Auriant Mining

OMX: AUR

SEK345.3m market cap

SEK3.5 last close

Auriant is a Swedish gold company, focusing on exploration and production in Russia. It has two producing mines (Tardan in Tyva and Solcocon in Zabaikalsky), one advanced exploration property (Kara-Beldyr in Tyva) and one early-stage exploration property (Uzhunzhul in Khakassia).

Investment summary

After five years of gold production via other methods, Auriant’s Tardan plant has been remodelled to a single carbon-in-leach process, which is forecast to improve metallurgical recoveries by c 31% and halve total cash costs to c US$523/oz from October (subject to final tests). Simultaneously, it is completing a DFS on Kara-Beldyr. Combined, the two are expected to achieve management’s goal of 3t (96.5koz) of gold output pa from FY22 (cf guidance of 0.94t in FY19e).

Y/E Dec
Revenue (US$m)
EBITDA (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 33.5 8.8 (3.1) (5.7) N/A 1.3
2018A 17.4 (1.6) (10.2) (10.8) N/A 8.4
2019E 45.1 19.7 9.7 7.6 4.8 2.6
2020E 45.1 21.2 12.9 8.2 4.4 2.7
Industry outlook

Auriant raised US$7.1m via the exercise of warrants in 2018. On the basis that it raises an additional US$13.8m in equity at a price of SEK2.14/share, we estimate that it is capable of generating average cash flows of US$37.3m and EPS of 20.0c pa in the period FY25–33. Discounted at 10% pa, we value the resulting (maximum potential) stream of dividends to shareholders at US$0.82/share. FY19 forecasts remain under review. In the meantime, Auriant is disputing the findings of Rosprirodnadzor’s inspection (reported 20 August).

Last updated on 04/12/2019
Share price graph
Balance sheet
Forecast net debt (US$m) 71.8
Forecast gearing ratio (%) 312
Price performance
%
1m
3m
12m
Actual (3.9) (2.2) 63.6
Relative* (3.4) (9.3) 38.1
52-week high/low SEK4.0/SEK2.0
*% relative to local index
Key management
Peter Daresbury Chairman
Sergey Ustimenko CEO
Katerina Popova Head of PR&IR