4 Miners Into Action - RRL, ALK, PNR, BRB

  • Oct 11, 2019 AEDT
  • Team Kalkine
4 Miners Into Action - RRL, ALK, PNR, BRB

Mining refers to the extraction of valuable minerals from the core of the earth. It is one of the primary sectors in Australia and contributes toward the growth of the country in terms of export income, royalty and by providing employment. Several mining booms increased the investment in mining and led to higher incomes from mining activities and more immigration to Australia.

Let us now have a look at few stocks in the mining industry.

Regis Resources Limited (ASX: RRL)

Regis Resources Limited (ASX: RRL) is a mining company engaged in the production of gold from the Duketon Gold Project, as well as exploration, evaluation and development of gold projects in Eastern Goldfields of Western Australia and Mcphillamys Gold project in New South Wales.

Sale of Gold Tenements to Regis for $25 Million:

The company entered into an agreement with Duketon Mining Limited to acquire a strategic package of tenements from the Duketon project for $25 million in cash. The retained nickel rights area with Duketon Mining represents over 30% of the previous granted tenure held by Duketon.

FY19 Gold Sales Revenue Up ~8%
  • During the year ended 30 June 2019, the company produced 363,418 ounces of gold and revenue from gold sales went up by ~8% from the previous year.
  • As a result of strong performance, the company announced an ordinary fully franked dividend of 8 cents per share on 19 August 2019 which was paid on 16 September 2019. The full year dividend stands at 16 cents per share, representing a payout ratio of 12% of revenue and 26% of EBITDA.

Outlook: The company is expecting to register gold production of 340,000 - 370,000oz at $1,125-$1,195/oz AISC. RRL is also anticipating growth of 10% in production by the year 2022 and is planning to take a potential production step at McPhillamys Gold Project and Discovery Ridge. Regis is also expecting to increase the production at Duketon and start the early stage testing at Gloster UG and Regional Exploration across the belt.

Source: Company’s Report

Stock Performance: The stock of RRL closed the day’s trading at $4.990 on 11 October 2019, down 1.188% from its previous closing price, with an annual dividend yield of 3.17% and a market cap of $2.57 billion. The performance of the stock has gone up by 10.5% in the past 30 days and in terms of valuation, the stock has a P/E multiple of 15.690x.

Alkane Resources Limited (ASX: ALK)

Alkane Resources Limited (ASX: ALK) is engaged in the business of mining at Tomingly Gold operations, evaluation activities in relation to the Dubbo project and exploration and evaluation activities on tenements held by the group.

Resource and Reserve Statements:

The company released a report on identified mineral resources and ore reserves for the Tomingley Gold Operations; Peak Hill Gold Project; and the Dubbo Project in the Central West of New South Wales as at 30 June 2019.

For Tomingley Gold Operations, the company has re-estimated mineral resources and ore resources to account for depletion of 6.44Mt grading 2.0g/t Au (407,000oz) and 1.41Mt grading 2.0g/t Au (89,000oz), respectively. Meanwhile, for Dubbo Project Resources and Reserves, mineral resources and ore resources stand at 75.18Mt @ 1.89% ZrO2, 0.04% HfO2, 0.44% Nb2O5, 0.03% Ta2O5, 0.88% total rare earth oxides plus yttrium oxide (TREO) and 18.90Mt @ 1.85% ZrO2, 0.04% HfO2, 0.44% Nb2O5, 0.03% Ta2O5, 0.87% TREO, respectively.

Roswell and San Antonio Resource Definition Drilling Update: The resource definition drilling program on the San Antonio and Roswell prospects was started in the month of June 2019, for which assay results have now been received for the second 5,000 metres. The program is part of an extensive regional exploration program.

FY19 Financial Performance (as at 30 June 2019)
  • The company’s profit after tax stood at $23,293,000, which was mainly driven by excellent production and cost performance at the Tomingley Gold Operation where full year guidance was met with 48,969 ounces of gold produced at an all-in sustaining cost of $947 per ounce.
  • As at 30 June 2019, the company’s cash, bullion and listed investments totalled $80.8 million, with $69.6 million in cash, bullion on hand at fair value of $3.4 million and $7.8 million of listed investments at market value.

