Independence Group NL

IGO Details

Joint Venture with Rumble: Independence Group NL (ASX: IGO) reported that Rumble made a Joint Venture Agreement with the group on Rumble's highly prospective Fraser Range Projects in Western Australia. The group is said to have the right to earn 70% equity in Rumble's 100% owned Fraser Range tenements while Rumble intends to leverage the group’s expertise which is the dominant regional player in the Fraser Range. 

Rumble’s Fraser Range Projects (Source: Company reports)
 
On the Lake Mackay JV Project, the group provided assay results from the first diamond hole drilled at the Grapple Prospect with several conductive responses associated with the mineralisation intersected in drilling. IGO stock delivered over 16.2% in the last three months (as of October 03, 2017), and has been up 4% on October 04, 2017; and we believe the positive momentum will continue. We give a “Buy” recommendation on the stock at the current price of $ 3.80


IGO Daily Chart (Source: Thomson Reuters)

Syrah Resources Ltd

SYR Details

Copper Strike grabs shares under retail entitlement offer: Syrah Resources Ltd (ASX: SYR) reported that Copper Strike has grabbed the entire retail entitlement of 1,047,619 new shares and has entered into a loan agreement with the group. This take-up is associated with an initial advance of $3.55 million. Copper Strike believes that the stock has considerable upside potential, and accordingly invested in the group. SYR stock plunged 3% post the announcement. On the other hand, the group’s Balama Graphite Project is on track for first production in late October 2017 and SYR has delivered their first ore through primary crushing circuit during September 2017. They forecast the overall project development capital cost of US$205m, and have finalized the negotiation of a Mining Agreement with the Ministry of Mineral Resources and Energy in Mozambique.

Graphite reserves across the industry (Source: Company reports)

As per the Battery Anode Material update, the group has planned milling and purification capacity of 10kt per annum and expects the production of Battery Anode Material (BAM) during 2018. The group is forecasting a commercial scale production and sales of BAM and other value-added products in second half of 2018. We give a “Hold” recommendation on the stock at the current price of $ 3.51


SYR Daily Chart (Source: Thomson Reuters)

Western Areas Ltd

WSA Details

Positive outlook: Western Areas Ltd (ASX: WSA) reported a better start in FY18 with the August 2017 nickel price averaging to US$4.75/lb as compared to over US$3.90/lb in June 2017. Improving demand in the high end stainless steel market, especially in China, could be a driver as the electric vehicle (EV) battery market is growing exponentially. The group saw the EV supply chain demand as they are getting more enquiries for nickel offtake supply. WSA has also signed better offtake contract terms with BHP Nickel West and won a new customer, Tsingshan Group for three years. They are on track to commission the new Mill Recovery Enhancement Project in the March 2018 quarter. WSA stock rallied over 30% in the last three months (as of October 03, 2017) and we believe this positive momentum would continue. We give a “Buy” on the stock at the current price of $ 2.92


WSA Daily Chart (Source: Thomson Reuters)

Beach Energy Ltd

BPT Details

Capital raising:Beach Energy Ltd (ASX: BPT) recently reported that two development wells, Merrimelia?65 and Merrimelia?66 in their oil appraisal and development in the Merrimelia Field, South Australian Oil were cased and suspended as future producers. The group has also finished Queensland Gas development campaign in the Roti Field with both wells cased and suspended as future producers. In Western Flank Oil, Beach continued with the FY18 operated Birkhead oil exploration and appraisal campaign. On the other hand, the group has successfully completed the institutional component of its 3 for 14 accelerated non-renounceable pro-rata entitlement offers of new FPO shares in the company. The group raised $201m of the total $301m to be raised under the Entitlement Offer. The capital raising is said to be directed to the company’s acquisition of all the shares of Lattice Energy for $1,585 million and this move has been said to increase its 2P reserves by around 200% to 232 million barrels of oil equivalent (MMboe). Further, production guidance for FY18 is said to get a boost of about 150% to 25-27 MMboe. The shares of BPT rallied over 40.1% in the last four weeks (as of October 03, 2017) but still trading at a reasonable price to earnings level. We give a “Buy” on the stock at the current price of $ 0.84


BPT Daily Chart (Source: Thomson Reuters)

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