In today’s daily we have covered stock research on OZ Minerals (Expensive).

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The S&P 500 was down 13.94 points or 0.70% on Tuesday.  U.S. stocks fell in a broad selloff on Tuesday, dropping for a second straight session as investors turned cautious before the start of the earnings season. Nine of the 10 primary S&P 500 sector indexes were lower, with only the defensive utilities group higher for the day. Twitter Inc. and Pandora Media Inc., which trade at more than 150 times earnings, plunged at least 7 percent to pace a Dow Jones gauge of Internet shares to the biggest drop since May.

Across the Atlantic, the FTSE Eurofirst 300 index fell 1.3%, while Nikkei 225 in Tokyo shed 0.4%. Trade data showed German exports falling 1.1% in May and imports dropping 3.4% the most since 2012. A broadly softer tone to the dollar which was down 0.1% against a basket of currencies did little to help gold. The metal was $5 lower at $1,314 an ounce.


Twitter Daily Chart (Source – Thomson Reuters)
 
S&P ASX 200was down by 8.0 points or 0.14% on Tuesday and closed at 5510.9 points. Crown has announced that it has been issued a restricted gaming license by NSW Liquor and Gaming authority. Euroz limited has announced a final dividend of 9 cents fully franked with an ex-dividend date of 11th July 2014. Resource Equipment Limited (RQL) has advised that the Company’s CEO Jamie Cullen has resigned. Diversified Contractor Brierty Limited (BYL) has announced that it has been awarded a $17 million contract at Perth Airport to construct the new airport drive.

National Storage REIThas announced that it has increased its debt facility by $35 million with NAB. Astro Japan Property group has announced the sale of a property from its property portfolio of 33 properties for A$6.9 million approximately. Iron ore was up 0.63 per cent at $US96.50 a tonne, according to The Steel Index. The Australian dollar is trading at US93.98¢, compared with US93.87¢ at Tuesday’s local close.




 ASX 200 Daily Chart (Source – Thomson Reuters)

The top gainers on ASX 200 were:-




Stock of the Day – OZ Minerals (OZL)

OZL has reported an update resource and initial reserve estimate for its Malu underground deposit. The hew resource increases contained copper at Prominent Hill by around 78kt or 4%. The initial reserve will support nearly seven years of production at the Malu underground design mining rates of 1.6Mtpa. These parameters are largely as we had expected.


Malu open pit face position (Source – Company Reports)

Malu underground is the depth extension of the main Prominent Hill open pit ore body. OZL is developing the Malu underground extension from existing underground infrastructure at the adjacent Ankata underground operation. The new development is expected to contribute around 4kt copper to OZL’s 2014 production guidance (75-80kt) and ramp up to 10-20kt copper from 2015-2025.
 


Malu open pit costs (Source – Company Reports)

 
The draft Carrapateena pre feasibility study is currently undergoing internal review. OZL has previously advised that several parties interested in partnering in the Carrapateena/Khamsin project have signed confidentiality agreements and engaged in presentations and site visits. OZL has a 57,000m underground drill program for the Malu underground deposit in 2014. From this program the company expects to complete a further resource/reserve update by the end of the 2014 calendar year.


OZL Daily Chart (Source – Thomson Reuters)

The delivery of the maiden reserve at Malu de-risks its development, which has been a concern to the market. Grades are in line to slightly higher than our expectations but are lower than those at the existing Ankata underground. Our cash cost estimates for CY15 and CY16 increase marginally as a result. Although it is slightly dilutive in the short term, it diversifies production risk and provides additional optionality over the long term. We believe the stock is expensive at its current price and would review the stock at a later date.

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