In today’s daily we have covered stock research on Gryphon Minerals (BUY).









 
The S&P 500 was up by 31.07points or 1.53%on Thursday to 2056.97 points. U.S. stocks jumped more than 1 percent for a second day in afternoon trading on Thursday, lifted by expectations the U.S. economy will continue to accelerate and the European Central Bank will take more aggressive action. Stocks on Wednesday snapped a five-day losing streak after strong private sector jobs data and as minutes from the most recent Federal Reserve meeting reassured investors the bank was in no hurry to start raising interest rates.

Biotechs were among the most active shares, recording some of their biggest one-day moves on the back of strong drug study results. Advancing issues outnumbered declining ones on the NYSE by 2,382 to 645, for a 3.69-to-1 ratio; on the Nasdaq, 1,987 issues rose and 702 fell, for a 2.83-to-1 ratio. Retailers gained after reporting sales results from the holiday season. Urban Outfitters rose 3.4 percent, while the S&P retail index gained 1.1 percent.


Urban Outfitters Daily Chart (Source – Thomson Reuters)
S&P ASX 200was up by 27.9 points or 0.52 % on Thursday and closed at 5381.5 points. Monthly new building approvals have reached record highs for 15 consecutive months since the Reserve Bank of Australia dropped the official interest rate to its current record low. Commonwealth Bank of Australia added 0.3 per cent to $85.39, while Westpac Banking Corporation rose 0.4 per cent to $32.81. Australia and New Zealand Banking Group gained 0.6 per cent to $31.91, and National Australia Bank lifted 0.9 per cent to $33.72.
Telstra Corporation rose 1.2 per cent to $6.02. Among the biggest retailers Woolworths slipped 1 per cent to $29.64, while Wesfarmers, owner of Coles Supermarkets, rose 0.9 per cent to $41.81. SPI futures are up 39 points to 5388 at 6.09am AEDT. The Australian dollar is trading at US81.13¢ at 6.09am AEDT, compared with Thursday’s local close of US81.12¢. No stocks will trade ex-dividend today.

AUD Daily Chart  (Source – Thomson Reuters)
 
Top Performers on the ASX 200 were :-


 
 
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Stock of the Day - Gryphon Minerals (BUY)

Gryphon Minerals (GRY) is advancing its 3.6Moz Banfora Gold Project with low cost and high grade heap leach start-up operation. The Company has depicted an exciting exploration pipeline. GRY reported that at the end of the September 2014 quarter, GRY held ~$30 million in cash, and ~$2 million in listed investments. The Company is continuously focusing on cost management processes and is thus able to realise significant savings across the business. GRY is following the ‘de-risk, get ready & add value’ strategy and is maintaining its fundamental principle of preserving a strong cash position in difficult market conditions. As part of the project financing, the Company has a mandate for up to US$60m Senior Debt to develop Banfora Gold Project. The diligence process with Macquarie Bank Limited who have been mandated to act as sole arranger and underwriter for up to US$60 million in a senior loan facility, associated hedging and a cost overrun facility (Project Loan Facilities) for the development of the Banfora Gold Project, is reported to be advancing as planned.


Banfora Gold Project (Source – Company Reports)

As per GRY’s operational updates for the quarter ending September 2014, the Banfora Gold Project is reported to be progressing well with GRY announcing for feasibility study in August 2014 while confirming viability of a conventional 2Mtpa heap leach start-up operation as the preferred development option.


Banfora Gold Project_Feasibility Study (Source – Company Reports)

The project has so far shown robust economics, including low capital and operating costs and a high grade heap leach operation, at a base case gold price of US$1,250/oz. A healthy resilience to a lower gold price and strong upside potential in a rising gold price environment has been demonstrated. GRY is confident that the operation could be up-scaled with high heap leach throughput or via the addition of a CIL plant even at higher gold prices.

The mining operation has been reported to be simplified owing to lower cut-off grades and less selective requirements. The project has shown exceptional metallurgical extractions. Further, completion of the final heap leach test work reflected field recoveries across all deposits at Banfora expected to average 85% for oxide material; 78% for transitional; and 66% in primary/sulphide.

The Company has also been granted a mining licence (Exploitation Permit) for the Banfora Gold Project in Burkina Faso in June 2014. All regulatory approvals required for the proposed 2Mtpa mining operation utilising a heap leach process plant have been sought. Even, the Burkina Faso Government is supportive of the development of the heap leach plant. At the same time, GRY is emphasizing on environmental and social efforts through regular community consultation committee meetings and community focus groups.


Banfora Heap Leach Project Development Timeline (Source – Company Reports)

For the Banfora Gold Project, 2,693m RC drill program has been completed at newly delineated Kafina West and Ouahiri South Prospects. Further, broad zones of mineralisation have been intersected at Kafina West Prospect including 12m @ 2.04 g/t gold within a low grade envelope of 36m @ 1.14 g/t gold. High grade mineralisation is intercepted at Ouahiri South Prospect including 11m @ 3.83 g/t gold and 1m @ 123 g/t gold. These prospects are reported to be within trucking distance of the planned plant site. With regards to the Houndé Belt & Regional Burkina Faso, the exploration pipeline strategy, high precision BLEG stream sediment sampling has been completed covering +1,750km along with mapping and soil sampling. In regional West Africa, Mauritania Gold & Copper Projects have been identified as targets at the Saboussiri Project along with systematic follow-up underway at Akjoujt Project to define copper targets. The Company is also conducting initial low cost geological studies and targeting over prospective ground in Côte d’Ivoire. During the period an option agreement, with the option to enter into an earn in JV with a private company, Dune S.A.R.L, was signed covering two exploration licences immediately north west of the Odienne permit and in the east of the country near the border with Ghana.

Early 2014, GRY and Boss Resources signed a binding heads of agreement for a JV over the Golden Hill, Gourma and Tenkodogo gold projects located in Burkina Faso. GRY is using low cost exploration techniques to build on the previous work undertaken at the Projects, to identify and prioritise targets ready for drill testing. GRY has done detailed BLEG stream sampling and selective lateritic lag sampling in areas deemed appropriate for the Gourma Gold Project. Tenkodogo Gold Project updates also entail completion of high precision BLEG drainage sampling at a high density.
 

Golden Hill Project (Source – Company Reports)

The Company has also recently advised about the reported unrest in Burkina Faso’s capital, Ouagadougou; nonetheless, the exploration activities continued normally with regards to the Banfora Gold Project located ~500 kilometres from Ouagadougou. The political uncertainty seems to be settled at the moment.


GRY Daily Chart (Source - Thomson Reuters)

We do note little turbulent market conditions which many believe leading to a delay of a development decision and other activities for Banfora. However, GRY’s strong financial position and internal efforts in operations, and probable improvement in gold price, may help the Company reap high benefits. Accordingly, we put a BUY recommendation for this stock at the current price of $0.069.
 

 
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