South32 Limited
Raised full-year production forecast for South African Manganese operations:South32 Limited (ASX: S32) stock fell by about 1.5 percent on January 17, 2018 with weakening of commodity prices and a mixed 2Q18 result. Particularly, the company gave the update for December 2017 quarter and posted a 43% fall in the metallurgical coal output, due to an outage at its Appin mine in Australia. The production of coal fell to 788,000 tonnes in the December quarter from 1.39 million tonnes a year earlier, however it was still up 60 percent on the previous quarter. In the December quarter, the manganese ore output increased 21.8 percent from a year ago. The zinc production fell 62.3 percent over the period while the nickel output increased 12.2 percent. On the other hand, S32 has raised its full-year production forecast for its South African Manganese operations by 8% due to strong market demand and a record December quarter performance. The production guidance for all other operations remained unchanged. South Africa Aluminium is on track to increase production in FY18, despite an electric arc incident that impacted 36 pots in November 2017. Overall, S32 stock has risen 22.84 percent in three months as on January 16, 2018 and is trading at a reasonable level. Given the prevailing volatility, we put a “Hold” recommendation on the stock at the current price of $3.92
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Production Summary (Source: Company Reports)
Oz Minerals Limited
Lifted 2018 and 2019 copper production guidance:While most of the metal and mining stocks slipped to low levels at the back of weakening commodity prices, OZ Minerals Limited (ASX: OZL) stock edged slightly up with the release of its fourth quarter production update. In 2017, OZL has achieved copper guidance and could beat its guidance for gold, which is up 34 percent on prior quarter. Moreover, OZL has upgraded the Prominent Hill copper production by a total of 15,000 tonnes over 2018 and 2019. However, the guidance for 2019 gold production has been lowered by approximately 20,000 ounces, as the company is prioritizing higher margin copper. Meanwhile, OZL stock has risen 11.14% in three months as on January 16, 2018 and is trading at a slightly high level. We believe that the stock is “Expensive” at the current price of $9.17, and is worth a watch for any dip in view of an appropriate investment opportunity.
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Fourth Quarter Production (Source: Company Reports)
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