Five miners that you may like to look at

 
BHP Billiton Ltd 


BHP Details
 
New operating model and recent upturn in commodity prices: BHP Billiton Ltd (ASX: BHP) recently established an operating model to widen the scope of its business in various geographical operating regions. This would help to accrue a globally recognized operating scale and expertise. In order to improve operational capability in the quarters ahead, BHP is undertaking strategic cost-cutting programs as well as strengthening the Balance Sheet for greater financial flexibility. The company is also looking to invest into one million tonne copper equivalent capacity at a total capex of USD 1.5 billion. BHP is also planning for a US$640 million oil exploration program in its three priority basins.
 
 
BHP’s performance for nine months ended in March 2016 (Source: Company Reports)
 
At the end of March 2016 quarter, the company had four major projects under development in petroleum, copper and potash with a combined budget of US$6.9 billion over the life of projects. The group also settled its Samarco event as Federal Public Prosecution Service reported proceedings against Samarco Mineração, Vale and BHP Billiton Brasil for BRL 155 billion (over US$43 billion at current exchange rates). Samarco, BHP and Vale have entered into an agreement with Federal Attorney General of Brazil and certain public authorities for the restoration of environment and communities affected. The recovery in oil and iron ore prices helped boosting investor sentiments, which resulted into 5.44% improvement in prices over last one month (as of June 10, 2016). We maintain our” Buy” recommendation on this dividend yield stock at the current price of $18.80
 

BHP Daily Chart (Source: Thomson Reuters)
 
Fortescue Metals Group Ltd


FMG Details
 
Sustained focus on productivity and efficiency improvement: Fortescue Metals Group Ltd (ASX: FMG) reported that Pilbara Marine Pty Ltd, a wholly owned subsidiary, has won the tender for the second towage license at the Port of Port Hedland. Accordingly, Pilbara Marine will construct marine and landside supplier of tug services for all users at the port, improving efficiencies. For the March quarter, the Group reported a shipment of 43.4 million tonne of iron ore with cash production costs (C1) of US$14.79 per wet metric tonne, a reduction of 6% over December quarter and 43% over corresponding quarter. This resulted into strong operating cash flows for the quarter increasing cash balance to US$2.5 billion and lowering of debt to US$5.9 billion.
 

Third quarter performance (Source: Company Reports)
 
The company is repaying US$1,227 million term loan out of cash, which will result in interest saving of US$76 million per annum. The cost reduction focus and also repayment of debt is strengthening the company’s financial position. Fortescue also lately announced for US$650m repayment of 2019 Term Loan. Based on the foregoing, we give a “Hold” on the stock at the current market price of $3.22
 

FMG Daily Chart (Source: Thomson Reuters)
 
OZ Minerals Ltd


OZL Details
 
Strong prospects: OZ Minerals Ltd (ASX: OZL) recently reported that they made a principle agreement to settle the class action with Mr Mitic. On the other side, recently the first phase of the group’s joint venture drilling is underway at Eloise, Cloncurry as the testings have indicated high chargeability IP anomalies at Bullwinkle and Olympus while targets have not been previously drilled.
 

Cloncurry drilling (Source: Company reports)
 
Meanwhile, the drilling is underway at various discovery sites and results are expected soon. The company is building $975 million Carrapateena project out of its own cash flow and expects copper production by 2019. Accordingly, the stock has generated 34.14% of returns over a period of last six months (as on June 10, 2016) and still trading at a reasonable P/E with a decent dividend yield. We recommend a “Hold” on the stock at the current market price of $5.54
 

OZL Daily Chart (Source: Thomson Reuters)
 
Independence Group NL


IGO Details
 
Substantial improvement in EBITDA: Independence Group NL (ASX: IGO) has a cash balance of $40.8 million and debt of $240 million at the March 2016 quarter end. The company has reported underlying EBITDA of $28.7 million and unaudited profit after tax of $2.8 million as against loss of $28.1 million in December quarter. For FY16, the company guided that its Tropicana project would deliver 129,000 to 141,000 oz at cash cost of $680 to $750 /oz Au. On its Nova project, the development cost spent was $240 million till March 2016 out of $443 million and greenfield exploration is planned at a cost of $6 - $8 million. IGO recently executed its option for the Lake Mackay Exploration Agreement (Exploration Agreement) and would pay ABM Resources a cash amount of $1 million or subscribe for ordinary shares in ABM to the value of $1.5 million. The company also lately announced for the resignation of Dr. Mark Bennet as the non-executive director from IGO’s board.
 

IGO third quarter performance (Source: Company Reports)
 
With regards to IGO’s initial substantial holding for ABU, IGO paid $1.5 million while 33.9 million shares have been issued to IGO, representing over 9.0% of ABM shares on issue. IGO stock is up trending and rallied by 8.28% in the last five days alone (as of June 10, 2016). We recommend a “Buy” at the current market price of $3.27
 

IGO Daily Chart (Source: Thomson Reuters)
 
Mustang Resources Ltd


MUS Details
 
Positioning as ruby producer: Mustang Resources Ltd (ASX: MUS) is exploring a ruby project at Montepuez Ruby in Mozambique. The company has completed the initial fieldwork and agreement with Montepuez Mineral, and also the fieldwork and data analysis to select the target zones. The company is expecting a sale of ruby by December 2016, based on its sample results while the current global ruby market is of US$2 billion (2014) and prices are continuously rising. The success of sample testing would position the company as ruby producer in near term enhancing the value of its business. The group is boosting its capital position via issuing a share purchase plan (SPP) for shareholders of up to 12.5 million shares at an issue price of $0.04 per share, to raise $500,000 (before costs). The group also indicated that they might raise more $1.37 million in case of oversubscriptions of up to a further 34.26 million shares at an issue price of $0.04 per share. The stock recovered by 7.5% (as of June 10, 2016)in last five days and we give a "Speculative Buy" at the current price of  $0.043
               

MUS Daily Chart (Source: Thomson Reuters)

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