Due to vast mineral resources available, the Australia’s resources sector remains one of the most stable sectors. In an upswing of the metals and mining cycle, companies will continue to reap benefits in the coming time. While the investors expect the capital expenditure to increase next year in pursuit of higher productions, miners need to be careful and maintain the discipline in the allocation of their capital. Their current focus should be on profits and not on tons, if they want to give value to the stakeholders.
Apart from heavy weights four stocks are responding well to the recent volatility seen in the markets. One such stock is GOLDEN MILE RESOURCES LTD (ASX: G88) – the company is beginning development program in less than 6 months at Quicksilver with metallurgical test work and detailed geological studies with drilling of ‘Category 1’ EM sulphide targets having potential for discovery. There are other projects like Leonora east, Minara, Gidgee and Darlot which are also on track. The company has around $2.2 million worth of cash in hand at the end of September 30, 2018. The stock opened at $0.099 and reached to the day’s high of $0.115 witnessing 16.16% change, it touched a low of $0.097 during the day.
Another stock in this category is HAVILAH RESOURCES LIMITED (ASX: HAV) – the company has confirmed the discovery of a major new iron ore deposit in the Grants Iron Ore Basin. Revenue for the financial year was $4.811 million as compared to 2017 of $16.860 million. EBITDA for the financial year was $2.306 million compared with 2017 of $2.549 million. As at 31 July 2018 the group had available cash of $1.847 million which increased from 2017 of $0.888 million. The stock price went up by 5.263% as at December 5, 2018 to trade at $0.200 during the day.
Among the older ones are RED 5 LIMITED (ASX: RED) – located in the Eastern Goldfields region of Western Australia a bulk mining mineral resource estimate for the King of the Hills (KOTH) gold mine is being reported by the company comprising 28.7 million tons grading 2.0g/t Au for an estimated 1.88 million ounces of contained gold at a 1.0g/t Au cut-off. The company has cash reserves at the end of Sep 30, 2018 of A$18.3 million with a debt of $8.2 million. The enterprise value remains strong at $65.7 million. Share price of RED 5 was at $0.074 during the day on December 5, 2018. ENERGY ONE LIMITED (ASX: EOL) – to acquire Contigo Software from Trayport Limited the company had made a definitive agreement for a total outlay of £4 million, paid in cash comprising A$7.3 million from a debt facility provided by Westpac Banking Corporation (ASX: WBC) and the residual balance from existing cash reserves. This acquisition has the potential to provide the European customers with solutions related to energy trading risk management (ERTM). The stock priced traded flat as at December 5, 2018 to $1.00.
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