Independence Group NL
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IGO Details
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Ramping up the Bollinger orebody development at Nova Project: Independence Group NL (ASX: IGO) stock surged over 8.7% on July 22, 2016 with gold price movement while the group reported about ramping up development at the Bollinger orebody at the core Nova Project. This would lead to a potential optimization of the Nova mine plan and deliver early cash flow and generate value by maintaining initial $443 million capital cost estimate. IGO reported that early development of Bollinger would lead to $134 million improvement in estimated FY18 real free cash flow against December 2015. This early development of the mine would also have the potential to enhance the mining production rates in excess of 1.5 Mtpa.
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Recommendation: We put a “Hold” recommendation on IGO at the current price of $4.26
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Net cash flow in Life of Mine Plan (LOM) (Source: Company Reports)
Regis Resources Limited
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RRL Details
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Strong June quarter performance: Regis Resources Limited (ASX: RRL) surged over 5.9% on July 22, 2016 with gold price movement and the group delivered a strong June quarter performance. RRL delivered a quarterly gold production of 78,471 ounces during the fourth quarter of 2016 as compared to 75,656 ounces in the third quarter of 2016. Accordingly, RRL generated an annual gold production of 305,084 ounces, which is more than its upper end of the annual FY2016 guidance of 275 – 305koz. Pre-royalty cash cost for the quarter reached $776 per ounce while all in sustaining cost reached $951 per ounce, delivering better than guidance again. Meanwhile, RRL cash flow from operations rose to $68.2 million, as compared to $56.5 million in the third quarter of 2016. On the other hand, RRL issued gold production guidance in the range of 300,000 – 330,000 ounces at an AISC range of $980 – 1,050 per ounce for FY17. The stock delivered a year to date performance of 50% (as of July 21, 2016).
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Recommendation: We believe that the stock is “Expensive” at the current price of 3.75
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Fourth quarter production (Source: Company Reports)
Gage Roads Brewing Co Ltd
GRB Details
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Sharp top line drove the price: Gage Roads Brewing Co Limited (ASX: GRB) stock surged over 16.1% on July 22, 2016. This rise is mainly due to the group’s outstanding overall packaged and draught sales of Gage Roads’ proprietary craft beer products during the fourth quarter of 2016 which rose by 76% year on year (yoy) to 89K carton equivalents. Accordingly, the group’s draught sales surged 280% yoy driven by ongoing penetration of on-premise sales. This strong June quarter drove the overall packaged and draught sales of Gage Roads’ proprietary craft beer products by 83% to 0.35 million carton equivalents for fiscal year of 2016 as compared to FY15.
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Recommendation: We give a “Speculative Buy” on the stock at the current price of $0.065
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