Resources

Resources equity research

Explore the latest equity research and media content for companies in the Resources sector. These stocks operate in mining, industrial metals, paper mills and forestry. Mining sectors include coal, diamonds, and gemstones/precious metals.

03 Aug 20

THE MONTHLY August 2020

For this Monthly, we are delighted that Rooney Nimmo and 24Haymarket have allowed us to reproduce a recent report they jointly published, entitled An analysis of UK exits (2015-2019), which provides a granular analysis by sector of the activity in our dynamic private companies world. We hope you find the insights of interest.

Companies: AVO AGY ARBB ARIX CLIG ICGT NSF PCA PIN PXC PHP RECI SCE TRX SHED VTA

03 Aug 20

Just when it was all going so well…

In the midst of another attempted takeover by stealth, Petropavlovsk PLC (LSE: POG) announced their trading results for H1 2020 which leaves them on track to deliver one of their best years ever, operationally and financially, with more to come in 2021. This is down to the perseverance, skillset and hard work of the workforce out in the Amur Region and their CEO Dr Pavel Maslovskiy, who has staked his reputation on the successful build out of the POX plant. Any corporate raider (and shareholder alike) should realise, whether it be Vekselberg or UGC, that without the support of Dr Maslovskiy you won’t win the hearts and minds of the workforce essential for the smooth running of the organisation. Meanwhile, the gold price has run through $1,900/oz; clearly a positive for this leveraged business. Incorporating this and the results into our modelling delivers a new Target Price of 50p and the set of financials shown in the right-hand column.

Companies: Petropavlovsk Plc

06 Aug 20

WHI First Light: Jubilee Metals (JLP) - Additional copper resources secured in Zambia – Project “Roan”

Jubilee Metals successfully processes chrome tailings in South Africa to produce chrome concentrate and PGMS. It also owns the commissioned Sable copper refinery at Kabwe in Zambia and is looking to build a zinc-lead treatment plant at Kabwe next to the Sable refinery to process old tailings from the Kabwe mine. Today Jubilee announces that it has secured access rights to process 2Mt of Run-Of-Mine material grading in excess of 2% copper in Zambia with the potential to add a further 2.5Mt of tailings – Project “Roan”; an as yet an undisclosed project location in Zambia. This material will be upgraded at the “Roan” site with the concentrate shipped off to Jubilee's Sable Refinery to produce copper cathode. Initial target is set at 10kt contained copper/yr from Roan, and Jubilee hopes to begin production in 4 months' time with full production reached in 8 months – advanced preparations have been made, plans drawn up and discussion with equipment manufacturers already accomplished – Jubilee is ready to hit the ground running.

Companies: Jubilee Metals Group Plc

04 Aug 20

SP Angel . Morning View

Centamin (CEY LN) – H2 profits rise 280% as company maintains 2020 production guidance | Chaarat Gold* (CGH LN) - BUY– H1/20 production in at 27koz with FY20 guidance reiterated at 55koz, Tulkubash funding closure on course for YE20 | Edenville Energy* (EDL LN) – Rukwa coal operations restart | Pensana Rare Earths (PRE LN) – Final drilling results from Longonjo | Serabi Gold* (SRB LN) – Extension to drawdown period for the convertible loan | Versarien (VRS LN) - Launch of graphene enhanced protective face mask

Companies: CEY CGH EDL PRE SRB VRS

29 Jul 20

Resilient performance and confident outlook

Hargreaves’ FY20 results are very solid indeed. As previously reported, the only noticeable impact from COVID was in the slippage of Blindwells’ land sales, which were due to conclude during the lockdown period. Site activity has resumed and sales remain on track to conclude in the current year. A final dividend of 4.5p has been declared and the outlook statement is measured but confident. We reintroduce forecasts today, effectively reinstating our pre-COVID expectations. Hargreaves is well positioned to deliver a period of significant, renewed growth with the prospect of a double digit dividend yield from FY22 as HRMS profits are distributed.

Companies: Hargreaves Services Plc

07 Aug 20

Swedish Stirling

Swedish Stirling is building momentum with the signing of a new agreement with Glencore for an additional 88 PWR BLOK waste gas to energy units. This deal is with South Africa’s largest ferro chrome smelter and shows that the company’s technology is gaining acceptance as a go to solution in the industry in South Africa. Swedish Stirling has benefited from its in-country team which has meant that COVID 19 restrictions has not prevented progress. The company now has a strong pipeline of deals which should drive sales in future years.

Companies: GLEN GLEN STRLNG

29 Jul 20

WHI First Light: Hargreaves Services (HSP) - Not Rated

HSP has announced positive results this morning, with a 30% increase in underlying EPS (continuing) for the year to May ‘20. Underlying PBT declined; however the prior year included land sales which did not recur in FY2020A. Stripping these out, profits were ahead YoY. Net debt rose marginally to £28.1m (prior year: £24.5m), largely on the back of accelerated mining activities (positive weather conditions) and delays to the sale of Blindwells, where the company had invested £8m; and is expected to remain steady during the coming year as the group continues to invest in Specialist Earthworks (with a switch to mainly leasing debt on HS2 plant funding). Having deferred the interim dividend on the back of Covid-19, the Board is now reinstating the dividend with a 4.5p payment in respect of the final DPS, reflecting the forward visibility it now feels it has. Given this forward visibility, we would also expect forecasts to be restored to the market in the near future, these having previously been withdrawn.

