ASX Gold and Battery Metal Players Shine in December Quarter  

  • January 23, 2021 01:05 AM AEDT
  • Kunal Sawhney
    Kunal Sawhney
    CEO Kunal Sawhney
    2782 Posts

    Kunal Sawhney is founder & CEO at Kalkine and is a richly experienced and accomplished financial professional with a wealth of knowledge in the Australian Equities Market. Kunal obtained a Master of Business Administration degree from University of T...

ASX Gold and Battery Metal Players Shine in December Quarter  

Summary

  • Largest by number of companies, the metals & mining sector supports the national economy and infrastructure development.
  • Gold miners Northern Star (ASX:NST) and Saracen Mineral Holdings (ASX:SAR) have reported a strong December quarter.
  • Syrah Resources (ASX:SYR) has also made significant progress with the completion of a BFS for the US-based Vidalia project.

The Australian metals & mining sector is the most prominent business segment in terms of number of companies. The sector includes numerous world's largest resource players, mid-tier producers and junior miners.

Discussed below are three players from the metals & mining sector that have recently released their performance update for the last quarter of 2020. Their endeavours are focused on gold and battery metals.

Amid the pandemic, there has been significant growth in the gold and battery metal sectors. With rising awareness of renewable energy and electric mobility, demand for battery metals is registering strong growth. Meanwhile, gold surged to a record level of US$2,070 an ounce in August 2020, highlighting strong investor interest towards this safe haven.

In the backdrop, let us skim through the quarterly performance of these ASX-listed players. 

Northern Star Resources Limited (ASX:NST)

Northern Star Resources (ASX:NST) has delivered a strong performance in December 2020 quarter. The Company registered production at the top end of the guidance, robust underlying free cash flow and significant debt reduction.

Highlights for the three-month period ended 31 December 2020:

  • Guidance range for gold sales for the quarter was 226,000 – 254,000oz, and the Company’s sales hit the upper guidance limit, totalling 252,899oz. Gold sales for H1 were also in line with the FY21 guidance range.
  • Group all-in costs were A$1,825/oz with a significant material movement increase of 22 per cent compared to the previous quarter at the KCGM open pit.
  • Average realised price of A$2,295/oz was achieved for the quarter, including 48% of gold sold into hedged positions, reducing hedge book to ~10% of the next three years’ production.
  • The strong free cash flow of A$93 million was reported even after investing ~A$63 million in exploration and growth capital.
  • Operating mine cashflow stood at A$290 million, unaudited NPAT reached ~A$75-85 million and net mine cashflow was A$169 million.
  • By the end of period, cash, bullion, and investments stood at A$372 million after repaying A$125 million of corporate bank debt.
  • Gold sales from the Yandal, KCGM, Kalgoorlie and Pogo gold operations stood at 68,405oz, 58,565oz, 71,731oz and 54,198oz, respectively.

On 22 January 2021, the stock traded at A$13.430, down 1.396% from its previous close. The Company has a market capitalisation of A$10.09 billion.

Also Read: How is the Gold Market Unfolding for ASX-listed Gold Stocks in 2021?

Saracen Mineral Holdings Limited (ASX:SAR)

ASX-listed gold explorer Saracen Mineral Holdings (ASX:SAR) has also reported a strong quarter with on-track performance towards meeting the guidance range for FY21.

  • Group gold production stood at 155,122oz at an AISC of A$1,224/oz.
  • KCGM produced 59,446oz, Carosue Dam delivered 58,338oz, and Thunderbox produced 37,338oz at an AISC of A$1,324/oz, A$1,285/oz and A$870/oz, respectively.
  • The Company reported total gold sales of 150,163oz at an average price of A$2,322/oz for the quarter.
  • Cash and bullion generation was noted at A$466 million even after paying A$39 million in tax, A$38 million in debt repayment, and A$113 million in growth capital and exploration investment.
  • Half-year unaudited NPAT stood at A$115 million - A$125 million.
  • Net cash of A$183 million was generated with a debt of A$283 million.
  • Average realised price of A$2,168/oz was achieved, including a hedge book of 383,100oz.

Also See: Saracen-Northern Star Merger Deal Grab Headlines, Here’s Why?

On 22 January 2021, the stock traded at A$5.070, down 1.362% from its previous close. The Company has a market capitalisation of A$5.69 billion.

Syrah Resources Limited (ASX:SYR)

Australia-based industrial minerals and technology company, Syrah Resources Limited (ASX: SYR) has also released its December quarter report. It has also reported its progress towards becoming a vertically integrated producer of natural graphite Active Anode Material (AAM).

  • A Bank Feasibility Study (BFS) was conducted at its Vidalia facility during the last quarter that highlighted a strong case for production with robust economics.

  • The Company also inked a memorandum of understanding with Solar Century Africa Limited for a solar and battery project to provide economic benefits to its Balama project.
  • It is assessing a potential restart of its Balama project after the shut down in March 2020 due to COVID restrictions.
  • The Company boosted its balance sheet with the completion of a share placement of A$56 million and a share purchase plan of A$12 million.
  • At the end of the quarter, it had a cash balance of US$75 million.

Also Read: Syrah Resources (ASX: SYR) Completes A$56Mn Institutional Placement

On 22 January 2021, the stock traded at A$1.310, up 1.158% from its previous close. The Company has a market capitalisation of A$617.82 million.

 


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