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.

Resources equity research

11 Apr 19

Quarterly Research Outlook

We’re just over three months in to 2019 and we’ve seen a 10% UK market rally, retracing much of the Q4 decline, such is the nature of fickle market sentiment. That said, many of the issues we wrote about three months ago that were impacting markets remain: notably Brexit, trade wars, geopolitics and global monetary policy. The 2019 rally thus far feels somewhat fragile, with competing forces of optimism on a potential trade deal which could underpin the rally, against the deterioration in underlying economic data that could ultimately undermine the recent market gains. In this context, we look at what the lead indicators and the market are telling us about the industrial cycle and the stocks most exposed to various industrial trends. The Q4 derating in short cycle industrials and autos had been vicious and while these sectors have seen a more solid footing in 2019, with earnings downgrades being priced in, it will likely take a trough in lead indicators before short cycle stocks can start to perform again and re-rate relative to the market.

Companies: ARS CYAN HYR LIT SOM ABBY AMS AMER ANX ATYM AVON BLVN PIER BUR CGS CAML CALL CSRT TIDE DTG DEMG EMR FPO FST GTLY GENL GOR GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO INDI JHD JOG KEYS KCT KGH LAM LOK MACF MNO MANO MOD MKLW OXIG PCA PANR PARK PGM PHC PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TRAK TRI VNET VTC ZOO ZTF

27 Mar 19

Rally seen in the first quarter stalls

Parliamentary and Brexit developments continue to hold centre stage, although the precise path forward remains as unclear as ever. The uncertainty over Brexit, worries over a possible slowdown in the US and the outlook for global economic growth generally have all contributed to the recent falls in markets. While the rally seen since the start of the year has petered out, most indices have still made progress. In Share News & Views we comment on Bloomsbury Publishing, Bonhill Group*, Braemar Shipping Services*, Burford, Clarkson, LightwaveRF*, Marshall Motor Holdings and Synectics*.

Companies: AOR APC BONH BMS CTG CRPR DMTR ESC EUSP FDM FA/ LWRF LSAI NKTN PCF SNX TCN VRE W7L

16 May 19

Confirmation of debt financing

Trans-Siberian Gold is proposing to buy back 22,894,565 existing shares from two of the major shareholders within UFG Asset Management (UFG) at an attractive discount to the market price (33p vs 57p current price). As part of the transaction further shares will be sold by the same shareholders to other members of the UFG Group, Directors and to new investors. The share sales, together with the buy back, will reduce the dominance by UFG of the share register and benefit shareholders as a whole. (reducing the UFG holding from 86.4% to 77.0%)

Companies: Trans-Siberian Gold

04 Sep 18

H2 2018

Graphite is an allotrope (a chemically similar, structural modification of carbon), exhibiting both metallic and non-metallic properties which favour a vast number of end-use markets. Further to traditional steel manufacturing, the unique qualities of graphite, including very high thermal and electrical conductivity, lend itself to innovative battery and emerging technologies.

Companies: VRS HAYD SYR TON KNL MNS NGC FMS LLG TLG

20 Sep 18

AIM MARKET UPDATE June, July, August 2018

AIM showed no signs of a summer slowdown with three strong months with regards to total funds raised (new and further issues). June, July and August averaged over £700m per month, boosted by a particularly strong June which delivered 14 IPOs (historically AIM has 5-6 new joiners per month). Through the end of August 2018, the total amount raised (new and further issues) of £4.80bn is +15% on the same period in 2017 which itself was the best year since 2007.

Companies: CDM LOOP YEW BLOE AQX SAE ANX TGP INX CBOX MIND KGH RAI TGL YCA IMMO DGOC NUC OVB TWD CNIC

21 Nov 18

Tungsten – Global Supply/Demand Dynamics Improve Pricing Outlook

Recent years characterised by oversupply and falling ammonium paratungstate (‘APT’) prices now look set to reverse. The global tungsten (or Wolfram) market is projected to grow at a CAGR of 5.51% between 2018-2022 as underlying demand from key sectors, including automotive, aerospace, chemical, electrical components and mining, gathering pace at a time when more rigorous enforcement of environmental regulation by China, the metal’s significantly dominant supplier, is being seen to curb supply.

