Saracen Mineral Holdings Limited

Strong quarterly performance: Saracen Mineral Holdings Limited (ASX: SAR) is into gold mining. The key assets of the company include Carosue Dam Operation and Thunderbox Operation with long lives and extensive growth potential. Thunderbox is turning out to be one of Australia’s larger and productive underground mines. The company reported a strong December quarter result. 
Cash Position (Sources: Company Reports)

Gold sales for the quarter stood at 85,049oz and it garnered top-line of A$146.6m. As at 31 December 2018, Cash and equivalents stood at A$142.6m, increased from A$131.0m in the previous quarter even though the company spent A$55.3m on growth capital and exploration. The company’s ROE increased significantly by 12.2% and stood at 22.4% in FY18 as compared to 10.2% in FY17 and current ratio increased significantly from 1.55x to 3.10x in FY18 as compared the prior year. The operating margin and the net margin stood at 22.1% and 14.8% in FY18, a Y-O-Y growth of 14.3% and 8.1%, respectively. The company reported impressive exploration results, including two new discoveries close to the Carosue Dam mill.

Capital Development Might Rise Moving Forward: The company has decided to increase the FY19 capital development. The company expects to peak the exploration and development capital expenditure in the March quarter.
Stock Recommendation: The stock is however currently trading at $2.940, with a market capitalization of $2.41 billion. It is trading at a PE multiple of 31.65x. The stock has yielded a YTD return of 1.03% and posted a significant return of 38.03% over the last six months. Therefore, based on the company’s robust performance on a quarterly basis and the stock’s performance over the last few months, we suggest to “Hold” the stock at current market price of $2.94, expecting a better performance going forward.
 

Battery Minerals Limited

Q-o-Q activities report and results on cash flow: Battery Minerals Limited (ASX: BAT) is into metal and mining and has exploration activities in East Africa. The group focuses on graphite deposits with key interests in the Montepuez Graphite and Balama Central Graphite projects.


Cash Flow from Operations (Sources: Company Reports)

Today, the company came up with its quarterly activities report and quarterly cash flow report. The company reported AUD 5.06 million cash outflow from the operations approximately for the quarter ended December 31, 2018 largely because of the payments made towards the developments and staff costs. However, it reported an outflow from the operation of AUD 29.547 million approximately on a YTD basis.

The company updated about its mining plan for the Montepuez Graphite Project. It has also completed the feasibility study on the Balama Central. Further, the company has reported cash and liquid assets of $7.2 million as at 31 December 2018. Moreover, the project funding is progressing well by the company. It has also updated about its mining plan for the Montepuez Graphite Project.

On the financial front, the company reported revenue of AUD0.08 million for the half-yearly period ended June 30, 2018, as compared to AUD0.02 million in the previous corresponding period.The net loss stood at AUD3.94 million for the half-yearly period ended June 30, 2018, as compared to AUD3.24 million in the previous corresponding period.

What to Expect from Battery Minerals Moving Forward: Battery minerals is on track to commence graphite flake concentrate production from its Montepuez graphite project, with first shipment of concentrate due in the March 2019 quarter. The company’s long-term growth strategy happens to be staged development of the Montepuez and Balama projects in the next five years and grow the production to 200,000 tonnes for graphite concentrate per annum.
 
Needle on Key Ratios: The ratios maintained a mixed trend over the past few periods. The ROE improved by 10.3% and stood at -11.70% on June 30, 2018 on the semi-annual basis. However, the current ratio decreased by 57.0% approximately period on period and stood at 10.99x on June 30, 2018. The stock is however currently trading at $0.023 with an increase of 4.5% approximately during the day’s trade. It has a market capitalization of ~$24.5 million. Based on foregoing, we maintain our “Hold” recommendation on the stock at current market price of $0.023 (up 4.545% on January 21, 2019).
 

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