Saracen Mineral Holdings Limited 

On track to grow inventory and production: Saracen Mineral Holdings Limited’s (ASX: SAR) stock fell 1.8% on July 31, 2018 though the company delivered strong drilling results that reflected SAR is on track to grow inventory and production. SAR has commenced the Surface drilling along the Carosue Dam Corridor and its early results shows the upside along the key stratigraphic and structural trend. The company has planned a significant program in FY19.
 
At Karari, the latest drilling results showed the encouraging growth opportunity and the results include 16.2m @ 16.2g/t, 14.7m @ 10.2g/t, 19.0m @ 6.3g/t and 14.4m @ 8.3g/t. The drilling will resume in the south of the mine after the completion of the next drill platform (1916 drill drive), expected in the current September quarter 2018. Further, a deep surface hole is currently underway, which will be used for vertical seismic profiling ahead of the planned 3D seismic survey. Moreover, at Thunderbox D Zone, the drilling resulted 74.0m @ 1.6g/t and 12.0m @ 5.4g/t (amenable to open pit mining, within 60m of surface). At Kailis, the early results from Stage 2 drilling confirmed the presence of very high grades, including 9.0m @ 15.7g/t and 7.0m @ 17.1g/t. Additionally, the drilling is continuing at the Carosue Dam Corridor; and at the Omdurman prospect, the drilling is underway. Overall, SAR expects further rise in the inventory at both Carosue Dam and Thunderbox which will enable the company to continue growing production in line with SAR’s seven-year plan.
 
Furthermore, SAR has raised FY19 production guidance to 325-345,000oz at AISC A$1,050 - 1,100/oz. Meanwhile, SAR stock has risen 1.06% in three months as on July 30, 2018. Based on the foregoing, we give a “Hold” recommendation on the stock at the current price of $ 1.875.

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