Companies: WRES ORM THR PREM

31 Jan 19

Quarterly Research Outlook

The market has not faced quite so many conflicting challenges for a number of years, whether related to global geopolitics, trade wars, ongoing Eurozone issues or the “will they, won’t they” saga of Brexit. In our Best Ideas, we sought to highlight stocks that present investors with interesting opportunities following recent market moves. Those stocks, we believe, warrant investor attention, in many cases for uncorrelated or stockspecific reasons, regardless of the near-to-medium term market direction. These stocks, in general, represent attractive and well-managed businesses or assets, with share price catalysts and where valuations or recent stock performance provide investors with a good entry point.

Companies: 7DIG ABBY AMS ANX ARS ATYM AVON BLVN PIER CGS CAML CALL CSRT TIDE DTG DEMG ELM EMR FPO FST GTLY GENL GRI GEEC HDY HMI HAYD HEAD HILS HTG HUR IBPO IOG INDI JHD JOG KEYS KCT KGH LAM MACF MOD MKLW OXIG PCA PARK PMO RBW RMM REDD RSW RNO RKH RBGP ROR SUS SCPA SHG SOLG TWD TRAK TRI VNET VTC ZTF

13 Feb 19

Small Cap Feast

United Oil & Gas (UOG.L) an oil and gas exploration and development company brought to the Official List (Standard Segment) in July 2017 by way of a reverse takeover of Senterra Energy plc. No capital to be raised, expected market cap of £17m and expected 28 Feb Techniplas –global producer and support services company providing highly engineered and technically complex components, making the supply chain to original equipment manufacturers more efficient. FYDec17 rev $515m.

Companies: NMRP PGD KDR CER CLIN NBB MLVN RENX BAGR D4T4

25 Mar 19

Strong growth potential as expansion project in final straight

Caledonia operates the Blanket mine in Zimbabwe (moving to ownership of 64%, from the current 49%, is pending final ratification). The company’s 2018 results showed continued progress: the Blanket mine continues to generate strong cash flow to pay for the mine expansion and allow Caledonia to continue to pay its dividend (currently yielding 4.8%). Caledonia announced an EPS of 99c/sh (2017 87c/sh) with cash at the end of the period of $11.2m ($12.8 end Dec 2017). The Blanket mine cash flow funded $20m in capital spend to increase production from ~55koz gold/yr to over 80koz gold/yr by 2021/2022. From 2019, capital expenditure will fall and more cash will be available for other uses. Zimbabwe remains a challenging place to operate, not least because of the difficulty obtaining the US dollars to finalise developments – but Caledonia are coping well and recent fiscal measures in country should improve the situation in our opinion. Notwithstanding these outside considerations but given the continued progress at the mine, we see fair value at 800p/sh.

Companies: Caledonia Mining Corporation Plc Com Shs Npv

11 Mar 19

LIBERUM: SolGold, Asiamet - The value case for greenfield copper - The Miner Details

Following a results season where the major mining companies proudly paraded their copper credentials, including Rio and BHP uncharacteristically drawing attention to early stage discoveries at Winu and the Stuart Shelf, industry attention on copper development opportunities has never been greater. Despite this, domestically listed greenfield exploration appears to have slipped largely under the radar of UK institutions.

Companies: SolGold ASIAMET RESOURCES

17 Apr 19

2018 Full Year Results

Central Asia Metals (CAML LN) having delivered on production guidance for 2018 released robust full year results underpinned by the low cost base of the group. Revenue of US$192m was up 88% YoY while Kounrad unit costs of US$0.54/lb were up 4% YoY, in line with our forecast. Sasa unit costs were 5% higher YoY. The stronger top line and low cost base meant EBITDA was up 88% YoY to US$125m. Net income from continuing operations was up 48% YoY while EPS up 8% YoY to 31 cents per share highlights the accretive nature of the transaction. The full year dividend of 14.5p/sh. was 5% ahead of our estimate.

Companies: Central Asia Metals

18 Apr 19

LIBERUM: Sylvania Platinum* - More value and more options

We recently attended a company site visit which highlighted that we have considerably undervalued the tail of Sylvania’s operations. Also, now that its host Samancor has grander ambitions, Sylvania too has possible growth opportunities.

