Latest Research

Gold Road Resources (GOR) - Cracking The Regional Code

Gold Road Resources LogoGold Road (GOR) released its September Quarterly report with updates on the Gruyere Gold Project. Construction has commenced on the 50:50 Gruyere JV with mining set to commence within 12 months and first gold production in Q1 2019. Running in parallel GOR, is conducting an aggressive $24-26mpa exploration program on the Yamarna projects with the focus on additional mill feed for the JV or a potential new stand-alone project owned 100% by GOR. The majority of this expenditure is focussing on the North Yamarna tenements. We argue the market is not adequately valuing the exploration portfolio and that the geological understanding is now at a point that successes in regional exploration could translate to meaningful development plays either for mill feed for the JV or as standalone operations.

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Vault Intelligence (VLT) - Funding The Momentum/Ceasing Coverage

Vault Intelligence LogoThe last two quarters has seen VLT successfully execute on its new sales and business development strategy. Further, the recent $4.5m capital raise ensures these efforts can continue. Our forecasts are based on steady growth in SaaS revenue (as per Company targets), however it will be some time in FY19 before inflows exceed outflows in our view. This, together with a blended valuation of $0.033 (prior $0.035) that is close to the current share price, means a hold call remains appropriate.
We are ceasing coverage on issue of this note, as part of an industrial research re-focus.

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Sino Gas & Energy (SEH) - On The Cusp Of Full-Scale Development

Sino Gas & Energy LogoSino Gas and Energy (SEH) has provided detail on the proposed development plan for its Ordos Basin gas assets outlining staged development with Phase 1 production of 350-550MMscf/d (60-90mboe/d). This release coincides with the submission of the first Linxing (LX) ODP (Overall Development Plan) to PSC Partner CUCBM. SEH has secured up to US$100m of debt funding with Macquarie which should fund development through to positive cashflow, expected in 2020. The Company also released September Q results. Downstream issues impacted gas offtake nominations from the Sanjiaobei (SJB) Central Gathering Station (CGS), resulting is a 14% QoQ drop in production to 13MMscf/d rate. Cash and debt at 30 September were US$30.5m and US$10.0m respectively.

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MZI Resources (MZI) - Operations Lifting, Debt Pushed Back

MZI Resources LogoMZI Resources (MZI) released September Q results with 22.0kt of mineral sands production, up 77% QoQ. Total cash costs were $728/dmt, down 25% on FY17, vs the realised basket price of $735/dmt. Importantly, costs are trending down while mineral sands prices have shown a consistent QoQ increase from mid-2016. While the Company’s balance sheet remains stretched, repayment of the US$21m bridging facility to Resource Capital Fund (RCF) has been pushed out to April 2018 (previously due December 2017). At September 30, MZI had $4.8m cash. Hold recommendation maintained.

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