Independence Group NL

Nova ramp up by September 2017 quarter: Independence Group NL (ASX: IGO) has signaled for a series of near term catalysts across its diversified portfolio. These include the completion of the Tropicana Long Island study and delivery of the Mineral Resource estimate, and prefeasibility for the new Triumph deposit at the Jaguar operation. Moreover, the new Nova operation is ramping up to nameplate capacity and the company expects to deliver this important milestone during the September 2017 quarter. The group also has a number of significant exploration programs starting at Nova and within the belt scale Fraser Range tenement holdings that the company had consolidated over the past 6-12 months. The group has been delivering consistent operating margins across its portfolio. For March quarter, IGO’s total revenue slipped 35% on the prior quarter owing to less zinc concentrate shipments and no copper concentrate shipment from Jaguar, while Tropicana gold sales were as per expectations. However, there was a slight increase in NPAT due to before tax mark-to-market investment revaluation gains. IGO stock is available at lucrative levels as it has fallen 29.30% in the last six months (as on May 24, 2017) and we give a “Buy” recommendation on the stock at the current price of $ 3.42

Saracen Mineral Holdings Limited

Positive outlook: Saracen Mineral Holdings Limited (ASX: SAR) had proposed for the acquisition of the Bundarra Gold Project some time back. Lately, an intended off-market takeover offer by Zeta Resources Limited gathered attention. Bligh had announced that the Directors of the Company considered that the Zeta Offer was a superior proposal to the Saracen Transaction. On the other hand, latest drilling results demonstrated the potential for extended production growth and mine life at both Carosue Dam and Thunderbox. Further, the company is on track to hit the 300kozpa production rate in the current quarter with FY18 outlook of 170koz for Carosue Dam. SAR stock has risen 8.8% in the last one month (as on May 24, 2017) whilewe give a “Buy” recommendation at the current price of $ 1.05

Gold Road Resources Limited

Gold Fields increases holding in Gold Road: Gold Road Resources Limited (ASX: GOR) has announced that Gold Fields Limited, through its wholly owned subsidiaries, has acquired 74,824,070 GOR shares at $0.86 per share (a 27% premium to GOR’s closing share price of $0.675 on May 18, 2017). After payment of the premium, Gold Fields now has a 10% relevant interest in GOR and has become a substantial shareholder. GOR’s fully funded world class development project, Gruyere, is a long life, large scale, low risk and low cost gold project. The group recently reported for improved economics and mine life of the Gruyere Gold Project through the addition of higher grade satellite mill feed. GOR stock has risen 29% in the last three months (as on May 24, 2017) and still trading at a very low level. We give a “Buy” recommendation on the stock at the current price of $ $ 0.70

Northern Star Resources Limited

Update on Clement-Paulsens Gold and Silver Project: Northern Star Resources Limited (ASX: NST) owns 20% interest in Mt Clement-Paulsens Gold and Silver Project while Artemis Resources Limited owns 80% of the project. Artemis has signed a binding joint development Memorandum of Understanding (MOU) with Blackrock Metals Pty Ltd, to immediately commence a full scoping study on Mt Clement-Paulsens gold and silver project in Western Australia. Moreover, Artemis and Blackrock will fund the costs of the study on a 50/50 basis with Blackrock managing the study process. On completion of the study, Artemis and Blackrock intend to proceed to a formal 50/50 joint venture to jointly fund and develop Mt Clement-Paulsens. On the other hand, given the recent volatility in gold prices, concerns over the group’s margins still prevail to some extent. NST expects to meet its FY2017 guidance of 485,000-515,000oz while AISC is expected to be in the range of A$1,000 to A$1,050/oz. We give an “Expensive” recommendation on the stock at the current price of $ 4.72

Newcrest Mining Limited

Update on Cadia expansion: Newcrest Mining Limited (ASX: NCM) has indicated for about 27 years of reserve life and low cost production ($751 Q1-3 FY17 ASIC per ounce) as its key attributes as a gold miner. Recently, NCM’s prefeasibility study on the proposed expansion to the Cadia processing plant has been completed and the approval of the study is pending. Therefore, it has been decided to move ahead with the permit modification process while NCM is undertaking community consultation to increase the processing and ore production permitted capacity to 35 million tonnes per annum (mtpa). Meanwhile, NCM stock has risen 3.5% in the last six months (as on May 24, 2017), but is trading at a higher level in comparison to peers. Given the volatile gold prices and trading scenario, we maintain an “Expensive” recommendation on the stock at the current price of $ 20.78

