Company Overview: Resolute Mining Limited (ASX: RSG) is an Australia-based gold mining business, which is engaged in exploring, developing, and operating gold mines. The company holds interest in two producing gold mines: the Mako Gold Mine in Senegal (Mako) and he Syama Gold Mine in Mile (Syama). NRW Holdings Limited (ASX: NWH) is involved in providing diversified contract services to the infrastructure and resources sectors in Australia. The three operating segments of the company are - Civil, Mining, and Minerals, Energy & Technologies. Kalkine’s Market Event Report covers the Investment Summary, Event Summary, Data Insights & Analysis, Key Financial Metrics, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.
Investment Summary
Event Highlights
Data Insights and Analysis
Key Drivers versus Key Challenges
According to the Construction & Mining-related Statistics, two ASX stocks are identified to showcase the momentum.
(1) Resolute Mining Limited (ASX: RSG)
(Recommendation: ‘Speculative Buy’ at AUD 0.355, Potential Upside: Low Double-Digit)
(M-cap: AUD 777.08mn)
Company Overview: RSG is an Australia-based gold mining business, which is engaged in exploring, developing, and operating gold mines. The company holds interest in two producing gold mines: the Mako Gold Mine in Senegal (Mako) and he Syama Gold Mine in Mile (Syama).
6-month ended 30 June 2023 Financial Year (1HFY23) Financial Performance: In 1HFY23, the revenue increased by 3.7% PcP and stood at USD 329.5mn alongside gold sales of 173k ounces (1HFY23: 173.7 ounces) at an average realized price of USD 1,906/ounce (1HFY23: USD 1,824/ounce). EBITDA stood at USD 101.4mn, up by 29% PcP, largely attributed to 4% uptick in gold prices and 5% decline in operating costs on PcP basis.
Business Update: Syama North Project’s measured and indicated resources advanced by 47% to 2.72mn ounces grading 3.0g/t, following the infill Dimond and RC Drilling campaign conducted in 1HFY23.
Outlook: RSG maintained its full-year FY23 guidance of 350k ounces, owing to stable performance at the Syama Complex and Mako. Cost saving strategies are expected to culminate in 2HFY23 amid lower fuel prices. Cost guidance stood at USD 1,480/ounce, subject to adverse movements in input costs.
The stock has witnessed a decline of ~3.41% in last one month, and over the last three months, it surged by ~8.05%. The stock has a 52-week low and 52-week high of AUD 0.160 and AUD 0.530, respectively and is currently trading above the 52-week high-low average. RSG was last covered in a report dated ’16 May 2023’.
(2) NRW Holdings Limited (ASX: NWH)
(Recommendation: ‘Hold’ at AUD 2.550 Potential Upside: Low Double-Digit)
(M-cap: AUD 1.13bn, Annual Dividend Yield: 6.52%)
Company Overview: NRW Holdings Limited (ASX: NWH) is involved in providing diversified contract services to the infrastructure and resources sectors in Australia. The three operating segments of the company are - Civil, Mining, and Minerals, Energy & Technologies.
12-month ended 30 June 2023 Financial Year (FY23) Financial Performance: NWH landed on a record revenue of AUD 2.7bn, up by 11.4% YoY and record EBITDA of AUD 288.8mn, up by 10.2% YoY. The fundamentals were largely driven by favourable performance in the Mining segment. Can balance and net debt as of 30 June 2023 stood at AUD 227.6mn with cash conversion of 99% and AUD 84.3mn with gearing of 13.8% (including leases & 5.4% excluding leases), respectively.
Business Update: NWH highlighted a confidential out-of-court settlement of the civil proceedings, in the matter of Barker Inlet Power Station, was submitted by NWH’s subsidiary Primero Group Limited and Wärtsilä Australia Pty Ltd. As per the settlement agreement, Primero Group Limited is required to pay AUD 25mn.
Outlook: The near-term tender pipeline (capable of being awarded in next 12 months) stood at AUD 17.1bn. NWH’s total order book recorded as of 30 June 2023 was AUD 5.9bn with current submitted tenders of AUD 1.6bn.
The stock has witnessed a surge of ~10.93% in last 1 month, and over the last 3 months, it has plummeted by ~18.39%. The stock has a 52-week low and 52-week high of AUD 2.030 and AUD 3.150, respectively and is currently trading slightly below the 52-week high-low average. NWH was last covered in a report dated ’15 May 2023’.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.
Note 1: Past performance is neither an Indicator nor a guarantee of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 18 September 2023. The reference data in this report has been partly sourced from REFINITIV.
Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
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