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Mining
Want to know how March quarter reporting season could unfold BEFORE the reports come out? Look no further.
It’s not just the big boys worth watching in this reporting season, with a host of smaller players on the cards over the next week.
With around seven days to go (and the ANZAC Day public holiday wedged in between) which of the more obscure producers are on the radar of Canaccord’s resources analysts?
Reporting Date: TBA
Market Cap: $450m
What the experts say
Canaccord Genuity has picked out Metals X as the best performing miner of the March quarter, seeing a 22% bump in its share price on the back of a stunning run in tin prices.
Helped by supply shortages caused by shutdowns in Myanmar and sticky demand, the spice metal has just one production exposure on the ASX and that’s MLX, half-owner of the Renison Bell mine in Tasmania.
Canaccord has a hold and 39c price target on MLX, up from 29c previously, though its shares have already run to 50c a pop.
Analysts’ March Quarter Forecasts
Production and sales — Tin metal: 2700t (CG).
Pricing: N/A.
Operating cost: US$15,262/t (CG).
Reporting Date: April 30
Market Cap: $3.8b
What the experts say
Nickel has been the a tale of woe in 2024 unless you are Indonesian focused Nickel Industries, which has leveraged the country’s hunger for expansion to become one of the world’s largest producers of nickel tonnes in under a decade.
Canaccord recently upped its price target on NIC by 18% after lifting its EBITDA/EV ratio from 5.5x to 6x. It won’t be felt in the March quarterly, but a decision from the LME and Comex to ban Russian metal from their warehouses has also contributed to a rebound in nickel pricing back beyond US$19,000/t.
Despite the positivity around its growth options, Canaccord says mine approval timelines could weigh on Nickel Industries’ earnings in the March quarter.
“NIC expected EBITDA in the range of US$65-75m due to impacts from delays to licence approvals,” the brokers said.
“This impacted NIC’s mine and also its RKEF operations, which were forced to process higher cost stockpiles. We anticipate this opening up in the JunQ’24 once approvals have been granted.”
Analysts’ March Quarter Forecasts
Production and sales — RKEF nickel: 38,100t (CG), 47,800t (cons), HNC HPAL: 18,200t (CG), 17,000t (cons).
Pricing: N/A.
Operating cost: N/A (CG).
Reporting Date: TBC
Market Cap: $330m
What the experts say
Core Lithium started the quarter by announcing it would stop mining at its Finniss lithium operation in the Northern Territory and only process stockpiles.
It came after a precipitous fall in the lithium price which has, at least slightly, unwound.
The advantage should be lower costs, with mining contractors out of the equation, but analysts still expect to see cash fly out the door at Core, with Canaccord Genuity predicting its nest egg slid from $125m at December 31 to $61m at March 31.
Analysts’ March Quarter Forecasts
Production and sales — Spodumene: 19,000t (CG), 19,000t (cons).
Pricing: US$950/t (CG).
Operating cost: US$681/t (CG).
Reporting Date: April 30
Market Cap: $385m
What the experts say
Sayona Mining has also suffered the wrath of battery metals markets since opening its North American Lithium operation last year, losing money hand over fist in the December quarter.
But it decided to press on and continue with its growth plans after an operational review at the start of March which showed recoveries at the Quebec mine and plant were improving.
Canaccord’s Reg Spencer has a 6c target and spec buy rating on Sayona, as well as a 60c target and spec buy rating on its 25% JV partner Piedmont Lithium (ASX:PLL).
He said the ramp up at NAL was running in line with expectations, with January and February production at a quarterly run rate of 37,000t.
“We model higher sales of 53kt due to delayed DecQ shipments at an ASP of US$885/t with ~50% delivered into the PLL offtake. Our FY24E EBITDA remains mostly unchanged on MtM MarQ pricing with revisions a function of accounting changes in 1HFY24,” Spencer said.
Canaccord thinks Sayona’s production costs will be down 24% on the US$1103/t seen in the December quarter.
Analysts’ March Quarter Forecasts
Production — Spodumene: 38,000t (CG).
Pricing: US$950/t (CG).
Operating cost: US$836/t (CG).
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