Saracen Mineral Holdings Limited (ASX: SAR)

Strong Financials:Company has recently published its quarterly activities report for the third quarter ended on September 30, 2018 on October 16, 2018. The company posted 10% growth in cash and equivalents from A$118.3 m on June 30 to A$131 m on September 30. Gold sales for the quarter posted at 86623 ounces, generating revenue of A$142m. Strong September quarter production performance was recorded at 88,940oz at an AISC of A$993/oz.

Growth Projects In pipeline: The following investment is planned for the FY19 - A$23 million Karari Fill Project is in execution phase with GR Engineering mobilized during later part of September. The project is on track and expected to have its first paste pour during the last half of the June quarter of 2019. Development of the new Thunderbox underground continued during the quarter. Two drill rigs will commence underground drilling operation very soon.

Technically,the scrip is on uptrend from September 16, with no retracement. At current Juncture the scrip is trading at the upper end of the bollinger bands with bullish candle formed on the price charts along with wick on the downside indicating rejection towards downside. No major fall is indicated with dips as fresh entry to buy the scrip. The market cap of SAR was recorded at $ 2.01 bn, price to earnings ratio (P/E) of 26.37x as on November 01. At current juncture, scrip is trading at the price levels of $2.45. Healthy financials and growth projects in pipeline along with overall bullish trend indicated by the technical charts, exhibit an investment scenario at the current levels. We maintain a “Buy” recommendation on the scrip at the current price levels of $2.45.

Gold Road Resources Limited (ASX: GOR)

An update on the construction activities as on September 30, 2018 at the Gruyere Gold project (50:50 joint venture of Gold Road Resources Limited and Gruyere Mining Company Pty Ltd) was released by the company in October 2018. The project was well on schedule for the first gold production expected  in the June 2019 quarter. 96% of the project engineering work was completed with an overall completion of 71% project construction and 57% completion of EPC construction.

Financial Highlight: The company had cash and term deposits of $114.3 million and $150 million of undrawn syndicated debt facilities as on September 30, 2018. $86.4 million was spent towards the development of Gruyere during the quarter.

Technically, the scrip made “inverted hammer” on the price charts on September 30. Levels of $0.6 plays key support level in short term. At current juncture, the scrip is trading well above the support level and near the mean deviation of the bollinger bands. Major indicators demonstrate recovery.

The market cap of GOR was recorded at $ 609.86mn. At current juncture scrip is trading at the price levels of $0.7, and we maintain a “Speculative Buy” recommendation on the scrip at the current price levels.
 
 

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