Category: Natural Resources

Wednesday, May 15, 2019

Sierra Metals (SMTS)

SMTS reports first quarter loss. ?

Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico.    
  

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating

• SMTS reports first quarter loss.  SMTS reported a first quarter loss of ($0.01) per share versus earnings of $0.05 per share during the prior year period and our estimate of $0.02 per share.  Adjusted EBITDA amounted to $12.0 million versus $27.4 million during the prior year period and our estimate of $15.4 million.  First quarter results reflected a 14% reduction in throughput at the Yauricocha mine due to a worker’s strike that resulted in 12 days of lost production and slower than expected ramp up of throughput at the Bolivar and Cusi mines.
• Updating estimates.  Management reaffirmed its 2019 production guidance and we think there may be opportunities for Sierra to regain some lost ground during the remainder of the year.  While we are making no changes to our respective 2020 EPS and EBITDA estimates of $0.30 and $138.7 mill…
  

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Wednesday, May 15, 2019

Sierra Metals (SMTS)

Will Sierra Regain Momentum Following a Slow Start to the Year?

Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico.   

  

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating.

• SMTS reports first quarter loss.  SMTS reported a first quarter loss of ($0.01) per share versus earnings of $0.05 per share during the prior year period and our estimate of $0.02 per share.  Adjusted EBITDA amounted to $12.0 million versus $27.4 million during the prior year period and our estimate of $15.4 million.  First quarter results reflected a 14% reduction in throughput at the Yauricocha mine due to a worker’s strike that resulted in 12 days of lost production and slower than expected ramp up of throughput at the Bolivar and Cusi mines.
• Updating estimates.  Management reaffirmed its 2019 production guidance and we think there may be opportunities for Sierra to regain some lost ground during the remainder of the year.  While we are making no changes to our respective 2020 EPS and EBITDA estimates of $0.30 and $138.7 million, we are trimm… 

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NOTE: investment decisions should not be based upon the content of
this research summary.  Proper due diligence is required before
making any investment decision. 

Monday, May 13, 2019

Energy Fuels, Inc. (UUUU)

Lowering Rating on Uncertain Outlook.

Energy Fuels Inc together with its subsidiary is engaged in the extraction and recovery of uranium properties in the United States. The company operates in two segments, ISR Uranium and Conventional Uranium. It conducts its ISR activities through its Nichols Ranch Project, located in northeast Wyoming. 

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating.

• Weaker than expected first quarter results.  Energy Fuels reported a first quarter loss of $12.1 million, or ($0.13) per share, compared to a loss of $11.5 million, or ($0.14) per share during the prior year period.  We had forecast a loss of $2.4 million, or ($0.03) per share.  The variance to our estimate is attributed to lower sales.
• Updating estimates.  We now project a 2019 loss of ($0.20) compared to our prior EPS estimate of $0.03.  We have also lowered our 2020 EPS and EBITDA estimates to $0.06 and $14.8 million, from $0.12 and $26.6 million, respectively.  Revisions to our estimates are driven by lower sales of uranium and vanadium and a reduc… 

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Monday, May 13, 2019

Avino Silver & Gold Mines Ltd. (ASM)

Resilience In A Challenging Operating Environment.

Avino Silver & Gold Mines Ltd. engages in the acquisition, exploration, development, production, and sale of mineral properties in Canada and Mexico. It primarily explores for gold, silver, copper, zinc, and lead deposits.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating. 

• ASM reports first quarter loss.  Avino Silver & Gold Mines Ltd. reported a first quarter 2019 loss of $610 thousand, or ($0.01) per share, compared to earnings of $818 thousand, or $0.02 per share during the prior year period and our estimate of $0.00 per share.  First quarter results were negatively impacted by lower grades, declining recoveries at the San Gonzalo mine and seven days of lost production while upgrades to the crushing circuit were completed at the Avino mill.  First quarter EBITDA were $0.0 million, compared to $1.5 million generated during the first quarter of 2018. 
• Updating estimates.  We are lowering our 2019 EBITDA and EPS estimates to $0.03 and $7.5 million from $0.07 and $11.6 million, respectively.  Revisions to our estimates reflect lower commodity gra… 

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Tuesday, May 7, 2019

Endeavour Silver Corporation (EXK)

Challenging Times; Investment Rating Lowered to Market Perform.

Endeavour Silver Corp is a precious metal mining company. The company is primarily engaged in silver mining and owns three high-grade, underground, silver-gold mines in Mexico. Its other business activities include acquisition, exploration, development, extraction, processing, refining and reclamation.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating.