Companies: Hargreaves Services Plc

31 Jul 20

Iron ore-driven H1 and dividends

Rio delivered a decent set of H1 results, especially considering the COVID-19 disruption. Once more, Iron ore single-handedly came to the group’s rescue and (largely) compensated for varying issues in other divisions, thereby facilitating $2.5bn of dividends. While we don’t expect a magical near-term turnaround in the troubled divisions, iron ore’s sustained resilience should provide healthy comfort – also from a dividend perspective. Hence, Rio remains our preferred diversified mining bet.

Companies: Rio Tinto Plc

28 Jul 20

WHI Equity Research: Savannah Resources (SAV) - A premier European source of hard rock lithium

A premier European source of hard rock lithium Savannah is developing the Mina Do Barroso lithium project in Portugal. An advanced-stage project using simple mining and processing techniques to produce a high-grade, low-impurity spodumene lithium concentrate for sale to China (in the first instance). Mina do Barroso will eventually form part of the solution to Europe's lithium raw material supply chain and will, in our opinion, attract high level support. It has a low capital intensity and as such it is appropriately sized for Savannah to develop to cash-generative stage. The project lies in a prospective area and we would not be surprised if additional resources could be found to either extend the mine's life or increase its production. Savannah also has a (growing) stake in the Mutamba mineral sands project in Mozambique which, while not a priority, contains significant long-term value in our opinion. We initiate with a fair value of 10p/sh and see catalysts on further progress at Mina do Barroso and support from Europe to drive interest in the short-term.

Companies: Savannah Resources Plc

28 Jul 20

SP Angel . Morning View

Anglo American Platinum (AMS JSE) – Amplats declares R2.8bn dividend as EBITDA rises 6% | Ariana Resources* (AAU LN) – 2019 Results show threefold rise in after-tax profit | European Metal Holdings (EMH LN) – Geomet partnership with EIT InnoEnergy | KEFI Minerals* (KEFI LN) – Quarterly update: Tulu Kapi funding closure aimed for October and Hawiah maiden MRE due in August | Petropavlovsk (POG LN) – Auditor appointment update | Pure Gold Mining (PUR LN) –– Additional results from drilling at Red Lake mine | Rio Tinto (RIO LN) – Initial resource and new discovery at Winu | Scotgold Resources* (SGZ LN) – Best time to commission a gold mine

Companies: AAU EMH KEFI POG PGM RIO SGZ

29 Jul 20

WHI First Light: Walker Greenbank & Phoenix Copper

Walker Greenbank is a higher end interior furnishings business with well-established global brand names and manufacturing facilities in the UK. The Group has this morning released an update to coincide with its AGM, which confirms that the improving trends reported at the full year results last month have continued to be seen. Phoenix today announces the results of 7 of its 30 holes into the Empire Open Pit resource gold zone from its property in Idaho. Results are encouraging with several, close-to-surface intersections e.g. 13.7m grading 2.1g/t gold from 5m and another hole with 1.6m grading 8.5g/t gold from 32m down. The gold is associated with minor silver (on average just over 3x the gold grade). Additional channel and field samples were also taken from surface to help site drilling and to define better the surface expression of the skarn-host contact and the higher-grade zones – with grade demonstrated in most of these.

Companies: Walker Greenbank Plc Phoenix Copper Ltd. (United Kingdom)

04 Aug 20

Profitability and (hence) dividends were hammered

H1 results (especially profitability) were pretty weak, with the negative effect of COVID-19 being compounded by disruptions in PGMs and met coal. Cash flows were further impacted by temporary working capital build-up. Hence, dividends were cut by >50%. While copper and iron ore should provide valuable comfort, the concentration of operations in pandemic-vulnerable regions like Africa and LatAm is a major risk. As scope of any pertinent near-term recovery is unlikely, we are likely to maintain our cautious stock recommendation.

Companies: Anglo American Plc

07 Aug 20

‘Impairments + 2020 dividend suspension’ overshadowed impressive trading results

Although acute market volatility translated into an H1 bonanza for trading, Glencore’s COVID-19 vulnerability came to the fore as industrial reported losses, and sizeable impairments were recognised. Moreover, the 2020 dividends were suspended to expedite deleveraging. As market uncertainties are expected to persist, trading’s performance cushion should be maintained, and provide valuable time for industrial to revert to normalcy. Remember, as most commodity prices have recovered back to / beyond pre-COVID-19 levels, and production restrictions are easing, industrial should witness gradual improvements.