Perseus Mining Limited

Progress at Yaouré Gold Project: Perseus Mining Limited’s (ASX: PRU) stock moved up about 2.5% on May 25, 2017 with gold price movement. PRU has reported good progress achieved to date, on drilling program at its Yaouré Gold Project in Côte d’Ivoire, West Africa. PRU has a target of producing in excess of 500,000 ounces of gold from its West African mines by 2021. PRU stock has fallen 49% in the last six months (as on May 24, 2017) owing to the volatile environment seen in last few months while the group reported for a net loss attributable to members of $22.28m for the half-year to 31 December 2016. We give a “Speculative Buy” recommendation on the stock at the current price of $ 0.29

Resolute Mining Limited

On track with commissioning of project 85: Resolute Mining Limited (ASX: RSG) is targeting an overall gold recovery of above 85% for Syama Project 85. As at mid May 2017, the overall project has been 44% complete. The staged commissioning of the project 85 is on track for the end of March 2018. On the other hand, the gold production of 88,622 ounces was achieved at an All-In Sustaining Cost (AISC) of A$1,091 per ounce (US$827 per ounce) in the March quarter. The FY17 year to date gold production is said to be of 259,180 ounces at an AISC of A$1,031 per ounce (US$778 per ounce). There might be some concerns on the group’s profits given the recent pressure in the gold prices and potential from key mine yet to be delivering well. We give an “Expensive” recommendation on the stock at the current price of $ 1.16

Evolution Mining Limited

Delivering gold production as per guidance: Evolution Mining Limited (ASX: EVN) expects the gold production in the June 2017 quarter to be above 210,000 ounces and the group is on track to deliver its FY17 production guidance of 800 – 860koz. AISC is expected to be at the bottom end of the A$900 – A$960/oz guidance range while gated project capital (approved by the Board in February) for the Cowal E42 Stage H cutback and Dual Leach Project at Cowal would add A$20 – A$25/oz to group AISC in FY17. Moreover, the group gold production for the March 2017 quarter was 202,926 ounces which was in line with guidance of approximately 200,000 ounces. However, EVN stock has risen 24% in the last six months (as on May 24, 2017) and now trades at an unreasonable level. We give an “Expensive” recommendation on the stock at the current price of $ 2.46

Alacer Gold Corp

Reiterated production guidance: Alacer Gold Corp (ASX: AQG) reported that the mining of the higher-grade West Pit has started in early April with the receipt of the pasture permit and had re-confirmed the 2017 production guidance of 160,000 to 180,000 ounces. The gold production in the first half of the year is expected to be between 35-40% of full year production. Meanwhile, Sulfide stockpiles at March 31, 2017 were 7.2 million tonnes at an average grade of 3.36 g/t gold or approximately 780,000 contained gold ounces. In addition, the group started a DFS on the Gediktepe project, with the completion targeted by June 2018. On the other hand, there were 132,000 ounces of forward gold sales remaining at an average price of $1,281 at the end of the first quarter, through September 2018. However, pressure owing to gold price movement might prevail. We maintain an “Expensive” recommendation on the stock at the current price of $ 2.04

St Barbara Limited

Decrease in production: St Barbara Limited (ASX: SBM) reported for a decreased consolidated gold production of 95,346 ounces in the third quarter of 2017 as compared to 98,982 ounces in the second quarter. The consolidated All-In Sustaining Cost (AISC) improved to A$862 per ounce during the quarter from A$876 per ounce in the second quarter of 2017. The average realized gold price for the quarter improved to A$1,651 per ounce as compared to A$1,636 per ounce in the second quarter of 2017. However, SBM has revised the FY 17 guidance wherein their Gwalia (Leonora) gold production is now expected to be between 260,000 and 265,000 ounces from earlier forecast of 255,000 to 265,000 ounces at an AISC of between A$795 and A$815 per ounce (previously A$815 and A$850 per ounce). Simberi gold production is also expected to be between 105,000 and 110, 000 ounces as compared to the earlier forecast of 95,000 and 105,000 ounces at an AISC of between A$1,285 and A$1,330 per ounce against the earlier estimates of A$1,330 and A$1,490 per ounce. However, the mine’s AISC forecasts still look to be high in view of the gold price situation. We give an “Expensive” recommendation on the stock at the current price of $ 2.86

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