Sandfire Resources NL

SFR Details
 
Maintained FY2018 production guidance:Based on a diverse portfolio supported by gold and copper trends, Sandfire Resources NL (ASX: SFR) has maintained FY18 production guidance of 63-66kt Cu and 35-38koz gold at C1 US$1.00-1.05/lb. The company has successfully completed the extended plant maintenance shutdown in November 2017. The commissioning of additional concentrate thickener and filter is expected to start next quarter.
 

Production & Cost Overview (Source: Company Reports)
 
Moreover, SFR has completed the bulk earthworks and civils substantially at the new Monty development with surface infrastructure progressing on schedule. The first ore from Monty is on track to be delivered in Q2 FY2019. Additionally, the Final EIS and Record of Decision for the 78%-owned Black Butte Copper Project are currently scheduled to be issued before the end of 2018. SFR had fully exercised its subscription rights as part of rights offering completed by Tintina Resources during the December quarter and maintained its stake at 78%. The company raised C$10.8M through right issue for the next phase of permitting and pre-development of the high-grade Black Butte Copper Project in central Montana, USA. In addition, Sandfire Project’s cash on hand as at 31 December 2017 is $150.3 million (unaudited) while the group cash on hand as at 31 December 2017 is $164.4 million (unaudited). Meanwhile, SFR stock has risen 22.95% in three months as on January 29, 2018 and is peaking towards its 52-week high levels. While the potential is decent, the stock looks to be “Expensive” at the current price of $7.31
 

SFR Daily Chart (Source: Thomson Reuters)
 

Regis Resources Limited

RRL Details
 
Gold production at Duketon in 2H FY18 expected to be slightly lower than 1H:Regis Resources Limited (ASX: RRL) has achieved gold production of 92,113 ounces in the December quarter from the Duketon Gold Project compared to the September quarter production of 91,921 ounces. The production for FY18 is expected to be at the midpoint to upper end of the annual production guidance of 335,000 – 365,000 ounces and at the lower end of annual AISC guidance of $940 – $1,010 per ounce. However, the gold production at Duketon in the second half of FY18 is expected to be slightly lower than the first half production of 184,034 ounces. This is due to the fact that processed grades at Duketon Northern Operations are expected to reduce to the life of mine average of 1g/t (H1: 1.24g/t) as the Gloster pit moves beyond the higher-grade supergene zone.
 

Review of FY 18 Q2 Operations (Source: Company Reports)
 
On the other hand, RRL at the end of the December quarter, has $172.0 million in cash and bullion, which is an increase of $40.7 million for the quarter. Meanwhile, RRL stock has risen 2.75% in three months as on January 29, 2018 and fell 4.4% in last one month. However, based on the limitations on production, we give an “Expensive” recommendation on the stock at the current price of $4.06


RRL Daily Chart (Source: Thomson Reuters)
 

Evolution Mining Limited

EVN Details
 
Fall in gold output while there is improvement in AISC: Evolution Mining Limited’s (ASX: EVN) December quarter gold output fell 14.4% (quarter on quarter) to 186,488 ounces after the sale of a mine in September. However, the company expects full-year production to be in the upper range of guidance, and particularly, above the midpoint of its 750,000 – 805,000 ounces guidance range. The cost of production, which is an all-in sustaining cost (AISC) has been A$784 per ounce for the quarter, compared with A$900 spent per ounce a year ago. In addition, EVN reduced its net bank debt by 32% to A$231.5m. The group has completed drilling at White Foil (12,527m), with additional drilling undertaken at Frog’s Leg (1,042m), Premier (604m) and Emu (842m) prospects.
 

Consolidated production and sales summary (Source: Company Reports)
 
EVN stock has risen 19.48% in three months as on January 29, 2018 and is trading at a higher price to earnings level compared to its peers. The stock is already at high levels and looks “Expensive” at the current price of $2.77
 

EVN Daily Chart (Source: Thomson Reuters)
 

Fortescue Metals Group Limited

FMG Details
 
Iron ore shipments fell 4% in the December quarter: Fortescue Metals Group Limited (ASX: FMG) in the December quarter has shipped total iron ore of 40.5 million tonnes (mt), which is 4% less than the corresponding quarter last year. The group’s net debt has also risen significantly to $US3.3 billion at December 31 from $US2.63 billion at June 30, 2017 owing to steep iron ore price discounts and few purchases, and dividends and tax payments. The cash production costs (C1) were lowered to a record US$12.08 per wet metric tonne (wmt).
 

December Quarter Production Summary (Source: Company Reports)
 
The mining, processing, rail and shipping performance are maintained in line with guidance at a consistent rate of 170mt per annum with the total shipments in the first half of 84.5mt. Meanwhile, FMG stock has risen 7.38% in three months as on January 29, 2018 but edged a little lower on January 30, 2018. Given some bit of weakness, we put an “Expensive” recommendation on the stock at the current price of $5.07
 

FMG Daily Chart (Source: Thomson Reuters)
 

Newcrest Mining Limited

NCM Details
 
Production at Lihir affected in the December Quarter: Newcrest Mining Limited (ASX: NCM) in the December quarter, reported for higher gold production than the prior quarter, due to the increased production at Cadia, Lihir, Bonikro and Telfer, partially offset by a decrease in production at Gosowong. The production at Lihir was expected to be further higher but was impacted by a motor failure in one of its SAG mills, which had impacted Lihir’s ability to meet its sustainable 14mtpa annualised mill throughput target by end December 2017. This is now expected to be achieved early in the 2018 calendar year. Moreover, the guidance for FY18 remains unchanged, and the gold production in the second half of the FY 18 is expected to be higher than the first half, as Cadia East ore production ramps up and there are fewer planned shutdown events at Lihir.
 

Production and Cost Overview (Source: Company Reports)
 
Additionally, brownfields exploration activities continued in the December quarter in Telfer, Gosowong, Cadia, Lihir and Wafi-Golpu and the search for new discoveries continued with exploration activity undertaken in West Africa, Australia, PNG, Indonesia, Nevada, Argentina and Chile. Meanwhile, NCM stock has risen 3.18% in three months as on January 29, 2018 and is trading at a very high level. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $22.59
 

NCM Daily Chart (Source: Thomson Reuters)
 

Perseus Mining Limited

PRU Details
 
Highest annual gold production in CY 2017: Perseus Mining Limited (ASX: PRU) for the December quarter has produced 56,699 ounces of gold from Edikan Gold Mine in Ghana, which is 76% more than the corresponding period in 2016. In CY 2017, PRU has achieved the highest annual gold production of 208,226 ounces since the commercial production started in 2012. Moreover, the development of the Sissingué Gold Mine in Côte d’Ivoire, PRU’s second operating mine, has progressed strongly with first gold being poured on 26 January 2018. This is a month ahead of schedule and is on budget. The mine is on track to start commercial gold production on or before 31 March 2018. As a result, PRU stock has risen 40.63% in three months as on January 29, 2018 while it was down 3.3% on January 30, 2018 at the back of gold price movement. Based on the stock having more room for an upwards momentum, we give a “Buy” recommendation on the stock at the current price of $0.435
 

PRU Daily Chart (Source: Thomson Reuters)

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