Early Market Close Takes Toll on Diggers Presenters

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CONFERENCE CALLER: Trading hours of the Australian Securities Exchange and the tyranny of distance provide a difficult conundrum for Western Australia-based share price watchers.

This is on show this week at the 2017 Diggers & Dealers conference in Perth, where an attentive audience, listening to presentations from potential investment conduits need to wait until the next morning to take advantage of their attendance and what they hear.

The ASX, based in Sydney closes trading at 4.00pm, (2.00pm WA time), which means just over half of the companies on show any day are basically presenting for the next day.

This seemed to work well for two companies, Mustang Resources (ASX: MUS) and Breaker Resources (ASX: BRB), which presented just as the market was closing, or had closed, and were the only Day One Presenters to enjoy a lift in price for the day.

Mustang Resources is developing the Montepuez ruby project in Mozambique, which is producing world-class rubies expected to generate strong cashflow through rough ruby sales.

Mustang recently ramped up ruby recoveries at Montepuez, increasing the project’s ruby inventory by over 70 per cent to approximately 120,000 carats.

Mustang is confident the enlarged ruby inventory will enable it to achieve a 200,000- carat inventory, which the company expects to demonstrate the cashflow potential of the Montepuez ruby project.

Sheffield Resources (ASX: SFX) presented well after the close of play in Sydney, however, it was able to remain steady for the day.

It will be interesting to see how the stock opens tomorrow on the back of managing director Bruce McFadzean’s presentation, which outlined the development of the companies Thunderbird minerals sands mine in northern WA.

Sheffield completed a Bankable Feasibility Study (BFS) at Thunderbird in March that ticked off some impressive figures, including:

A pre-tax NPV10 of $676 million and an IRR of 25 per cent;

EBITDA of $5.1 billion over a long Life of Mine of 42 years, offering leverage to multiple pricing cycles;

Stage 1 capital of $324 million plus $24 million contingency; and

Ore Reserves updated to 680.5 million tonnes at 11.3 per cent heavy mineral (HM) (Proved + Probable);

The updated Ore Reserve supports the project’s 42 year mine life with a very low life-of-mine strip ratio (waste:ore) of 0.78:1 and includes a Proved Ore Reserve category of 235.8 million tonnes at 13.3 per cent HM.

Others to maintain the status quo for the day included Bill Beament-led Northern Star Resources (ASX: NST), bauxite-focused Metro Mining (ASX: MMI), and lithium play Pilbara Minerals (ASX: PLS).

We’re not sure what the market was expecting to here from heavyweights Evolution Mining (ASX: EVN) and Resolute Mining (ASX: RSG) in the afternoon session, but they were marked down accordingly, along with Galaxy Resources (ASX: GXY) and early morning presenters Silver Lake Resources (ASX: SLR) and OceanaGold (ASX: OCG).

Although the opening day blues hit most of the Day One Presenters, it would appear most enjoyed a healthy spike on Friday in anticipation of a big news day, which didn’t happen.