Currency in AUD
Last close As at 17/03/2023
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▲ 0.02 (3.03%)
Market capitalisation
AUD392m
Research: Metals & Mining
Alkane upgraded its FY23 guidance for gold production from 55,000–60,000oz to 62,000–70,000oz on 5 January. This follows H123 production at Tomingley of 37,790oz. Alkane has lowered its expected unit costs, to AISC of A$1,550–1,800/oz, down from previous guidance of A$1,650–1,900/oz. Also, approval of the Tomingley Gold Expansion Project, expected in late December, has been deferred until early February.
Alkane Resources |
Production impresses at Tomingley |
Updated guidance |
Metals and mining |
6 January 2023 |
Share price performance Business description
Analysts
Alkane Resources is a research client of Edison Investment Research Limited |
Alkane upgraded its FY23 guidance for gold production from 55,000–60,000oz to 62,000–70,000oz on 5 January. This follows H123 production at Tomingley of 37,790oz. Alkane has lowered its expected unit costs, to AISC of A$1,550–1,800/oz, down from previous guidance of A$1,650–1,900/oz. Also, approval of the Tomingley Gold Expansion Project, expected in late December, has been deferred until early February.
Year end |
Revenue |
PBT* |
EPS* |
DPS |
P/E |
Yield |
06/21 |
127.8 |
46.3 |
5.35 |
0.00 |
10.8 |
N/A |
06/22 |
165.0 |
52.1 |
3.68 |
0.00 |
15.7 |
N/A |
06/23e |
140.1 |
37.8 |
4.45 |
0.00 |
13.0 |
N/A |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles and exceptional items.
Alkane’s Tomingley gold mine produced 37,790oz in H123, ahead of expectations, which prompted the company to update its FY23 guidance to 62,000–70,000oz Au at an AISC of A$1,550–1,800/oz (previously 55,000–60,000oz Au at an AISC of A$1,650–1,900/oz). Furthermore, Alkane announced that its group unaudited cash, bullion and listed investments position, as of December 2022, totalled A$114.1m.
Alkane has two major near-term catalysts in prospect, namely approval of the Tomingley Gold Extension Project and for a maiden resource at its Kaiser prospect, north-west of Boda in the Northern Molong Porphyry Project. The former was expected to receive approval by the end of December 2022. With all information requested from Alkane now provided, the project remains under consideration by the Department of Planning and Environment. However, Alkane anticipates this approval by early February 2023 and the maiden resource at its Kaiser prospect is also expected in February.
The revised guidance for higher production and lower unit costs in FY23 is clearly positive news. At the time of our last note on Alkane, our valuation continued to be underpinned by Tomingley, which we estimated contributed A$0.57/share to Alkane’s valuation. Liquid assets in the form of Alkane’s holdings in Calidus and Genesis contributed a further A$0.06/share. Where before these had been the only two tangible contributors to Alkane’s valuation, they had, at that time, been joined by Boda, which we estimated was worth an immediate US$125.5m (or US$0.21/share or A$0.31/share) to Alkane, either as an in-situ resource or as a development project, albeit with the proviso that the project-based valuation would increase inexorably, both as a result of continued resource increases and upgrades, and as a result of Alkane’s de-risking the project by achieving future development milestones. As such, we calculated that Alkane’s share price was more than 100% covered by the value of tangible assets (compared to 56% previously), with up to A$0.59/share in additional upside available in the form of further exploration success in the Northern Molong Porphyry Project, as well as the ever-increasing probability of the Roswell underground extension project being sanctioned. We will review our forecasts in due course.
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Research: Healthcare
Context Therapeutics has presented a recap of key highlights of 2022 as well as strategic priorities and operational guidance for 2023. The past year saw the company making progress in advancing both of its pipeline assets, presenting encouraging preliminary data from its ongoing studies in metastatic breast cancer (SMILE trial) and endometrial cancer (OATH trial), signing a collaboration agreement with the Menarini Group (ELONA trial) and finalizing its CNDL6 clinical candidate (CTIM-76). Tight capital markets and bearish investor sentiment drove Context to trim non-essential R&D expenses, extending the cash runway into Q124, past several development milestones. We see the additional data readouts from the Phase II OATH (expected in mid-2023) and SMILE (Q423) trials and Phase Ib ELONA trial (Q423) as key upcoming catalysts for Context.
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