AQG with US$215m cash balance: Credit Suisse rates AQG as Outperform

February 8th, 2017

Credit Suisse rates AQG as Outperform
2016 net profit was in line with expectations and there was no dividend. The cash balance has been reconfirmed at US$215m.
Target price is $5.30 Current Price is $2.73 Difference: $2.57
If AQG meets the Credit Suisse target it will return approximately 94% (excluding dividends, fees and charges).
Current consensus price target is $4.17, suggesting upside of 52.7%(ex-dividends)
The company’s fiscal year ends in December.
Forecast for FY17:
Credit Suisse forecasts a full year FY17 dividend of 0.00 cents and EPS of 17.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.78.
How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 5.5, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 49.6.
Forecast for FY18:
Credit Suisse forecasts a full year FY18 dividend of 10.78 cents and EPS of 18.60 cents.
At the last closing share price the estimated dividend yield is 3.95%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.68.
How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 11.9, implying annual growth of 116.4%.
Current consensus DPS estimate is 3.5, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 22.9.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

Investigator Resources: High Grade Intercepts including 10m @ 2,708g/t silver from 118m

January 18th, 2017

New high-grade silver intercepts to support resource upgrade and scoping study at Investigator’s Paris Project in South Australia

High-grade shallow silver intersections reported across central Paris from detailed drilling (of 20% of resource area) completed late in 2016.
All of the 50 vertical RCP holes reported assays greater than 30g/t silver; Highlights include:
– 52m @ 468g/t silver from 10m (PPRC416)
– 10m @ 2,708g/t silver from 118m (PPRC368)
– 17m @ 502g/t silver from 81m (PPRC378)
– 8m @ 561g/t silver from 49m (PPRC394)
New results support the aim of upgrading the Inferred Paris Mineral Resource estimate (33Moz silver; 8.8Mt @ 116g/t silver; 50g/t silver lower cut-off).
Assays awaited for additional six diamond twins of RCP holes to provide further assessments, expected in late-January.
Revised Paris silver resource estimate expected during the first Quarter of 2017.
Samples from the recent drilling will be used for metallurgical testing as part of the Paris scoping study, expected to be completed by mid-2017.

Investigator Resources Managing Director, John Anderson commented, “The strong results of the infill drilling add confidence in the range and extent of high silver grades for the Paris project. The closer-spaced drilling is also encouragingly supporting our understanding of the geological framework, geometry and scope of the silver mineralisation.

We look forward to incorporating the new results into the forthcoming re-estimate of the silver resource at Paris ahead of scoping studies later in the year.”

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Six Hundred Million Ounces of Silver to be Consumed in Photovoltaics and Ethylene Oxide Production Through 2020

December 16th, 2016

http://www.silverinstitute.org/site/wp-content/uploads/2016/12/EOSilverDemandReportDec2016.pdf

In 2015, of the 1,170 million ounces (Moz) of physical silver consumed, 589Moz were used for
industrial fabrication, equivalent to 50% of total physical demand.
Two of the most everyday
industrial uses for silver are as a catalyst for the production of ethylene oxide and in
photovoltaic (PV) cells (more commonly known as solar panels). Ethylene oxide (EO) is a vital
raw material for the production of ethylene glycol, which in turn is used in the production of
antifreeze coolants and polyethylene terephthalate (PET); a resin of the polyester family used in
fibres for clothing as well as plastic bottles and food containers. These two expanding industries
will drive increases in EO capacity and, correspondingly, demand for silver.
On the other hand, the number of solar panel installations is forecasted to rise steadily in the
coming years. A combination of carbon emissions legislation, government policies and a
decrease in the cost per gigawatt (GW) of electricity generated using PV will increase the
number of solar panel and therefore silver demand.

This paper will therefore look into silver demand from the EO and the PV industry separately,and give forecasts on respective silver demand from 2016 to 2020.