Stock Performance: The stock of ALK settled at $0.790 on 11 October 2019 which is very close to its 52-week high of $0.850. The market cap of the company is $397.29m and the stock gave a return of 292.5% on a YTD basis, trading at a P/E multiple of 17.070x.

Pantoro Limited (ASX: PNR)

Pantoro Limited (ASX: PNR) is engaged in the business of gold mining, processing and exploration at the Halls Creek project in Western Australia.

Appointment of Non-Executive Director: The company appointed Mr Wayne Zekulich as an independent non-executive director of PNR, according to a market update on 2 October 2019. However, the appointment is subject to approval by shareholders at the company’s annual general meeting scheduled in the month of November 2019.

Additionally, the company has hired some key senior personnel, aimed at progressing the development activities at the Norseman gold project in line with the plans while maintaining production activities at the Halls Creek project.

Update on Halls Creek Project
  • The company in late September 2019 provided an update on mineral resource and ore reserve for the project as at 31 May 2019, unveiling mineral resource standing at 1,631 million tonnes @7.5 g/t for 394,000 ounces while the total Ore Reserve noted at 844,000 tonnes @6.59 g/t for 179,000 ounces.
  • Over the years, mineral resources upgraded at the project, which also included the addition of mineral resources at the Grants Creek for the first time.
  • Additional drilling is planned for Grants Creek to continue growth of mineral resources beside the maiden inferred mineral resource for Perseverance and Star of Kimberley deposits of 179,000 tonnes @ 2.4 g/t for 14,000 ounces.
Operational Results:

During the year ended 30 June 2019, the company produced Gold of 43,018 oz, earning revenue of $77,037,903.

Financial Performance (Snapshot: Company’s Annual Report)

Business Highlights

  • The company acquired 50% of Norseman Gold Project in May 2019, structured by Pantoro to limit upfront payment to the vendor and to maximise project funding to support rapid development of the project.
  • Under the Norseman Gold Project Forward Work Program, Pantoro intends to advance key greenfield exploration targets focused on under-explored zones on the Lake Cowan and Lake Dundas, as well as the Polar Bear Peninsula. The initial focus areas for exploration review include Dhufish, Snapper, Swordfish, etc.

Stock Performance: The market cap of the company is $217.55 million. The stock of PNR closed the day’s trading at $0.185 on 11 October 2019 with a PE multiple of 185x. in the past six months, the stock has delivered a negative return of 24%.

Breaker Resources NL (ASX: BRB)

Breaker Resources NL (ASX: BRB) is a mining company carrying out exploration activities on its tenements in Western Australia with the objective of identifying gold and other economic minerals deposit.

AGM In November

The company is scheduled to hold its annual general meeting on 21 November 2019, during which several business aspects would be discussed, including BRB’s 2019 financial report. Following resolutions would also be considered during the meeting.

  • Resolution 1: Adoption of remuneration report
  • Resolution 2: Re-election of Mr Michael Kitney as a director
  • Resolution 3: Ratification of issue of 15% placement shares
  • Resolution 4: Approval for future share placement
  • Resolution 5: Adoption of incentive option scheme 2015
  • Resolution 6: Approval of 10% placement capacity

Corporate and Operations Update: The Board decided to undertake a strategic review of all options to accelerate value from the Lake Roe Gold Project. The Review focuses on maximising shareholder value and aims to lay a platform for a significant step-up in drilling activities to increase the current 1.0Moz Resource.

Financial Highlights for the year (ended 30 June 2019)
  • During the year, total exploration expenditure incurred by the company amounted to $14,418,057 higher than that of the expenditure in FY18 of $13,351,027.
  • The company also incurred an operating loss after income tax of $16,310,207.
  • At end of the year, the company held cash and cash equivalents and term deposits of $4,925,956, which was lower than the previous year of $5,173,422.

Stock Performance: The stock settled at $0.350 on 11 October 2019, with a market cap of $71.32 million and approx. 203.78 million shares outstanding. In the last one month, the stock has delivered a return of 11.11%.


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