Strong H1; an H2 repeat offers upgrade potential

Castings plc (CGS LN) - Interims show robust demand

Castings has released an exceptionally strong set of interims for the six months to the end of September. Revenue growth of 30% was driven largely by increases in price per tonne from the Foundry business due to cost surcharges and customers taking higher value products. As a result, operating profit increased 31% to £9.6m and we lift our FY24 estimates by 3.7% to £19.2m. We also factor in the impact of a new £17m planned production line that is expected to come on stream in FY26 to help meet fo

On track and mispriced

Castings plc (CGS LN) - Strong demand in H1

Castings has released a trading update ahead of its H1 24 interim results next month (10th November). It confirms the strong trading seen in the first four months of the year (AGM trading update) has continued through August and September and revenue is ahead YoY. Underlying demand for heavy trucks (c. 75% of Group revenue) remains at elevated levels and continues to be reflected in the schedules of OEM customers. In fact, Castings notes that current and forecast demand is in excess of capacity.

Value anomaly despite resilient trading

Right here, right now

Castings plc (CGS LN) - Strong demand dynamics continuing into H1 ‘24

Castings has released a brief trading update ahead of the AGM today. The strong demand from commercial vehicle customers reported for the year to March has, encouragingly, continued into the first four months of FY24.

Double-digit upgrades and special dividend

Castings plc (CGS LN) - Strong FY23 feeds into positive outlook for FY24

Castings has released its FY23 results confirming strong performance across the year with revenue increasing 35% to £201.0m and operating profit up 36% to £16.4m. The FY23 dividend of 17.4p plus a supplemental special of 15.0p equals a total of payout of 32.4p. Despatched weight was the highest since 2014 and the foundry operations increased output 6.6%. Pricing was firm across the Group as surcharges were implemented to offset input cost inflation, particularly energy. Importantly the Machining

Trading ahead of expectations

Castings plc (CGS LN) - Year-end trading update

Today’s FY23 trading update confirms a continuation of the strong performance achieved by Castings in HY23, despite broader macro-economic difficulties, due to the resilience of and strong end-customer demand in the HGV market. Zeus update headline forecasts for FY23, increasing revenue expectations by 11.1% to £200m and adjusted PBT by 8.4% to £16.8m. The strong operating environment has continued to support good trading in the first month of the new financial year and the order book remains at

New Debt Facility – Lowering TRR Cost of Capital

We have been roadshowing Trident Royalties all week during which time the company released an announcement that they have entered into a commitment letter with BMO and CIBC for a new $40m revolving credit facility (RCF), with the potential to increase the facility to $60m via an accordion feature. The proceeds from the $40m are going to be used to repay the existing secured debt facility of $40m with Macquire in Q1 next year.

Pan African Resources - Valuation up 22.2% with new gold price forecasts

On 22 November, Pan African Resources (PAF) announced that operations to date in FY24 had performed in line with, or better than, expected, with gold production for H124 anticipated to be in the range 94,000–98,000oz (cf 92,307oz in H123). As a result, it increased its production guidance for FY24 to 180,000–190,000oz, which caused us to increase our production estimate in turn by 1.9% (or 3,575oz) to 189,725oz. The change made only a modest difference to our EPS forecasts for FY24 (see Exhibit

Sylvania Platinum - Q124 production up, costs down

Sylvania Platinum is a low-risk, high-yielding South African platinum group metals (PGM) dump retreatment operation. Despite a 15% fall in the PGM basket in Q124 versus Q423, the company maintained a healthy cash position of US$126.9m at end September 2023. Production in Q124 was better than we estimated. Unit costs were down in every cost category in response to higher ounces produced, but despite this, EBITDA and net profit were sharply lower. The company is controlling capex as capital alloca

Arrow Exploration Corp. (AIM: AXL): CN-2 flows at up to 1 mbbl/d. Focusing on developping the Ubaque at Carrizales Norte

• The Carrizales Norte-2 well (CN-2) encountered 60’ of net pay in the Ubaque formation. • The well has been put on production in the Ubaque with initial flow rates of 1,012 barrels of fluid per day. The water cut stabilized at 3% and the oil gravity is 13.6 API. • The CN-2 well is currently producing 680 bbl/d gross (340 bbl/d net) as the company has set the ESP at the minimum optimum rate to maximize recovery factor. The build-up analysis indicates the well can produce at 1,400 bbl/d gross at

