Auriant Mining

OMX: AUR

SEK576.1m market cap

SEK5.84 last close

Auriant Mining is a Swedish junior gold mining company focused on Russia. It has two producing mines (Tardan and Solcocon), one advanced exploration property (Kara-Beldyr) and one early stage exploration property (Uzhunzhul).

Investment summary

Auriant’s Q220 financial results were reported in the context of known production of 243kg. While this was 12.6% less than in Q120, some degree of moderation was inevitable as the company shifted from processing high-grade ore in January and February to average-grade ore in the following months. In addition, the usual contribution from Solcocon (which is always weather dependent, but which usually begins in Q2) has, this year, been delayed until Q3. Finally, whereas there was an over-sale of 39kg (1,247oz) of gold relative to production in Q1, there was an under-sale of 23kg (748oz) in Q2. Nevertheless, both throughput and costs were consistent with the smooth running of the new carbon-in-leach plant at Tardan and the effect of COVID-19 on operations has, to date, remained minimal. In combination with our updated gold prices, we have upgraded both our FY20 forecasts (see Exhibit 1) and our valuation of the company.

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2018A 17.4 (1.7) (10.2) (10.8) N/A 15.5
2019A 29.8 7.2 (2.2) (1.2) N/A 7.2
2020E 57.4 32.9 19.0 15.3 4.4 2.4
2021E 53.9 32.9 24.6 15.6 4.3 2.5
Industry outlook

On the basis that Auriant raises US$40m in equity at SEK4.40/share, we estimate that it is capable of generating average cash flows of US$49.4m and EPS of 23.0c pa in the period FY25–33. Discounted at 10% pa, we value the resulting (maximum potential) stream of dividends to shareholders at US$0.83/share. This almost doubles to US$1.45/share in the event of a future long-term (real) gold price of US$1,705/oz.

Last updated on 24/09/2020
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Share price graph
Balance sheet
Forecast net debt (US$m) 58.6
Forecast gearing ratio (%) 495
Price performance
%
1m
3m
12m
Actual (15.4) 21.4 65.0
Relative* (15.9) 9.6 44.4
52-week high/low SEK7.2/SEK3.0
*% relative to local index
Key management
Peter Daresbury Chairman
Danilo Lange CEO
Katerina Popova Head of PR&IR