Saracen Mineral Holdings Ltd

SAR Details
· Rising AISC costs could be a concern: Saracen Mineral Holdings Ltd (ASX: SAR) stock fell over 5.6% on January 25, 2017 due to volatility in gold prices and concerns over rising all-in sustaining cash costs (AISC) costs. For December quarter of 2016, the group reported a decent gold production of 66,222oz with Carosue Dam contributing 37,692oz while Thunderbox contributing 28,530oz. SAR is on track to ramp-up group production to 300,000ozpa and reported a production of 127,692oz in the first half of the year. The group continued the pre-strip mining at Thunderbox C Zone pit, with over A$4.4m of pre-strip costs being included in Thunderbox AISCs of A$1,394/oz, wherein over A$1,209/oz is without C Zone pre-strip. SAR reported a gold sales of 62,914oz at an average sale price of A$1,628/oz for total revenue of A$102.4 million in the December quarter. Saracen Mineral’s wide ore-grade drill results indicate improvement in inventory and mine life at Thunderbox and Carosue Dam. The group’s Thunderbox underground feasibility study is ongoing, wherein the recent drill results further boosted the case for a bulk mining, high productivity, long-life underground operation. SAR appointed Morgan Ball as Chief Financial Officer while Jeremy Ryan will be Company’s Secretary. On the other hand, the group’s AISC rose to A$1,416/oz in the December quarter, as compared to A$1,402/oz in the September quarter.

· Recommendation: Rising costs coupled with volatile gold prices seem to create pressure on the stock. Trading at a higher P/E, we give an “Expensive” recommendation on the stock at the current price of – $ 1.10

 
SAR performance summary (Source: Company Reports) 

Henderson Group PLC

HGG Details
· Extraordinary dividend: Henderson Group PLC (ASX: HGG) stock fell over 3.13% on January 25, 2017. Janus Capital Group, which is set to merge with HGG, is planning to pay a first quarter of 2017 dividend to its shareholders before the closing of the merger. To ensure equality of treatment of shareholders of both companies, HGG also intends to pay their shareholders an extraordinary dividend, reflecting their first quarter of 2017 earnings, before closing of the merger with Janus. This is, however, subject to board’s approval.

· Recommendation: HGG stock fell over 5.2% in last one month (as of January 24, 2017) and the weakness in the stock might continue in the coming months. We give an “Expensive” recommendation on the stock at the current price of - $ 3.71

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