Seven Gold Stocks

Newcrest Mining Limited


NCM Details

Outstanding production despite hurdles from Indonesia: Newcrest Mining Limited (ASX: NCM) reported a solid gold and copper production for the third quarter of 2016 even though the disruptions are ongoing from Gosowong Indonesian operation, driven by its Cadia mine volumes in eastern Australia. NCM reported a gold output increase by 2.6% yoy to 637koz while the Copper production enhanced by 30% yoy to 22,924 metric tons. NCM maintained their 2.4 million-2.6 million ounces of gold production for the fiscal year of 2016. The group is also controlling its fiscal year of 2016 Capex and estimates US$440 million to US$540 million. The group continues to evaluate their options at Hidden Valley. NCM rallied over 32.06% (as of April 28, 2016) in the last three months while we maintain our “Hold” on the stock at the current price of $18.97
 

NCM Daily Chart (Source: Thomson Reuters)
 
OceanaGold Corporation


OGC Details

Strategic investments to boost gold assets: OceanaGold Corporation (ASX: OGC) has entered into an agreement for investing over 19.9% in NuLegacy Gold Corporation via private placement by purchasing 47.66 million common shares of NuLegacy at a price of $0.14 per share and get gross proceeds of $6.67 million. With this move, the group is enhancing its exposure to quality gold projects. The company even got a five year extension to the exploration period of its Financial or Technical Assistance Agreement in the Philippines to cover over 158 km located in the provinces of Nueva Vizcaya and Quirino.
 

Q1 2016 Results (Source: Company Reports)
 
Accordingly the stock rallied over 44.89% in the last three months (as of April 28, 2016) placing them at higher levels.  Hence, we give an “Expensive” recommendation on the stock at the current price of $4.36
 

OGC Daily Chart (Source: Thomson Reuters)
 
Beadell Resources Ltd


BDR Details

Solid gold production: Beadell Resources Ltd (ASX: BDR) reported a Gold Production of 32,074 ounces for the March quarter, which is an increase by 4% against the prior corresponding period. The group was able to control cash costs by 22% to US$721 per ounce while All-in Sustaining Costs fell by 16% yoy to US$902 per ounce. Meanwhile, the group’s March quarter mine plan has been delivering better than the overall 2016 mine plan with the overall material moved 32% more against the March 2015 quarter. BDR also boosted its capital position during the quarter and is seeking to raise over $50 million via the placement of 256.4 million fully paid ordinary shares in two tranches to investors.
 

March quarter performance (Source: Company Reports)
 
Meanwhile, BDR also got positive results from Tap AB1 Trough Lode comprising 33 m @ 31.82 g/t from 64 m to the bottom of hole. Urucum Underground Pre-Feasibility Study was also positive given the favorable results of the deep core drilling program finished at Urucum North in 2015. BDR rallied over 96.77% in the last three months (as of April 27, 2016) and we believe the rally to continue even in the coming months. Accordingly, we give a “Speculative Buy” on the stock at the current price of $0.31
 

BDR Daily Chart (Source: Thomson Reuters)
 
Regis Resources Limited


RRL Details

Solid cash position: Regis Resources Limited (ASX: RRL) enhanced its cash and bullion to $106.7 million as at March 2016 against the $98.5 million in the pcp after the payment of dividends of $20 million and purchase of listed equity investments of $1.4 million during the quarter. RRL also made a commodity swap transaction to partially hedge future fluctuations in the AUD diesel price for the operating requirements of the Duketon Gold Project. The continued high grade results obtained during drilling at Tooheys Well point would increase the potential for significant new satellite project for the nearby processing facility. On the other hand, RRL stock surged over 25.45% (as of April 28, 2016) in the last six months placing the stock at unreasonable valuations. Therefore, we give an “Expensive” recommendation on the stock at the current price of $2.90
 

RRL Daily Chart (Source: Thomson Reuters)
 
Evolution Mining Ltd


EVN Details

Solid resource base: Evolution Mining Limited’s (ASX: EVN) Ore Reserves has increased by 12% from 5.20 million ounces to 5.85 million ounces post considering depletion of 979,000 ounces. There was 10% rise in Group Mineral Resources from 12.74 million ounces to 14.01 million ounces as of December 2015 after accounting for depletion of 979,000 ounces. The Group has a solid cash balance of $35.3 million while the overall debt fell to $400 million consisting of $130.0 million in the Senior Secured Syndicated Revolver Facility and $270.0 million in the Senior Secured Syndicated Term Facility.
 

Ore reserves as of 2015 (Source: Company Reports)
 
EVN guided an attributable gold production from all seven operating assets of 770,000 – 820,000 ounces at an AISC of A$970 – A$1,020 per ounce for fiscal year of 2016. These positive factors drove the stock by 25.93% (as of April 28, 2016) in the last four weeks leading the stock at high P/E. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $1.96
 

EVN Daily Chart (Source: Thomson Reuters)
 
Troy Resources Ltd


TRY Details

Divesting non-core assets: Troy Resources Limited (ASX: TRY) reached an agreement to sell its interest in the Casposo gold and silver project in Argentina (Casposo) to Austral Gold Limited (ASX: AGD) for US$1 million and an additional 19% for US$1 million in one year with an option to acquire the remaining 30% over 5 years. Meanwhile, the March quarterly report indicated Karouni gold production of 20,195oz at a cash cost of US$412/oz and continued positive reconciliation with Ore reserve model. TRY surged over 154.35% (as of April 28, 2016) in the last three months partly driven by their commercial production at its Guyana-based Karouni gold project required for long term sustainable production. This strong rally placed TRY at higher levels and hence we give an “Expensive” recommendation on the stock at the current price of $0.635
 

TRY Daily Chart (Source: Thomson Reuters)
 
Gold Road Resources Ltd


GOR Details

Boosting capital position: Gold Road Resources Ltd (ASX: GOR) strengthened its capital position and raised $56.6 million through institutional entitlement offer and placement at $0.44 per new share. Post completion, this will leave the company with $103 million on hand to complete the feasibility study, commence early works and FEED for the Gruyere open pit drilling and regional exploration programs.
 

Yamarna Belt (Source: Company Reports)
 
Meanwhile, GOR also finished the latest Reverse Circulation (RC) drilling program at the Smokebush Dolerite gold prospect. This has resulted in identification of variable sheared structures and gold mineralization in a shear zone in one hole. GOR even made a joint venture with successful international mining company Sumitomo Metal Mining Oceania to the extent of 50% share in the South Yamarna Joint Venture (SYJV).  The company has completed the Gruyere Mineral Resource estimate in accordance with the 2012 JORC Code.  We recommend a “Buy” on the stock at the current price of $0.495
 

GOR Daily Chart (Source: Thomson Reuters)

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