Beadell Resources Ltd

BDR Details
 
Strong potential of Urucum Underground Mineral Resources: Beadell Resources Ltd (ASX: BDR) has an overall Urucum Underground mineral resource of 4.86 million tonnes @ 4.06 g/t gold for 634,000 ounces which is above a lower cut off of 1.6 g/t gold (as at September 17, 2015). The overall Measured and Indicated Resources reached 2.73 million tonnes @ 4.56 g/t gold for 400,000 ounces while total Inferred resources stood at 2.13 million tonnes @ 3.42 g/t gold for 234,000 ounces. The AMC Consultants pre-feasibility study for Urucum underground (estimated to be completed by this year-end) indicated ongoing presence of the high grade Central Lode 1 ore shoot confirmation, which is currently defined at around 400 meters strike length. Therefore, the group is planning a definitive feasibility study in the first quarter of 2016, after which management could decide further proceedings on Urucum underground project. Meanwhile, Tucano Gold Mine is the third major gold mine at Brazil with over 160,000 ounces per annum and has a solid LOM Open Pit Mine Plan extending for at least seven years. The group delivered a better unreconciled gold sales of over 29,383 ounces of gold during the September 2015 Quarter, as compared to the 21,045 ounces of gold in June 2015 Quarter. BDR has a cash of $28 million as of September 2015. The company has made some changes to the management and has also recently appointed Timo Jauristo to the Board of Directors whose mining experience is expected to add value.
 

Urucum Underground mineral resource update (Source: Company Reports)
 
Stock Performance: Beadell Resources stock plunged over 49.02% during this year to date (as at December 11, 2015) impacted by the gold prices pressure. On the other hand, the stock rallied over 13.04% (as of December 11, 2015) in the last three months boosted by the recovery in the gold prices, positive September quarter and pre-feasibility study for Urucum underground. Moreover, the Brazilian (BRL) gold prices (in spite of falling USD gold price) are trading at high levels as compared to the last few years further adding support to the stock. We believe that BDR stock would continue to rally in the coming months, driven by further surge in the BRL gold prices. BDR also has a strong dividend yield. Based on the foregoing, we give a “BUY” recommendation on the stock at the current price of  $0.135
 
 
BDR Daily Chart (Source: Thomson Reuters)
 

Syrah Resources Ltd

SYR Details
 
Building Clients for Balama project: Syrah Resources Ltd (ASX: SYR) stock surged over 11.50% (as of December 11, 2015) in the last three months as management reported that they are pursuing sales negotiations with several graphite traders and reaching target clients for its Balama project. SYR even received positive feedback from potential clients on its higher quality Balama spherical graphite. Consequently, the group signed a statement of sales intent agreement with a leading refractory producer which could buy up to 15,000 tonnes per annum of natural graphite for its production facilities across the world. SYR signed a three year product sales agreement with Morgan Hairong for 2,000 tpa of uncoated spherical graphite as well as a three year marketing agreement for 5,000 tpa of uncoated spherical graphite and 2,000 tpa of coated spherical graphite. The group even entered into a 20 year licensing agreement with Morgan Hairong for its proprietary spherical graphite coating technology. SYR has also won the relevant government approvals and made a three year Offtake Agreement with China Aluminum International Engineering Corporation for 80,000 tpa.
 

Production timeline for Balama Project (Source: Company Reports)
 
Meanwhile, the production from the Balama Projects is expected to commence next year end and SYR expects to ramp up the production by the first quarter of 2017 generating over 270,000 tonnes of +95% graphite during 2017. Syrah Resources planned a production of 356,000 tonnes per annum (tpa) for the first 10 years for Balama which has a proven and probable ore reserve of 81.4 Mt at an average grade of 16.2% total graphitic carbon and raised a capital of $211 million to fund the development of its Balama project. We remain bullish on SYR and reiterate our “BUY” recommendation on the stock at the current price of  $3.14
 
 
SYR Daily Chart (Source: Thomson Reuters)
 

Mineral Deposits Ltd

 

MDL Details
 
Improving production and capital position: The shares of Mineral Deposits Ltd (ASX: MDL) corrected over 56.57% (as of December 11, 2015) in the last six months on the back of commodity prices volatility. On November 27, 2015, MDL requested for its securities to be voluntarily suspended in view of a pending release of a company announcement. There have been discussions with regards to TiZir with the bondholders in view of potential amendments to the bond agreement which have been now successfully approved. Commencement of trade was expected on December 11, 2015. On the other hand, the group reported a decent third quarter of 2015 performance, with Grande Côte mineral sands operation (GCO) delivering a positive EBITDA for both August and September months. Heavy Mineral Concentrate production reached 176,028t during third quarter of 2015, which is a 29% rise as compared to the second quarter of 2015. Moreover, the group’s joint venture with ERAMET of France - TiZir Limited received over US$14.2 million from the European Free Trade Association Surveillance Authority. TiZir also received a grant from Enova, (a Norwegian government agency), which would be received in the fourth quarter of 2015 and first quarter of 2016.
 

GCO third quarter performance (Source: Company Reports)
 
Mineral Deposits also expects to finish its major development activities in TiZir during this year, which includes final commissioning of GCO and expansion project at TTI. Therefore, MDL intends to enhance its cash flow and financial returns during next year as major capex is already incurred. Based on the above, we put a “Buy” recommendation on the stock at the current price of $0.40
 
 
MDL Daily Chart (Source: Thomson Reuters)

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