Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on ALKANE RESOURCES LTD. We currently have 7 research reports from 1 professional analysts.
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Research reports on
ALKANE RESOURCES LTD
ALKANE RESOURCES LTD
Staged DZP plan de-risks financing and off-take
19 Dec 16
Alkane’s (ALK’s) recently announced revised execution plan for the DZP provides for a significant re-rating of the project’s value. We calculate that the new modular design, where two trains of 0.5Mtpa will be constructed between end 2017 and 2023, will yield the same 1Mtpa size project as before but by using a staged capex spend will result in a c 16% uplift to our fully diluted (at a share price of A$0.40) DDF value of ALK’s shares. We view this plan as pivotal to the DZP’s successful execution and something that reduces risk in a multitude of areas, such as lower financing risk and construction costs from building components in lower-cost jurisdictions. Customer participation should also be improved by lowering commitments in off-take agreements geared to initially smaller production.
MoU signed with Siemens
25 Oct 16
Alkane has announced that it has signed an MoU (via its wholly owned subsidiary Australian Zirconia) with Siemens relating to its flagship Dubbo Zirconium Project (DZP). The purpose of the MoU is to advance the DZP, in particular to state each party's intention with respect to the procurement of Siemens’ equipment and operational solutions, and future offtake of products produced by the DZP. This follows Alkane’s 16 August announcement relating to a major zirconium agreement with a UK specialist chemicals firm. In our view, both agreements de-risk financing of the estimated A$1.3bn capex requirement for DZP and move it closer to the construction phase.
TGO in line with guidance, DZP shovel ready
26 Jul 16
The TGO gold mine continues to perform well, helped in no small part by a resurgent gold price during H216, and despite unseasonably high rainfall persisting through Q416. Stronger cash flows resulted and we expect the TGO to continue at similar operating levels (to FY16) through FY17. The DZP continues to advance, albeit with a number of concurrent project elements requiring completion before financing can be finalised.
Clear path to financing and securing off-takes
15 Mar 16
Alkane’s wholly owned subsidiary, Australian Zirconia, has been granted an Environmental Protection Licence (EPL). This finalises the approval process for the Dubbo Zirconia Project (DZP) and significantly de-risks the path towards financing. With all the development permits now in place, Alkane can provide assurance to its finance team that no fundamental obstacle, whether technical, commodity price (the DZP is robustly profitable at current commodity prices), governmental or otherwise, can hinder the project’s development post financing being secured.
Gold production on target, costs within budget
01 Feb 16
Alkane reports a second cash flow-positive quarter after the high amounts of waste required to be mined during H215 made the TGO cash flow negative. Gold production remains on track for 60-70koz by end FY16, with AISC costs in a range of A$1,200-1,300/oz ytd. Costs compare to an Australian dollar gold price of c A$1,570/oz. Progress on developing the DZP is also highlighted, with the key mining lease achieved during the quarter. We maintain our view that the DZP, through its diversified product suite and very advanced stage of engineering and product offtake arrangements, remains the strongest non-Chinese contender for exposure to the strategically important REE (and other speciality metals) space.
Ready to develop with more value to come
19 Oct 15
Our value of Alkane's flagship DZP project has improved by 32% based on the completed FEED design (released in August 2015) and conservative (2020e) product prices, when compared to the value provided in its 2013 DFS. The three main reasons are inclusion of a hafnium revenue stream, improved metal recovery factors, providing more metal to sell, and a weakened A$ aiding US$-priced revenues against domestic priced operating costs. When remaining offtake agreements and project permits have been received, Alkane will aim to finalise its long-established financing strategy to fund development of this unique (A$1.3bn) diversified-commodity project. This note focuses solely on the DZP, with the Tomingley Gold Operation referenced only in our SOTP valuation.
Strong trading leads to upgrades
22 Mar 17
On the back of today’s positive trading update and slightly upgraded profit forecasts for FY2017, FY2018 and FY2019 we have reviewed our DCF analysis. This has led to an increased DCF valuation per share of 1500p (from 1200p) which we have made our new target price (from 1200p). Both TFP and JC Paper have contributed to the upgrades shown in the table below as have favourable currency movements. With the potential for further upgrades due to capitalising 3DP costs to come we maintain our Add recommendation.
Small Cap Breakfast
21 Mar 17
First Sentinel—Investment company expecting NEX admission/introduction on 24 March. £636k raised pre-IPO. BioPharma Credit—Expected Gross Initial Acquisition Proceeds now c.$338m. Gross Cash Proceeds capped at $423m with placing and open offer. Results expected 23 March with admission now due 30 march. Tufton Oceanic Assets- The Company intends to invest in a diversified portfolio of second hand commercial sea-going vessels where the Investment Manager believes that an attractive opportunity exists in shipping. $150m raise. Admission 3 April.
Bang to rights
21 Mar 17
Tullow unexpectedly announced a US$750m rights issue on Friday at a 45.2% discount to the previous close. While this step confirms our investment thesis, the scale of the discount and the timing look like a slap in the face for investors and/or indicative of a weaker financial position than we are modelling. We publish revised estimates to reflect the impact of the issue and cut our Target Price to 215p per share (from 245p). We maintain our Hold recommendation.
Panmure Morning Note 22-03-2017
22 Mar 17
Acacia Mining and Endeavour Mining confirmed merger talks have now ended with Endeavour claiming an inability to “create adequate value for Endeavour shareholders”, most likely, we believe, given the disappointing ruling from the Tanzanian government on copper-gold concentrate sales. We were positive on the merger and believed a credible London listed Pan-African producer capable of challenging Randgold, would have been established. We make no change to our Hold recommendation today, and expect the shares to be marked lower in early trade.