With market on a downtrend post last few months of heavy gains, stocks across mining and financial sectors were seen to be taking a significant dip. However, gold players are slightly bucking the trend with investors vouching for specific stocks to dodge the market scenario.
 

Saracen Mineral Holdings Ltd

SAR Details

Strong December quarter with production ahead of FY 18 guidance: Saracen Mineral Holdings Ltd (ASX: SAR) in the December quarter reported for production of 77,522 ounces, which is above the quarterly run-rate required to meet SAR’s 300,000oz production target for the FY 18 at an AISC of A$1,150/oz. The all-in sustaining costs is of A$1,176/oz for the quarter. Therefore, the six-month production of 157,795oz at an AISC of A$1091/oz is also ahead of FY18 guidance. The Gold sales for the December quarter is of 74,320oz at an average sale price of A$1,600/oz, which generated the revenue of A$118.9m, up compared to $60.5 million last quarter. The cash and equivalents at the end of December quarter is of A$82.9m, up from A$60.5m at September quarter. Moreover, during the December quarter, Carosue Dam had successfully mobilised the underground mining contractor Byrnecut at both the Karari and Deep South mines. The milling of the high-grade Kailis ore (Thunderbox) has commenced with grade in line with expectations and the company is planning for Thunderbox underground drill platform. Additionally, SAR has strong drilling results from Carosue Dam and Kailis (Thunderbox). At Whirling Dervish (Carosue Dam), which is the first underground drilling showed continuous high-grade trends extending well below the current Reserve. The results include 14.2m @ 2.4g/t, 34.0m @ 4.2g/t, 34.0m @ 4.1g/t, 7.0m @ 3.2g/t and 7.0m @ 5.3g/t. At Karari, the first hole (after a short drilling hiatus) gave an exceptional extensional result of 13.8m @ 9.1g/t, 50m north of the current Reserve. Overall, SAR has significant organic growth opportunities immediately adjacent to the Carouse Dam mill. Further, as Whirling Dervish shows early promise and Karari’s outstanding form continuing, SAR is well-positioned to continue mining at Carosue Dam for at least the next 10 years. Meanwhile, SAR stock has fallen 3.69% in three months as on February 05, 2018. We give a “Buy” recommendation on the stock at the current price of $1.425
 

SAR Daily Chart (Source: Thomson Reuters)
 

Resolute Mining Ltd

RSG Details

Reaffirmed its FY 18 guidance: Resolute Mining Ltd (ASX: RSG) has reaffirmed its FY 18 guidance and expects the gold production of 300,000oz at an AISC of A$1,280/oz (US$960/oz). The capital expenditure for growth projects at Syama Underground and Ravenswood Expansion Project is of A$162M (US$122M) and the exploration budget is of A$38M (US$29M). However, for the December quarter, the gold production is of 66,581 ounces compared to 76,168 ounces in September quarter. The first half of the FY 18 has proved challenging as the company relied on declining stockpile grades at Syama and have received lower production from Mt Wright at Ravenswood. Moreover, Syama Underground Resource has increased by 39% to 5.7Moz. Syama Underground mine is on track and Ravenswood Expansion Project is on track. The company has signed Syama Workforce Stability Agreement with Syama Workers Union in Mali to secure industrial relation environment.
 

FY18 H1 Actual and FY18 H2 Forecast (Source: Company Reports)
 
Meanwhile, RSG stock traded flat on February 06, 2018, post some initial gains. The higher grades and improved process recoveries in the second half of the FY 18 are expected to result in increased production and lower unit costs at both Ravenswood and Syama. Therefore, we give a “Buy” recommendation on the stock at the current price of $1.05
 

RSG Daily Chart (Source: Thomson Reuters)
 

Evolution Mining Ltd

EVN Details

AISC expected to be at or below the bottom end of FY 18 guidance: Evolution Mining Ltd (ASX: EVN) in FY 18, expects to witness production above the midpoint of 750,000 – 805,000 ounces of guidance range. AISC is expected to be at or below the bottom end of FY 18 guidance of A$820 – A$870 per ounce (assuming copper price remains around the levels achieved during the December 2017 half of ~A$9,000/t). Moreover, EVN in the December quarter stated that the gold output fell 14.4% to 186,488 ounces after the sale of a mine in September.
 

Consolidated production and sales summary (Source: Company Reports)
 
The cost of production, which is an all-in sustaining (AISC) is A$784 per ounce for the quarter, compared with A$900 spent per ounce a year ago. Meanwhile, EVN stock has risen 17.84% in three months as on February 05, 2018 and is trading at a high level. Based on the foregoing, we give an “Expensive” recommendation on the stock at the current price of $2.83
 

EVN Daily Chart (Source: Thomson Reuters)
 

Gold Road Resources Ltd

GOR Details

Acquired 100% of South Yamarna Project: Gold Road Resources Ltd.’s (ASX: GOR) stock edged up by 0.65% on February 06, 2018 and the group has lately confirmed that its wholly?owned subsidiary, Gold Road (South Yamarna) Pty Ltd, has acquired Sumitomo Metal Mining Oceania Pty Ltd’s 50% interest in the South Yamarna Project for A$7 million in cash and certain rights of first refusal and first negotiation. This acquisition will consolidate GOR’s ownership of the majority of the Yamarna Belt, that currently hosts 6.8 million ounces of gold in resource. GOR has become the owner of 100% of the South Yamarna Project. Additionally, the company has 2018 exploration budget of A$23 million, which will be shared across North and South Yamarna. The group is also on track with regards to development of Gruyere Gold project. On the other hand, GOR stock has risen 13.97% in three months as on February 05, 2018. We give a “Hold” recommendation on the stock at the current price of $0.78
 

GOR Daily Chart (Source: Thomson Reuters)
 

Dacian Gold Ltd

DCN Details

Mt Morgans Project on track for the first gold production target of March 2018: Dacian Gold Ltd.’s (ASX: DCN) Mt Morgans project is on time and on budget and the company is very focused on meeting the first gold production target of March 2018, which is now only few weeks away. The company continues to make the transformation from developer to gold producer. Moreover, at the end of the December quarter, DCN had cash reserves of $117.3 million. Further, the projected expenditure levels for the March quarter will be high and in line with projected expenditure levels, expected to be A$69 million. Further, DCN stock has risen 28.85% in three months as on February 05, 2018. However, the stock slipped by 4% on February 06, 2018 unlike other gold players. We give a “Hold” recommendation on the stock at the current price of $2.57
 

DCN Daily Chart (Source: Thomson Reuters)
 

Perseus Mining Ltd

PRU Details
Sissingué Gold Mine is on track to start commercial gold production: Perseus Mining Ltd (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 and the first gold being poured on 26^th 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^st March 2018 with projected average annual gold production of ~70,000 ounces at ~US$628 per ounce over the full life of mine. As a result, PRU stock has risen 29.69% in three months as on February 05, 2018. Given the potential, we put a “Buy” recommendation on the stock at the current price of $0.415
 

PRU Daily Chart (Source: Thomson Reuters)

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