Lower dollar generally sets the trend for investing in miners which can benefit from the scenario at the back of controlled cost and better margins. Given the existing economic picture, mining opportunities in prolific sectors such as lithium and copper with growth do look alluring. Amidst the macroeconomic landscape, below are 3 stocks tipped to benefit from the Aussie dollar scenario:
 

GALAXY RESOURCES LIMITED (ASX: GXY)

Boost from long term offtake contracts: Galaxy Resources that has lithium mine facilities and brine assets in Australia, Canada and Argentina, had indicated a mineral resource upgrade from the 2017 drilling campaign at the James Bay Project in Quebec, Canada. The mineral resource has been increased to 40.8 Mt @1.40% Li₂O, and remains open to the east and in the west at depths greater than minus 335m below surface. Further, the group started the drilling for infrastructure sterilization with feasibility study on track with upgrade of resources to reserves expected in H1 of 2018. GXY is also expected to benefit from long term offtake contracts executed with multiple customers throughout Asia with regards to the Mt Cattlin Project in Ravensthorpe, under which GXY agreed to sell 100% of the planned production of lithium concentrate from Mt Cattlin for 5 years beginning in 2018, and prices for 2018 have already been set by the group. Galaxy has also made some changes to its board of directors with the appointment of Ms Florencia Heredia as a non-executive director. Up 146% in last six months, we give a “Hold” on the stock at the current price of $4.03
 

James Bay Prospect (Source: Company Reports)
 

PILBARA MINERALS LIMITED (ASX: PLS)

Capitalising on demand for lithium feedstock: It’s just a month only that Pilbara had come up with numerous positive updates that included positive final results from the recently completed 2017 exploration and resource extension drilling programs at Pilgangoora Lithium-Tantalum Project in WA, demonstrating endowment of the Pilgangoora deposit and providing strong support for the ongoing Stage 2 DFS. The group intends to incorporate the results into an updated Mineral Resource estimate scheduled for completion in Q1 2018 while PLS will commence additional in-fill RC drilling in January 2018. To minimise additional capital expenditure while generating an early source of revenue and cash-flow from the Pilgangoora Project, PLS has bagged a Mine Gate Sale Agreement (MGSA) with Atlas Iron for the supply of direct shipping ore from Pilgangoora and this will enable the group to capitalise on current demand for lithium feedstock. The Off-take Agreement with Global Advanced Metals Greenbushes Pty for the sale of 100,000 pounds of contained Ta₂O₅-in-concentrates from Pilgangoora Lithium-Tantalum Project over a two-year term, is slated to have a supply target date from the second half of 2018. These are expected to help PLS continue its streak in 2018. Further, dollar scenario will help the group manage costs considering its targets set for the year. We maintain a “Hold” on the stock at the current price of $1.185
 

METALS X LIMITED (ASX: MLX)

Tracking well on growth projects: Australia’s tin and copper producer with significant nickel and cobalt resources, has enhanced ore reserves at the Nifty underground mine from <2 years to 6 years with further extension of life expected. The group now targets production run-rate of 40,000 tpa Cu at A$2.35/lb during the June 2018 Qtr. MLX also expects to benefit from its regional exploration with additional 500,000t Cu already identified at Maroochydore (85kms from Nifty). Its Renison Tin mine’s life is expanding from 7,200tpa to 8 –8,500tpa tin in concentrate at cash margin of ~A$8,000/t. With a favourable dollar value, the capital expenditure of $14m will fall in place for the mine expansion and drive the reduction in AISC. The group is also assessing high grade cobalt domains at Wingellina. The group thus relies on its ongoing expansion projects and the pipeline of additional growth opportunities, and has no debt with a good cash position. We give a “Buy” at the current price of $1.095
 
 

Land Holding for Regional Exploration (Source: Company Reports)

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