Iluka Resources Ltd

ILU Details
 
No dividend declared in 2016: Iluka Resources Ltd.’s (ASX: ILU) stock surged 2.7% on March 31, 2017 with commodity price movements. In FY16, the group reported that its mineral sands revenues had fallen by 11.4% to $726.3 million and there was a total reported loss of $224.0 million after tax including non-recurring adjustments of $182.8 million after tax in relation to impairment and rehabilitation provisions. The free cash flow of $47.3 million was noted to be modest.
 

Net Debt Movement (Source: Company Reports)
 
The group did not declare any final dividend for 2016 owing to investments related to Cataby and the Sierra Rutile expansion options. The gearing ratio (net debt/net debt + equity) of 31.5 per cent was owing to Sierra Rutile acquisition. On the other hand, the group contracted rutile volumes in first half 2017 were reported with prices up to 4% higher than 2016 weighted average received prices. For Zircon, Iluka partially achieved announced US$60/tonne price increase in third quarter 2016 while there was US$50/tonne price increase noted from February 15, 2017. The group is aiming for cost reductions and 2016 production adjustments have led to 10.2% lower unit cost of goods sold to $700/tonne of zircon/rutile/synthetic rule (2015: $780/tonne). ILU now expects moderate demand growth for Zircon in 2017 and 2018. ILU will hold its Annual General Meeting on Friday, April 28, 2017. The stock has risen 18.66% in last six months (as at March 30, 2017) and is nearing its 52-week high price. Given the trading scenario and prospects at the back of progression at Cataby and expansion projects for Sierra Rutile, we give a “Hold” recommendation at the current price of $ 7.62
 

ILU Daily Chart (Source: Thomson Reuters) 

Beach Energy Ltd

BPT Details
Starting conventional gas exploration in Onshore Otway Basin in South Australia: Beach Energy Ltd.’s (ASX: BPT) stock rose over 7.3% in last five days as on March 30, 2017 driven by the commodity prices. The group started preparations for drilling a conventional onshore gas exploration well in the Penola Trough, Otway Basin in South Australia. The group would also be supported by the South Australian Government via the Plan for Accelerating Exploration gas grant scheme that has an objective to get the new gas to market within three years. The group would make a bilateral negotiation with potential South Australian customers for providing gas from Haselgrove?3 at prevailing market terms, under the PACE grant. The group already recognized prospects in the Sawpit Sandstone Member beneath previously productive reservoirs. Haselgrove?3 would be drilled in PPL 62 (Beach 100%) close to their Katnook gas processing facility and pipeline network, and the SEA Gas transmission system. 

First Half FY17 Cash Sources and Uses (Source: Company Reports)
 
It is also to be noted that Beach has now withdrawn from ATP 855 in the Cooper Basin effective March 31, 2017 while Icon Energy assumed 100% of ATP 855. For H1 FY17, the group reported for a turnaround in NPAT to $103m while underlying NPAT was up 1,023%.BPT has given out FY17 production guidance of 10.3 – 10.7 MMboe. We give a “Buy” recommendation on the stock at the current price of $ 0.80


BPT Daily Chart (Source: Thomson Reuters) 

Syrah Resources Ltd

SYR Details
Positive prospects and signing of Memorandum of Understanding (MOU) with BTR New Energy Materials: Syrah Resources Ltd.’s (ASX: SYR) stock rallied 4.4% in last five days as on March 30, 2017. The group’s Balama production would be crystalline flake graphite while their processing plant would have the flexibility to meet customer requirements and respond to market demand for particular product specifications. The group is also building partnerships with major end users and major regional commodity traders. SYR has now signed a non-binding Memorandum of Understanding (MOU) with BTR New Energy Materials Inc. (BTR) in China with regards to sales and supply chain cooperation. Meanwhile, the group reported for good progress with development and construction activities for the Balama project for which process plant construction is 52% complete as at December 31, 2016. The group has scheduled for commissioning to commence during Q2 2017 and production ramp-up is said to be due in Q3 2017. We recommend a “Buy” on the stock at the current price of $ 2.83


SYR Daily Chart (Source: Thomson Reuters)

Disclaimer
 
The advice given by Kalkine Pty Ltd and provided on this website is general information only and it does not take into account your investment objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your investment objectives, financial situation and needs before acting upon it. You should seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice. Not all investments are appropriate for all people. Kalkine.com.au and associated pages are published by Kalkine Pty Ltd ABN 34 154 808 312 (Australian Financial Services License Number 425376). The information on this website has been prepared from a wide variety of sources, which Kalkine Pty Ltd, to the best of its knowledge and belief, considers accurate. You should make your own enquiries about any investments and we strongly suggest you seek advice before acting upon any recommendation. Kalkine Pty Ltd has made every effort to ensure the reliability of information contained in its newsletters and websites. All information represents our views at the date of publication and may change without notice. To the extent permitted by law, Kalkine Pty Ltd excludes all liability for any loss or damage arising from the use of this website and any information published (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine Pty Ltd hereby limits its liability, to the extent permitted by law to the resupply of services. There may be a product disclosure statement or other offer document for the securities and financial products we write about in Kalkine Reports. You should obtain a copy of the product disclosure statement or offer document before making any decision about whether to acquire the security or product. The link to our Terms & Conditions has been provided please go through them and also have a read of the Financial Services Guide. On the date of publishing this report (mentioned on the website), employees and/or associates of Kalkine Pty Ltd currently hold positions in:  BHP, BKY, KCN, PDN, and RIO. These stocks can change any time and readers of the reports should not consider these stocks as advice or recommendations.