Saracen Mineral Holdings Limited (ASX: SAR)

Strong Production Results - Saracen Mineral Holdings Limited is an exploration company engaged in the business of gold mining and mineral exploration. The Group released itsFY18 production report with an outstanding growth and exploration success with a strong June quarter. Production for the June quarter was 78,930oz at steady AISC of A$1,196/oz and Gold sales were recorded at 82,206oz for June Quarter with an underpinned revenue of $136.1 million, allowing cash and equivalents to grow to A$118 million at quarter-end, compared to A$101 million at March 31. The Group further, revised its production guidance for FY19 and expects that production will be in the range of 325-345,000oz (previously 300,000oz) at an AISC of A$1,050 - 1,100/oz. The Group announced thick high-grade extensional drill results from Carosue Dam (Karari and Whirling Dervish). Both deposits remain open along strike and at depth. Moreover, drilling is underway from the newly installed northern drill drive, enabling the targeting of extensions up to ~900m below the surface (~10 year life) and a new southern drill drive will be imminently available. The stock price went up by 3.90 per cent as on 18 July 2018. We give a “Hold” recommendation at the current market price of $2.13 as the Group generated a record production last financial year and is forecasting further growth in the coming year.


Trend of Cash, bullion and investments, and closing ore stockpile (Source: Company Reports)
 

Northern Star Resources Limited (ASX:NST)

Exceptional Production Results - Northern Star Resources is a gold production company which owns and operates the Paulsens, Plutonic and East Kundana gold mines in Western Australia. The Group announced that its underlying free cashflow tripled to a record A$93 million in the June quarter which further demonstrated that its highly successful organic growth strategy is generating outstanding financial returns. It also reflected that the Group is able to meet its targeted production run rate of 600,000oz a year. It also took production for FY2018 to 575,121oz, which exceeded the top end of the Company’s guidance of 540,000-560,000oz for the year and the Group released its FY19 Guidance which is in the range of 600,000-640,000oz at an AISC of A$1,025-1,125/oz (US$758- 832/oz). The Group has an undrawn debt facility with a self-arranged syndicate of Australian and International Banks and the Company has already allocated $134 million in the FY19 budget for exploration and expansion. NST’s allocation of capital has been sector leading and the business model has allowed NST to deliver on all fronts and this has led to deliver the sector with the leading returns for its Shareholders. The stock is trading very close to its 52-week high price that is $7.37 and looks “Expensive” at the current market price of $7.15. Despite the decent update, the stock edged down on July 18, 2018.

 
Total of surface gold Inventory Trend (Source: Company Reports)

 
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