Sandfire Resources NL

SFR Details

Management changes: Sandfire Resources NL (ASX: SFR) witnessed a stock price plunge of 4.8% on September 11, 2017, as it traded ex-dividend. SFR has announced that Martin Reed, who has held the position of interim Chief Operating Officer since August last year, will be stepping down from the role, however, he will continue to provide ongoing input and assistance to the Company on a consulting basis. Experienced mining executive Richard Beazley has been appointed as acting Chief Operating Officer. Mr Beazley has extensive and wide-ranging operational and management experience across the Australian mining industry. He operates his own mining consultancy company and has held a wide range of senior executive positions previously, including as Managing Director of Peak Resources, General Manager Technical Services and Corporate Development and GM Operations with Consolidated Minerals and General Manager with St Barbara and Aditya Birla Minerals.

For FY17, SFR reported a 62% increase in net profit after tax at $77.5 million (FY16: $48.0 million), led by strong sales and positive copper price adjustment gains. Revenue increased to $532.5 million from $485.8 million in FY16. On the production front, payable metal sales stood at 62,663 tonnes of payable copper and 34,333 ounces of payable gold (65,832 tonnes of payable copper and 33,302 ounces of payable gold for FY16). The stock has moved up 14.8% in the past one month while it is up 20.8% in the past one year (as at September 08, 2017). Given the sharp upward movement in the stock price and volatility in commodity prices, we maintain an “Expensive” recommendation on the stock at the current price of $ 6.13

Independence Group NL

IGO Details

Nova Operations’ official opening: Independence Group NL’s (ASX: IGO) stock slipped over 4% on September 11, 2017 at the back of commodity price movement. IGO lately announced the official opening of the Nova nickel-copper-cobalt operations. It is a key milestone and noteworthy achievement for the company as Nova reached commercial production only five years after its discovery and is expected to reach nameplate capacity twelve months earlier than expected in the bankable feasibility study.  Nova is a Company’s flagship asset with high margin, scale and a long mining life.

Nova is currently ramping up to full nameplate capacity of approximately 125,000 tonnes (t) per month. From Nova, IGO expects 23,000-27,000t of nickel, 10,000-12,000t copper and 800-1,050t cobalt contained in concentrate, at a cash cost of between A$1.90-2.50/lb in FY18. Notably, this is expected to make Nova the lowest-cost nickel mine in Australia. Currently, 100% of the high-grade nickel concentrate produced is sold to BHP Billiton Nickel West and Glencore under an offtake agreement, and 100% of the copper concentrate is sold to Trafigura Pte. Ltd under an offtake agreement. Given the ongoing progress and ramp up of Nova mining activities, we maintain a “Buy” recommendation on the stock at the current market price of $ 3.76

Pilbara Minerals Ltd

PLS Details

Remains on track for first ore on ship in Q2 2018: Pilbara Minerals Ltd (ASX: PLS) rocketed 11.5% on September 11, 2017 with the release of the latest update on Pilgangoora. In line with its expedited construction schedule, PLS is targeting commencement of shipments of spodumene concentrate in the second quarter of 2018 as its Stage 1, 2Mtpa project advances rapidly towards first production. Initial work has also already commenced on the previously foreshadowed Stage 2 expansion to 5Mtpa, given the exceptionally robust outlook for the lithium market. Site works at Pilgangoora are now well advanced with the first 60 rooms at the camp commissioned and a further 240 rooms expected to be completed by early to mid-October. NRW Pty Ltd (NRW) is well advanced with the site bulk civil earthworks package, with all the plant pads (except for the crusher pad) now ready for handover to RCR. Accordingly, PLS has awarded the open pit mining contract for the development Pilgangoora Lithium-Tantalum Project to the leading integrated mining services contractor MACA Limited (ASX: MLD) through its subsidiary MACA Mining Pty Ltd. The group has also issued a final contract to Contract Power Group for the site power station construction.

Further, in consideration of the near-term transition to ongoing operations, Pilbara has secured the appointment of highly experienced mining executive Dale Henderson in the role of Project Director to deliver the balance of the Stage 1 construction, and establish Pilbara’s operational readiness. Company remains on track to become a significant new, low-cost lithium producer by early next year and well placed to meet this near-term and future demand for raw materials for the burgeoning lithium-ion global supply chain. Given the ongoing progress and expected shipments from Pilgangoora, we maintain a “Buy” recommendation on the stock at the current market price of $ 0.48
 

Pilgangoora Process Plant Site (Source: Company Reports)

Fortescue Metals Group Ltd

FMG Details

Trading on volatility: Fortescue Metals Group Ltd (ASX: FMG) witnessed a stock price slip of about 0.68% on September 11, 2017 with ongoing negative sentiments and commodity price movements. Overall, many mining stocks faced headwinds on lower commodity prices and China’s intent to restrict coal imports. On the other hand, FMG’s FY2017 financial results were driven by higher iron ore prices during the year and FMG’s sustained focus on productivity and efficiency initiatives to further reduce costs. A full-year net profit after tax of US$2.1 billion was reported; and FMG’s net gearing was reduced to 21% at the back of an additional US$2.7 billion in debt repayment during the year and a further US$1.5 billion refinanced, extending maturities to 2022 on improved terms and conditions. The group has recently issued the changes due to vesting and lapse of its FY2017 Performance rights. The stock has been up 23.94% in last three months (as at September 08, 2017), but has been facing volatility in the past few days. We believe that the stock is “Expensive” at the current price of $ 5.81

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd do not hold positions in any of the stocks covered on the website. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.