A Quick Walkthrough Of 3 Mining Stocks

As per the media reports, Australia’s mining industry employs more than 0.2 million workers and thanks to the rising commodities prices, there has been a reemergence of mining activity. Let’s have a look at three mining stocks with their recent updates.

Regis Resources Limited (ASX:RRL)

Regis Resources Limited (ASX: RRL) is involved in the production and exploration of gold. Regis Resources Limited was officially listed on ASX in 1987. Today, on 23rd July 2019, the company via a release reported its results for the quarter ending June 2019. The company in the June 2019 quarter worked on various exploration projects, such as the Duketon Gold Project and Rosemont Gold Project. Coming in at the top end of the annual guidance, RRL reported annual gold production of 363,418 ounces, with the all-in sustaining cost of $1,029 per ounce, which is around mid-point of the guidance range.

Duketon Gold Project

Regis Resources Limited is engaged in the production of gold from the Duketon Gold Project, which is situated in Western Australia. The company delivered a robust performance from its Duketon Gold Project in June 2019, reporting a gold production of 90,966 ounces as compared to 91,087 ounces in March 2019. Additionally, the cash costs before royalties for the period were $949 per ounce, with an all-in-sustaining cost of $1,189 per ounce.

In parallel, the gold project (Duketon Gold Project) generated operating cash flow of $85.2 million in the quarter, reflecting a slight fall from $89.3 million in March 2019 quarter. During the quarter ended June 2019, the company sold 106,628 ounces of gold at a price of $1,832 per ounce against 76,817 ounces of gold during the quarter ended March 2019 at a price of $1,838 per ounce.

The company recently reported its exploration results for various sites. For the quarter ended June 2019, the company reported drilling results at Garden Well underground target, including 3m @ 7.9 g/t and 18.9m @ 5.2 g/. In addition, RRL reported drilling results at Gloster underground target, including 7m @ 26.1 g/t including 2m @ 67.5 g/t.

The company reported diamond and reverse circulation drilling for the June 2019 quarter, which includes the following:

1. The drill hole identified as RRLGDDD132 intercepted 15.7 metres @ 4 gram per tonne of gold from 396m, which further includes 3.1m @ 7.9 gram per tonne of gold.
2. The drill hole identified as RRLGDDD132 intercepted 20 metres @ 4.3 grams per tonne of gold from 485m, which further includes 4m @ 6.6 gram per tonne of gold from 496.8m.
3. The drill hole identified as RRLGDRCD642 intercepted 18.9 metres @ 5.2gram per tonne of gold from 457m, which includes 4.6m @ 7.2gram per tonne of gold from 463.4m.

The company reported a gross margin and EBITDA margin of 37.5% and 46.5% in 1H FY19 against the industry median of 42.6% and 35.8%. The company posted a net margin of 25.2% in 1H FY19 as compared to the industry median of 13.3%, representing that the company is effectively converting its top line into the bottom line. The company delivered a return-on-equity of 12.2% in 1H FY19 against the industry median of 6.8%.

Outlook

The company anticipates FY20 to be a strong year in terms of operations at its Duketon Gold Project and is expecting gold production in the region of 340,000 to 370,000 ounces and cash costs, including royalties in the ambit of $985 to $1,055 per ounce. The company projects AISC in the vicinity of $1,125 to $1,195 per ounce and growth capital to be around $62 million in FY20.

At market close on 23rd July 2019, the stock of Regis Resources Limited traded at $6.470 per share, reflecting a fall of 1.221%, with a market capitalisation of $3.33 billion. The stock has produced returns of 29.45%, 36.17% and 37.32% for the period of one month, three months, and six months, respectively.

Altura Mining Limited (ASX:AJM)

Altura Mining Limited (ASX: AJM) is engaged in the construction of mine and mineral exploration. Altura Mining Limited was officially listed on ASX in 2001. Today, on 23rd July 2019, the company inked a subscription and cooperation agreement to expand its relationship with Ningbo Shanshan Co. Ltd with an objective to raise $22.4 million. Under the agreement, the company will issue fully paid ordinary shares totaling 200 million at a price of 11.2 cents per share to Ningbo Shanshan Co. Ltd. As a result of the issuance of shares, Ningbo Shanshan Co. Ltd will become the company’s largest shareholder with an equity interest of 19.4%. In addition, the issue price of securities demonstrates a premium of 1.8% to the last closing price on 19th July 2019, amounting to 11.0 cents as well as a discount of 2.9% to the 30-day volume weighted average price of 11.53 cents.