Companies: Glencore Plc

26 Oct 17

Good Q3 production numbers leads to full year guidance upgrade

Q3 production numbers for the Kazakh copper miner were good and as a result they have upgraded full year production guidance to 250-270,000 tonnes (t) from 225-260,000 t. They also introduce a gold target of 160- 180,000 ounces for 2017.

Companies: KAZ Minerals Plc

03 Sep 19

Initiation: A golden opportunity in West Africa

Oriole Resources is a gold exploration company with a principal focus on West Africa. It operates prospective licences in eastern Cameroon as well as a JV in Senegal with IAMGOLD, one of the larger global gold mining companies. Oriole has a new name (formerly Stratex) and is creating momentum driven by the new CEO; Tim Livesey who has a background in developing shareholder value. With first mover advantage in Cameroon, and a wealth of new, basic geological data thanks to a World Bank funded project, Oriole is in prime position to establish itself as a leading player in what we see as a potential new gold exploration district. In Senegal, Oriole’s Dalafin project is well located next to IAMGOLD’s Boto project for which an economic feasibility study has been finalised. Any additional satellite resources around Boto will improve project economics further and could prove to have real value for Oriole. In our opinion none of this potential value is included in Oriole’s current share price and, with an expected catalyst-rich outlook, we see a current fair value of 1.3p/sh.

Companies: Oriole Resources Plc

16 Jan 20

Greatland Gold - Outlook for 2020

07 Aug 20

Kavango Resources' Mike Moles talks 'breakthrough' from new report on KSZ

24 Oct 19

Vast Resources secures $15mln facility to bring Baita Plai and its diamonds into production

07 Aug 20

Condor Gold nearer to production than many realise, says Alastair Ford

04 Oct 17

Executive interview - Covata

06 Aug 20

Jubilee Metals CEO talks near-term earnings from significant new copper deal in Zambia

11 Feb 20

Bull, Bears & Brokers: Shaw and Partners Davide Bosio talks gold with Northern Star's earnings and De Grey's price leap

06 Aug 20

Gold 'has nothing stopping it' as it surges past $2000/oz

23 Oct 19

Highfield Resources advancing flagship potash project towards construction phase

05 Aug 20

Ncondezi Energy CEO updates as it submits new Transmission Integration Study

10 Jan 20

Expected higher margins for Kenmare Resources

05 Aug 20

AfriTin Mining CEO says operations are coming along nicely with 35 tonnes produced in July

09 Jan 20

Verde Agritech pushes greener potash saying farming must change

05 Aug 20

Chaarat Gold CEO updates on production and discusses large new exploration target at Kapan

25 Nov 19

Silvercorp Metals 'in a unique position' with two producing mines in China

Latest Content

Q2 20: unimpressive

Q2 results were rather modest in the context of the pandemic and still high imports to Europe In particular, more than half of the profits stem from the volatile Ferrochrome division The group’s (qualitative) outlook for Q3 looks rather cautious We will adjust our numbers downwards in the light of this set of results

Outokumpu Oyj

07 Aug 20
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Kavango Resources' Mike Moles talks 'breakthrough' from new report on KSZ

Kavango Resources Plc

07 Aug 20

Condor Gold nearer to production than many realise, says Alastair Ford

Condor Gold Plc

07 Aug 20

SP Angel . Morning View

Adriatic Metals (ADT1 LN) – 138p, Mkt cap £236m - Performance rights | Predictive Discovery (PDI AU) A$0.087, mkt cap A$65.9m – Results from RC drilling at Bankan

Adriatic Metals Plc Predictive Discovery Ltd.

07 Aug 20
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‘Impairments + 2020 dividend suspension’ overshadowed impressive trading results

Glencore Plc

07 Aug 20
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Swedish Stirling

GLEN GLEN STRLNG

07 Aug 20
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A rather weak Q3 outlook

Q2 was weak as expected due to oil prices and the pandemic The outlook for Q3 is very cautious In particular, America remains a concern given the group’s geographic exposure We will revise downwards our forecasts for the current year at least

Tenaris SA

06 Aug 20
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Jubilee Metals CEO talks near-term earnings from significant new copper deal in Zambia

Jubilee Metals Group Plc

06 Aug 20

SP Angel . Morning View

Altus Strategies* (ALS LN) – High grade gold mineralisation intersected at Tabakorole | Anglo Asian Mining* (AAZ LN) BUY Target 209p – H1 exploration update | Chaarat Gold* (CGH LN) BUY Target raised to 58p (from 51p) – Earnings update | Glencore (GLEN LN) – Record marketing performance shores up H1 results despite Covid19 pressures | Jubilee Metals Group (JLP LN) – Additional copper tailings in Zambia | Kavango Resources (KSZ LN) – Petrology report confirms further similarities between the Kahalari Sutre Zone and the Norilsk nickel system in Russia | Vast Resources* (VAST LN) – Drilling at Baita Plai returns high grade results

ALS AAZ CGH GLEN JLP KAV VAST