Pantoro Limited

Paul Cmrlec, MD, accepts a permanent role with PNR: Pantoro Limited (ASX: PNR) has an engagement in the gold mining, processing and exploration at the Halls Creek project in Western Australia. In the recent update, PNR’s Managing Director, Mr. Paul Cmrlec who had a direct and indirect interest in the company, had acquired 1,500,000 options @ $0.24 with expiry 04/07/2022 and 1,500,000 options @ $0.25 with expiry 04/07/2022, under the long-term incentive plan, effective from July 4, 2019.

In the recent past, the company announced that Mr. Paul Cmrlec, MD of the company following the agreement to acquire 50% of the Norseman project, which is a province scale, world class gold project in Western Australia,has agreed to accept a permanent role with the company.Paul and fellow Executive Director Scott Huffadine have been the drivers in establishing and growing operations at Halls Creek, and recently assessing and negotiating the entry into Norseman. Paul and Scott bring many years of experience across a broad range of projects and commodities. This development is expected to help the company in delivering strong value to its shareholders over the coming years.

March’19 Quarter Key Highlights: Total production for the quarter was reported at 11,280 ounces of gold, at All-In-Sustaining cost of $1,217. The operating cash flow at the end of March’19 Quarter was reported at $7.8 Mn, and free cashflow after adjusting major capital project cost as well as exploration costs was reported at $1.9 Mn. This result can be attributed to the extensive development works underway at Wagtail South Open Pit and Wagtail North underground.
 
 

March’19 Quarter Operating Cash Flow (Source: Company Reports)

Gold Outlook: Yellow metal looks bright when there is uncertainty in the market. Present ongoing trade-war concerns and recent eruption of US-Iran war concerns have worried the global investors. Many of them are hedging their investments by buying gold, therefore from short-to-medium term scenario, gold is expected to maintain its shining luster, which can be supported by the fact that Gold futures, (CFD) rose from US$1,322.70 on June 3, 2019 to ~US$1417.7 on July 3, 2019.

Stock Recommendation: Pantoro’s share is trading slightly below the average of 52 weeks high and low levels of $0.242, with the market capitalization of ~$231.33 Mn. Its gross margin, EBITDA margin and net margin for H1FY19 stood at 3.4%, 21.6%, and 0.4%, which are lower than the industry median of 40.9%, 33.4% and 12.5% respectively. PNR’s share generated positive YTD return of 10.26%, while -31.75% return in the time span of 1 year, which indicates volatility in the stock. Hence, considering the aforesaid facts and current trading level, we put our wait and watch view on the stock at the current market price of $0.215 per share.
 

Northern Star Resources Ltd

Trading at Closer to Higher Levels:Northern Star Resources Ltd (ASX: NST) has an engagement in the exploration, development, mining and processing of gold deposits and sale of refined gold derived from the Jundee, Kundana, Kanowna Belle, Paulsens and South Kalgoorlie operations, and exploration in relation to gold deposits in Western Australia and in the Northern Territory. The company recently announced the appointment of highly experienced resource industry executives Mary Hackett and Nick Cernotta as Non-Executive Directors, effective from 1 July 2019. They both have extensive experience in the resources industry in the operational and corporate capacity, significantly boosting the company’s Board’s skill set, particularly in project management and engineering expertise.

March’19 Quarter Key Highlights: Revenue for the period was reported at $329.7 Mn as compared to $362.6 Mn in the previous quarter. The cash at bank at the end of March’19 quarter was reported at $218.8 Mn as compared to $229.8 million in December’18 quarter.


March’19 Quarter Operating Cash Flow Data (Source: Company Reports)

What to expect: Group’s FY2019 production guidance has been maintained at 850,000-900,000 ounce and All-In Sustaining Cost (AISC) guidance increased from $1,125-$1,225/oz to $1,225-$1,275/oz. Its June quarter production and AISC guidance have been estimated at 235,000-260,000oz and $1,075-$1,175/oz, respectively. The report also stated that, at Pogo, significant progress has been achieved in the March quarter, and the production is set to rise over the coming quarters as long-hole stoping is ramped up. 

Stock Recommendation: The stock is presently trading closer to its 52 weeks high level of $11.920, which increases the probability for a correction. Hence, considering the aforesaid facts and current trading level, we give an “Expensive” recommendation on the stock at the current market price of $11.750 per share (up 0.342% on July 5, 2019) and suggesting that investor should wait for better entry levels.  

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