Ningbo Shanshan Co. Ltd will be entitled to appoint a Director to the Board of Altura Mining Limited after the conclusion of equity investment, subject to their relevant interest in the company’s shares does not fall below 12.5 per cent for more than 30 consecutive days.

Binding Offtake Agreement

In another update, the company via a release dated 9th July 2019 stated that it had inked a Binding Offtake Agreement with Shandong Ruifu, a Chinese lithium materials producer. The terms of the Binding Offtake Agreement includes not less than 35,000 dry metric tonnes p.a of 6% grade spodumene concentrate with a minimum 24,000 dmt commitment for the remainder of 2019. The agreement consists of a five year term, with validity till 30th June 2024. The agreement denoted minimum and maximum price of US$550 and US$950 dmt, which is based on LiO₂ content per dmt on 6% LiO₂.

Quarterly Activities

In the March 2019 quarter, the company successfully wrapped up commissioning of Stage 1 at the Altura Lithium Mine as well as a declaration of commercial lithium production. Moreover, Altura Mining Limited raised $24.5 million before issue costs by placement to the institutional and sophisticated investors. The company further pointed out that the crusher production in March 2019 amounted to 222,707 tonnes, which was in accordance with the prior quarter.

The net cash used in the operating activities for the period amounted to $0.673 million after settling payments for production, staff costs and administration and corporate costs of $2.197 million, $2.221 million and $0.735 million, respectively.

The current ratio of the company stood at 0.13x in 1H FY19 against the industry median of 1.88x. The company posted asset-to-equity ratio of 3.99x in 1H FY19 as compared to the industry median of 1.68x. The company reported a debt-to-equity ratio of 2.23x in 1H FY19 when compared to the industry median of 0.09x.

The stock of Altura Mining Limited, at market close on 23rd July 2019, was trading at $0.115 per share, reflecting a rise of 4.545%, with a market capitalisation of $233.8 million. The stock has produced returns of 14.58%, -12.00% and -33.33% for the period of one-month, three months, and six-months, respectively.

Pepinnini Lithium Limited (ASX:PNN)

Pepinnini Lithium Limited (ASX: PNN) is involved in the exploration of lithium, copper, nickel and gold. It was officially listed on ASX in 2005. Recently, the company via a release announced that it is going to conduct an Extraordinary General Meeting on 5th September 2019 in South Australia. The principal agendas for the meeting are as follows:

• Resolution 1 – Conversion of Director Loan
• Resolution 2 – Ratification of a previous Issue of Shares
• Resolution 3 – Ratification of a previous Issue of shares and Options
• Resolution 4 – Ratification of a previous Issue of Shares
• Resolution 5 – Ratification of a previous Issue of Shares and Options
• Resolution 6 – Approval of the Issue of Options
• Resolution 7 – Approval of the Issue of Options

As per the release dated 16th July 2019, the company reported the results of a study of the brine, which was conducted at its Rincon, Incahuasi and Pular projects. In addition, the brine sample results from Incahuasi indicated a considerable amount of calcium concentration, and Rincon brine indicated a substantial amount of sulphate concentration.

In the quarter ended March 2019, the company reported the Pular Project’s brine resource restated to contain 91,000 tonnes Measured and 82,000 tonnes Inferred LCE and 1.7 million tonnes Measured and 1.6 million tonnes Inferred Potash. The company successfully finished the private placement and entitlement issue, which was fully underwritten and raised $1.5 million before costs. The net cash used in the operating activities for the period amounted to $0.303 million, including the exploration and evaluation expenses of $0.161 million.

The company reported a current ratio of 2.18x in 1H FY19 as compared to the industry median of 1.88x. This indicates that PNN is well positioned to meet its short-term obligations as compared to the broader industry. The asset-to-equity ratio stood at 1.02x in 1H FY19 against the industry median of 1.68x. The company posted debt-to-equity ratio of 0.01x in 1H FY19 as compared to the industry median of 0.09x.

The stock of Pepinnini Lithium Limited, at market close on 23rd July 2019, was trading at $0.003 per share, with a market capitalisation of $3.71 million. The stock has produced returns of 75.00% and -12.50% for the one-month and three month period, respectively.

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