Stocks’ Details
 

South32 Limited

Strengthening the Operations:South32 Limited’s (ASX: S32) stock surged 5.136 per cent on April 10, 2018 at the back of boost from commodity prices while the group updated the market about the progress on a number of transactions under ongoing buy-back event. The company intends to buy back shares with an aggregate consideration of US $441,415,399. Recently, the group has signed a deal with Inca Minerals Limited; and as per the deal, South32 is funding a geophysical survey at Inca’s Greater Riqueza zinc-silver-lead project in Peru in return for a 60 per cent earn-in on the project. On this, Inca Minerals has granted South32 an exclusive option for majority ownership of the project pending agreed terms, including an exclusive offer to match any other offer for the project that comes along. In addition to this, the group has agreed to provide $US275,000 to the AMAG-RAG geological survey over the entire Riqueza project area. After this, South32 will also acquire an additional 10% interest in Riqueza Project in return for the additional expenditure needed to complete Project pre-feasibility study. This exclusive option agreement (EOA) between Inca and South32 is an important step in the project’s progression because this synergetic deal will provide a robust, reputable and reliable path in years to come. The stock price up by 3.44 per cent in past one month as on April 09, 2018. As there is more room for upside momentum, we give a “Hold” recommendation on the stock at the current price of $ 3.480.
 

South32 to fund Inca Minerals’ Riqueza Project (Source: Company Reports)
 

Alumina Limited

Brighter Outlook: Alumina Limited’s (ASX: AWC) stock was up by 1.969 per cent on April 10, 2018 as the demand for alumina is expected to continue to grow in 2018, with smelter grade alumina production forecast to reach over 129 Mn tonnes globally that is an annual rise of 4%. The group recorded a statutory net profit after tax of $339.8 Mn for the full year to 31 December 2017 against the loss of $30.2 Mn in the prior corresponding period. There was improvement in AWAC’s net profit owing to higher realised alumina prices during 2017. The company had free cash flow of 243.3 Mn in FY17 which increased by $89.4 Mn as compared to 2016. As a result of this, the Board of Directors declared a fully franked final dividend of US9.3 cents per share, 200% higher than previous year. Recently, PERPETUAL Limited and its related corporate bodies, a substantial holder changed its holding in AWC since 22 March 18 from 213,057,448 of shares with 7.40 per cent of the voting power to 177,541,987 shares with 6.16 per cent of the voting power. On the other hand, supply and demand of Alumina will continue to grow and it will be reasonably balanced over the next few years. Based on potential to grow further on the back of rise in demand of alumina, we give a “Hold” recommendation on the stock at the current market price of $ 2.590.
 

Average Realised price increased by $93 per tonne (Source: Company Reports)
 

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