FY17 Guidance

Tox Free Solutions LogoTOX’s segment expectations are largely positive aside from the ongoing challenging conditions in the Pilbara. Revised guidance for underlying FY17 EBITDA of $82-83m is slightly below our prior forecast, but importantly, we believe TOX will emerge from the current financial year with a strong, diversified base off which to grow. We are not expecting large acquisitions in the near term and FY18 will provide cleaner, easier to analyse, numbers. Our $2.50 blended valuation and buy call are maintained

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Austin Engineering (ANG) - Re-Initiation

Austin Engineering LogoANG’s key selling point is its IP. It reflects the considerable R&D that has gone into product design and is the plank underpinning current strategic initiatives. When combined with an improving operating environment (where WA is leading the charge) we expect the leverage within the business to result in significantly improved earnings and returns on capital in coming years. We re-initiate with a $0.22 blended valuation and buy call.

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Gold Road Resources (GOR) - 5 Reasons To Buy Gold Road

Gold Road Resources LogoGold Road (GOR) has commenced early works for the construction of the Gruyere Gold Project (Gruyere). The stock has been largely range-bound despite the announcement of the positive Feasibility (Nov 2016), the announcement of Gold Fields (GF) 50% JV and a further 10% equity purchase by GF at 86cps. Arguably, GOR still has ~18 months until first production, but we see five reasons to buy GOR including i) construction commencing in partnership with Gold Fields, ii) the upsizing of the project to 8.5Mtpa to lift early production >300kozpa, iii) Our analysis of the peer group NAV’s suggests that GOR’s Gruyere project is similar in production, costs and mine life to EVN’s Cowal asset, yet the stock continues to trade at less than half of the value, iv) value accretion occurs in the investment sweet spot during the construction period ahead of production; and v) maintaining a significant 100% owned exploration package with an aggressive $30m spend in CY17/18. Maintain BUY with a revised target price of $1.02ps (prior $1.10ps).

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