Companies: Sylvania Platinum

03 May 19

NdPr – the nascent green economy metals

Fundamental to green technology application, rare earth oxide consumption is benefiting expanding ‘high-tech’ markets. Weight-saving potential of permanent magnets (PMs) is creating the biggest blind spot in the raw metals EV supply chain for rare earth elements. NdPr-based (neodymium-praseodymium) motors enable 15-20% battery capacity savings in Li-ion EVs to enhance driving range and usability. ~600kg/MW rare earth requirement is creating significant wind turbine demand as global capacity forecast to rise by up to 1.9TW by 2050. Unprecedented role of rare earth PMs in global miniaturisation. International Federation of Robotics forecast 1.7m new robots transforming global factories by 2020. NdPr permanent magnets will be essential in growing global drone market – a US$100m market opportunity. Industry consolidation and broad upgrading of production quotas have mitigated rife illegal mining across China, providing improved global supply clarity and price stability, while limiting environmentally degrading practises. Global trend of ethical metal sourcing is highlighting the substantial cost of rehabilitating unsanctioned activity, estimated at $30bn. Chinese government environmentally-focused legislation is restricting oversupply, drawing down swollen inventories and bringing the market into balance. China inflection point as net importer expected 2019/2020

Companies: MKA PEK HAS GGG ABM ALS ARCM IRR PGM SML

07 May 19

Q3 Production update

Rainbow Rare Earths has released its Q3 Production Update. RBW has secured a new funding agreement with Pella Ventures (its largest shareholder), of an unsecured 12-month loan for US$0.7m in order to function as a bridge for RBW’s operations. In addition to this, RBW has agreed to pause any further tranches under the existing equity drawdown facility, the Lind Partners. The new funds will be used for general corporate purposes whilst Rainbow considers the most appropriate and efficient structure required to finance Rainbow’s proposed new fleet and mining areas but is intended to convert into equity, along with interest at 15% per annum on a straight line basis, in due course on equivalent terms agreed with any new investors.

Companies: Rainbow Rare Earths

10 May 19

Vanchem acquisition adds value to Mokopane

Bushveld Minerals holds 74% of Vametco, an integrated vanadium mining, processing and technology business. 26% of Vametco held by a BEE group. Bushveld Energy (84%) is developing vanadium redox batteries for grid use in South Africa. Lemur Holdings(100%) is developing a thermal coal mining & power project in Madagascar. AfriTin separately listed on AIM in London. Bushveld retain a minority stake in the company.

Companies: Bushveld Minerals

05 Apr 19

Bushveld Minerals Ltd - Update on Bushveld Energy and the mini-grid project

08 May 19

Bitesize briefing - Mytilineos

25 Apr 19

Anglo Pacific Group - Q1 Trading Update

15 Apr 19

Serabi Gold - A strong start with over 10,000 ounces produced in Q1 2019

07 May 19

Greatland Gold - Commences Field Exploration Campaign

15 Apr 19

Beowulf Mining - Management Update on Kallak and Vardar

02 May 19

Ariana Resources - Shareholder meeting

11 Apr 19

Avesoro Resources - Q1 2019 PRODUCTION UPDATE

18 Apr 19

Capital Network analyst on Oriole Resources as it refocuses on Africa

08 Apr 19

Kefi Minerals - Project Equity Financing Update

16 Apr 19

Greatland Gold - Moves Forward with Drilling Plans for Firetower Project

04 Apr 19

Beowulf Mining - CEO Interview

17 Oct 16

Bushveld - Operational update

02 Apr 19

Serabi Gold - Results for the year ended 31 December 2018

02 May 19

Yellow Cake PLC - Company update

Latest Content

UNITED CO RUSAL

A weak start to the year

US sanctions were withdrawn in late January 2019. Yet, Rusal’s Q1 results – VAP sales and profitability – were materially weak. While operational normality should be gradually restored, the current market environment poses new (near-term) challenges. Fortunately, the Russian aluminium major seems well-equipped to withstand these headwinds and hence, remains an attractive, though still risky, sector bet.

