Stocks’ Details
 

Syrah Resources Limited (ASX: SYR)

Downgraded the production guidance - Syrah Resources Limited is an Australian-based industrial minerals and technology company. The Company released an update on its Balama production and confirmed that its Balama Graphite Operation has continued progress on the ramp up and optimisation throughout Q2 2018. Balama is one of its world-class assets and could generate sizeable free cash flows over the long-term. Meanwhile, itwas observed that reagent dosing and the secondary grinding circuit utilisation have improved significantly but on the same hand overall graphite recovery and production volumes remain impacted by the inconsistent performance of the flotation level sensors. Initially, the Company expected that it will be able to produce 40,000 tonnes of graphite concentrate in H1 2018 but now currently expects to produce between 32,000 and 34,000 tonnes in the first half. Further, the Company developed an alternative option for improving flotation cell level management using an engineering solution for the original sensors and it has already been indicated that improvements will be achieved. The Group continues its engagement with a broader range of Chinese and Brazilian experts to improve cell level management. The Company expects that it will be able to achieve the level of production of 160,000 tonnes for 2018 with a material improvement in floatation level sensor performance. A planned maintenance shutdown was carried out recently confirming that the performance and condition of the dryers were positive following the fines dryer repair in April. Since the start of the year the share prices were down by 40.34 per cent and the stock price slipped by 2.135 per cent on 19 June 2018 after the Group downgraded its production guidance. We give a “Hold” recommendation at the current market price of $2.75 while the group still strives to improve and optimise plant performance and will overcome this latest setback.


Floatation optimisation and Daily Production Improvement (Source: Company Reports)
 

Altura Mining Limited (ASX: AJM)

Final negotiations with Chinese offtake partners - Altura is building a leading position in the independent supply of lithium raw materials, with a world-class lithium project at Pilgangoora that is ready to set the platform and be in production in 2018. The Company provided a further update on commissioning and confirmed that it was moving closer to the first production from its 100 per cent owned flagship Altura Lithium Project. Further, the Group continued to deliver a series of significant milestones towards commissioning the wet plant. It is worth to note that despite the heavy rainfalls that impacted operations, the Group somehow managed to overcome the difficult conditions so that it can largely meet all its milestones. In addition, the Group commenced the commissioning of the flotation circuit with a first fill of collector and other reagents, completed the Ball Mill works and started the verification testing on the plant dust suppression system. The Company has been in discussions and is planning towards the building of the 2018 and 2019 shipping forecasts and is expected that these sales agreements will be completed soon. One of its offtake partners, Lionergy advised that its international shipping program should allow for it to arrange a vessel for delivery of the first concentrate to take place between July and mid-August 2018 and its recent China visit has led to a strong demand for lithium supply. While the update is positive but the fact that the Group will have to restructure its funds and will have to finance its stage 2 of its activities is raising some concerns on performance. The stock prices were up by 159.26 per cent in one year but started declining since the start of the year with lithium price volatility. The price went down by 5.71 per cent as on 19 June 2018. We give a “Hold” recommendation at the current market price of $0.33 while the Company is in discussions with other partners and is planning for fund re-structuring.
 

Comparative Revenue and EBITDA based on market pricing (Source: Company Reports)
 

Senex Energy Limited (ASX: SXY)

Partnership with a major infrastructure operator to deliver the first gas to the domestic market - Senex is an oil and gas exploration and production company focused on generating shareholder value by growing reserves and production. The Group executed agreements with major infrastructure operator Jemena to jointly work on the accelerated development of Project Atlas. Jemena owns and operates a diverse portfolio of energy and water transportation assets across the east coast of Australia. Jemena’s involvement in Project Atlas will allow it to focus its efforts and capital on the upstream, delivering gas to domestic customers from late 2019. Senex is in the process of finalising the remaining corporate and development financing in mid-2018. Jemena partnership with Senex will help Senex to build a strategic infrastructure and will be providing a long-term physical connection from this highly productive area of the Surat Basin directly into the Wallumbilla Gas Hub for the benefit of the east coast domestic gas market. Senex will pay an agreed tariff for delivery of sales gas to the domestic market over a 25-year term. The stock price climbed up by 2.38 per cent as on 19 June 2018 just after the Company announced its partnership with Jemena. We give a “Hold” recommendation at the current market price of $0.43 as the Group is bringing together all the critical elements for a successful project to deliver the first gas to the domestic market in 2019.


Production Trend (Source: Company Reports)

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