Western Areas Ltd

WSA Details
·         Weak stock sentiment: Western Areas Ltd (ASX: WSA) stock lost over 5.1% on March 09, 2017 with the overall decline in resources stocks owing to slump in commodity prices. This has followed a decline of over 8.2% in the last four weeks (as at March 08, 2017) for WSA. On the other hand, the group recently sold their two Forrestania tenements to Kidman Resources Ltd. With this sale, the group would get A$6m in Kidman shares at A$0.54 per share with a 1.5% gross revenue royalty over any lithium production from the two tenements. WSA would also get A$15.00 for every contained tonne of Li₂O classified in a JORC Ore Reserve.Meanwhile, the group retained the nickel rights over the tenements while they are advancing discussions regarding a potential farm?in joint venture agreement for lithium rights with Kidman on their northern Forrestania tenements.

·         Recommendation: WSA stock corrected over 25.1% in the last three months (as of March 08, 2017) placing the stock at reasonable levels. We maintain a “Buy” recommendation on the stock at the current price of - $ 2.24

OZ Minerals Ltd

OZL Details
·         Mine life extension: OZ Minerals Ltd (ASX: OZL) stock lost over 3.84% on March 09, 2017 as the group traded ex-dividend. The group’s Prominent Hill has been reported to have a mine life extended to at least 2028 and OZL enhanced their copper production for 2018 and 2019. The group’s Carrapateena mine is the largest new mine progressing in Australia which has more than 20+ years mine life. OZL has a decent balance sheet with no debt and has A$656 million cash to fund growth and shareholder returns, as at February 2017. The group also signed six exploratory earn-in agreements in 15 months.

·         Recommendation: OZL stock rallied over 58.9% in the last one year (as of March 08, 2017) and now trades at higher levels. We give an “Expensive” recommendation on the stock at the current price of – $ 8.25
 

OZL Pipeline (Source: Company Reports)

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