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17 May 19
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Deutsche Rohstoff

Deutsche Rohstoff - US onshore organic growth

Deutsche Rohstoff’s (DRAG) organic investments, c $145m in FY17 and FY18, helped deliver more than 100% growth in FY18 revenues to €109.1m (€53.7m in FY17). Year-on-year sales growth was supported by a material increase in oil and gas production, which almost doubled to 9.4kboed (from 5.1kboed in FY17), combined with higher price realisations. EBITDA rose more than 250% to €97.9m (€36.1m in FY17), while net income (after minority interests) rose to €13.9m (€7.7m in FY17). DRAG’s key focus remains on its US oil and gas interests, with c $70m of organic and internally funded investment planned in 2019. As a result, DRAG guides to EBITDA in the €25–35m range in FY19 and €55–65m in FY20, reflecting recent divestments and underlying growth from Cub Creek Energy.

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17 May 19
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SHED ACT SCHO ABM FFI PPIX AGM OSI CHH HUNT

Small Cap Feast

Essensys plc—a provider of mission-critical SaaS platforms and on-demand cloud services to the high growth flexible workspace industry, plans to join AIM. Offer TBC, expected 29 May 2019. Induction Healthcare Group plc—a healthcare technology company focused on streamlining the delivery of care by Healthcare Professionals looking to join AIM. Expected raise of £14.58m at 115p, market cap of £34.07m. Expected 22 May 2019. SDX Energy plc—a North Africa focused oil and gas company, announces its intention to complete a Canadian plan of arrangement under section 192 of the Canada Business Corporations Act and will have shares de-listed from the TSX-V and admitted to trading on AIM. Expected 28 May 2019, anticipated market cap of £76m Renold plc—a leading international supplier of industrial chains and related power transmission products, announced that it will cancel the listing of the Company from the premium segment and apply for admission on AIM. Expected 06 June 2019. Alumasc Group plc, the premium building products, systems and solutions group, has announced its intention to move from the Premium Segment of the main market to AIM. Expected market cap of £33.4m. Expected 25 June 2019

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17 May 19
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Ariana Resources

Ariana Resources - Salinbas Update

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ariana-resources-salinbas-update-16-05-2019

16 May 19

AAZ AAL KOD bmn FUR KAV SML THR

SP Angel – Morning View

Anglo Asian Mining (AAZ LN) – FY18 show +68% in free cash flow with the Board proposing 4USc final dividend | Anglo American (AAL LN) – BUY, 126p (from 96p) – Investing $234m in a new diamond recovery vessel | Birimian Limited (BGS LN) – Goulamina lithium project update | Kodal Minerals (KOD LN) – see Birimian comment | Bushveld Minerals* (BMN LN) – BUY, Target price 90p from 87p – South Australia moves to vanadium redox-flow storage as base technology | Fura Gems (FURA CN ) – C$30m raised for Colombia emeralds and Mozambique ruby projects | Kvango Resources (KAV LN) – Laws of probability to be rewritten after Kvango strikes mineralisation in first and second drill holes under Karoo sand in Botswana | Strategic Minerals* (SML LN) – Redmoor Scoping study indicates potential to construct new tin/tungsten mine in Cornwall | Thor Mining* (THR LN) – Drilling results from Hawkstone Mining’s Big Sandy lithium project

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16 May 19
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Trans-Siberian Gold

Confirmation of debt financing

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16 May 19
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Serabi Gold

Serabi Gold - Palito Update

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15 May 19

ACP ASO SAV SDI

Morning Note – 15 May 2019

Armadale Capital (ACP): Corp Mahenge Liandu project update | Avesoro Resources (ASO): Corp Q1 financial results | Savannah Resources (SAV): Corp Significant new high grade lithium drilling results | Scientific Digital Imaging (SDI): Corp FY trading update

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15 May 19
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Salzgitter

Higher at-equity profit from Aurubis sole reason for profit increase

Salzgitter holds a 25% stake in copper refiner Aurubis. This stake was lowered a while ago as Salzgitter had issued a bond that was convertible into Aurubis shares. The stake has again been increased to 25% in Q1 19 and the revaluation of the stake plus its at-equity profit contribution increased stated earnings by around €43m. The reported profit increase was less than that.

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