Saracen Mineral Holdings Limited Makes A Record Production With Low Cost And A Strong Free Cash Flow

  • Oct 16, 2018 AEDT
  • Team Kalkine
Saracen Mineral Holdings Limited Makes A Record Production With Low Cost And A Strong Free Cash Flow

Saracen Mineral Holdings Limited (ASX: SAR) is happy to announce the strong September quarter report where the company’s plan regarding the growth strategy with respect to inventory, production, and cash flow is proceeding. The company has made a record in the production of 88,940oz this quarter at AISC of A$993/oz. As a result of this performance in production, the company’s net cash and cash equivalent has gone up to A$131 million from A$118.3 million even though the company has made expenditure worth A$38.9 million towards growth and exploration during this period. It was previously stated that a budget of A$60 million was to be used for exploration in this financial year. However, the company has just used A$9.9 million out of the total budget sanctioned for this year. Thus, it is meeting the expectations of the company. The director of the company Mr. Raleigh Finlayson says that there is a consistency in the growth strategy of the company. As per Mr. Finlayson, the company is continuing to meet the growth objectives on every front. This can be clearly seen through the performance. The company has increased the production guidance for FY19 and the results are in line with the budget supporting it. For FY19, the company is planning to ramp up the exploration program worth A$60 million. This increase in the expenditure may lead to an increase in the inventory by 400,000oz a year. There have been substantial changes in various categories like health and safety, production, financials, discovery and growth and corporate appointments. This quarter the Lost Time Injury Frequency Rate (LTIFR) has gone down 0.4. The gold sales of 86,623 oz for the quarter has generated revenue worth A$142 million. Hedging was made against the gold of 272,400oz with an average delivery price of A$1743/oz. There was an increase in 20% of the ore reserves even though there was a depletion of 348,000oz. Tony Kiernan, the experienced company director has been appointed as non-executive chair replacing Geoff Clifford who retired from the chair and is currently the member non-executive board members. 

The company throughout its journey has shown a positive performance of 2225.43%. The 6 months, 1 year, 5 years, 10 years performance report are 18.11%, 53.62%, 890.07%, and 3045.35%, respectively. For the period ended 30 June 2018, the company has made a total comprehensive income of A$78.194 million. The company holds a total asset worth A$523.224 million and a total liability of A$142.060 million showing the company has a potential to pay its long-term obligations. Also, the total current asset with the company is worth A$163.126 million and total current liabilities of the company is worth A$142.06 million indicating that the company can even clear its short-term obligations. The total shareholder's equity is worth A$381.164 million. The company has generated A$191.425 million from its operating activities which have improved as compared to the previous year. The company has invested in the purchase of plant, equipment and in developing asset worth A$121.617 million which was the major investment made through the investing activities. The cash which was used in the investing activities was A$125.540 million. The net cash flow by financing activities is worth A$163 million. This resulted in the net cash and cash equivalent at the end of the period to be A$99.774 million.

The current market price of the share is A$ 2.230 (AEST 4 pm) with a market capitalization of A$1.74 billion and PE ratio of 22.82x. As per the chart, the moving average convergence divergence line (MACD line) is moving above the signal line indicating the price to be bullish in nature.

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