Auctus on Friday - 01/12/2023

AUCTUS PUBLICATIONS ________________________________________ ADX Energy (ADX AU)C; target price of A$0.80 per share: Key environmental permit received for key well – An Environmental Clearance has been received from the Department of Nature Protection of the State Government of Upper Austria to drill the Welchau-1 gas well. The Environmental Clearance is the last regulatory requirement to commence operations at the Welchau gas exploration project. The well is expected to spud in January and targ

Successful first test at CN-1

Kenmare Resources: Q3 Preview- operations expected to stabilise after challenging H1

Kenmare Resources will release its Q3 trading update on Thursday 12th October. The key focus will be the delivery of operational improvements after a challenging first half, in our view. We estimate heavy mineral concentrate (“HMC”) production in Q3 of 378kt, delivering ilmenite end-product output of 276kt, zircon of 14kt and rutile of 2.2kt. Including solid H1 financial results (reported o 15th Aug), we revise our FY23E EBITDA upwards by 5% to US$236m. Our Dec’24E target price is unchanged at G

Neometals - Primobius process makes high purity nickel sulphate

Neometals has announced that its 50/50 Lithium-ion battery recycling joint venture, Primobius GmbH, has proven that its process can produce battery-grade nickel sulphate from German EV batteries. Nickel sulphate is the largest volume battery material produced in the Primobius process and the second most valuable product. It is a major contributor to ensuring the lithium production operating costs are in the lowest quartile.

Hurricane Energy - Resource downgrade warning

Hurricane’s technical committee has concluded that there is a reasonable probability that the oil water contact (OWC) in the Lancaster field is shallower than the range of OWCs estimated in the 2017 competent person’s report (CPR) by RPS Energy. As a result, the company believes there is a risk that the estimated reserves for the Lancaster early production system (EPS) and the contingent resources across the West of Shetland portfolio will be materially downgraded. Given the range of outcomes wh

Arrow Exploration (AXL LN) - CN-1 initial well result

Successful initial result of CN-1 well. Arrow has announced a discovery in its CN-1 exploration well on the Carrizales Norte prospect onshore Colombia (Arrow 50%). The well has intersected a total of 148ft of net pay across the Carbonera C7 (26ft), Gacheta (64ft) and Ubaque (58ft) reservoirs.

Arrow Exploration (AXL LN) - CN-1 flow testing update, Q1 2023 results

Successful initial flow test results from Ubaque reservoir. Arrow has announced flow tests from the first of three reservoir levels in its recently drilled CN-1 well - the Ubaque reservoir - drilled on its Tapir block (Arrow 50%) onshore Colombia

Arrow Exploration (AXL LN) - CN-1 well update

Arrow has released an update on its CN-1 well on its Carrizales Norte discovery on the Tapir block in Colombia (Arrow 50%).

Arrow Exploration Corp. (AIM: AXL): Exploration success at Carrizales Norte

• The Carrizales Norte-1 (CN-1) exploration well encountered a total of 148 feet of net oil pay measured depth (128 feet TVD) across three very high quality sands. We understand that this well above pre-drill expectations. • This is the largest net oil pay encountered by a well so far on Tapir (RCE-5: 90 feet, RCE-4: 45 feet, RCE-3: 58 feet, RCE-2 80 feet, RCS-1: 55 feet). Because the reservoirs encountered at CN-1 are slightly deeper than at Rio Cravo, the pressure of the reservoirs is expected

Arrow Exploration Corp. (AIM: AXL): Zone at Carrizales Norte with no booked reserves has flowed >1 mbbl/d

• The Ubaque horizon at the Carrizales Norte-1 (CN-1) exploration well was put on three tests, the last of which tested at 1,134 bbl/d of 13.5 API oil on pump. The flow rate was stabilized with a 28.3% water cut (completion fluid). The water cut has been decreasing throughout testing. • This is a very good result, given that no reserves are booked in the Ubaque. • There is an opportunity to mix the heavy oil from the Ubaque with the C7 light to maximize pricing. • Arrow plans to complete the t

Arrow Exploration Corp. (AIM: AXL): No flow from the Gacheta but overall reserves addition from CN-1 larger than initially expected

• The Gacheta zones proved unproductive at the CN-1 well location. Management is investigating potential reasons for the lack of productivity and plans to re-evaluate these Gacheta zones in future wells. • The Gacheta zones were located above the Ubaque that flowed at rates >1,100 bbl/d. • Arrow will put in production the C7A and C7 zones during the course of next week. These are the primary zones at Carrizales Norte. • Overall, the company’s preliminary interpretation of the CN-1 discovery sug