• Weaker than expected first quarter.  Endeavour reported a first quarter loss of $13.3 million, or ($0.10) per share, compared to earnings of $2.3 million, or $0.02 per share, during the prior year period.  We had forecasted a loss of $780 thousand, or ($0.01) per share.  The variance to our estimate is attributed to increased costs associated with continued challenges at the Guanacevi mine and underperformance at the Bolanitos and El Compas mines.  All-in sustaining costs increased 36.6% due to lower production and higher cash operating costs, inventory write-downs, employee severance payments, exploration and general and administrative expenses.
• Lowering estimates.  We now forecast a 2019 loss of ($0.18) per share and EBITDA of $8.6 million, compared to our prior estimates of $0.04 per share and EBITDA of $36.6 million, respectively.  Additionally, we have low… 

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Friday, May 3, 2019

Aurania Resources Ltd. (ARU:CA)

Putting Crunchy Hill Results In Perspective.

Aurania Resources Ltd. is a Canada-based junior mining exploration company engaged in the identification, evaluation, acquisition, and exploration of mineral property interests, with a focus on precious metals and copper. Its flagship asset, The Lost Cities-Cutucu Project, is in southeastern Ecuador in the Province of Morona-Santiago. The company also has several minor projects in Switzerland.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating.

• Scout drilling at Crunchy Hill
  nearing completion.  Seven bore holes have been completed for a total of 2,600 meters.  While minerals collected from the initial drilling confirmed indications of an epithermal gold-silver system, no significant vein systems have been intersected to date.  An eighth hole is being drilled with a ninth being considered before moving on to the next target.  Therefore, it may be premature to render a final verdict on Crunchy Hill’s potential.
• Assay results.  Assay results have been received for the first hole, in which 8 meters returned 1.1 grams per tonne of silver and 13.2 meters returned 1.8 grams per tonne of silver but neither returned much in the way of gold.  Core sampling has been completed up to and including the si…

  
  
  
  
  
  

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Friday, May 3, 2019

Coeur Mining (CDE)

Should Investors Count On A Better Second Half?

Coeur Mining Inc is a metals producer focused on mining precious minerals in the Americas. The company is involved on the discovery and mining of gold and silver, and generates the vast majority of revenue from the sale of these precious metals. The operating mines of company are palmarejo, rochester, wharf, and kensington.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating. 

• EBITDA in line with our estimate.  Coeur Mining reported adjusted EBITDA of $26.1 million versus $49.2 million during the first quarter of 2018 and our estimate of $26.0 million.  The company reported a first quarter adjusted loss of ($0.11) per share, compared to $0.00 during the prior year period and our estimate of ($0.07).
• Updating estimates.  We now forecast a 2019 loss of ($0.35) per share and EBITDA of $146.8 million versus our previous estimates of ($0.22) and $156.0 million.  In 2020, we project a loss of ($0.05) per share and EBITDA of $205.1 mill… 

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Friday, April 26, 2019

Coeur Mining (CDE)

Resetting Expectations: Will Our Estimates Prove To Be Conservative?

Coeur Mining Inc is a metals producer focused on mining precious minerals in the Americas. The company is involved on the discovery and mining of gold and silver, and generates the vast majority of revenue from the sale of these precious metals. The operating mines of company are palmarejo, rochester, wharf, and kensington.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating. 

• Updating estimates.  We are lowering our 2019 EPS and EBITDA estimates to
  ($0.22) and $156.0 million, from $0.11 and $160.4 million, respectively. 
  We have revised our estimates to reflect significantly higher non-cash
  amortization expense and increased our 2019 revenue estimates based on greater
  metal sales.
• We expect steady improvement.  We believe the Coeur’s financial results could improve
  throughout the year as Silvertip production continues to ramp up, the Rochester
  mine benefits from the installation of high-pressure grinding roll technology
  to improve recoveries, and the Kensi… 

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Tuesday, April 23, 2019

Aurania Resources Ltd. (ARU:CA)

Will A New Chief Financial Officer and Loan Commitment Increase Momentum?

Aurania Resources Ltd. is a Canada-based junior mining exploration company engaged in the identification, evaluation, acquisition, and exploration of mineral property interests, with a focus on precious metals and copper. Its flagship asset, The Lost Cities-Cutucu Project, is in southeastern Ecuador in the Province of Morona-Santiago. The company also has several minor projects in Switzerland.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating.

• Aurania appoints new Chief Financial Officer.  Aurania appointed
  Mr. Tony Wood as Chief Financial Officer.  Mr. Wood has completed ~$1
  billion in financing and M&A transactions in the mining industry.  Mr.
  Wood has been consulting for the company on a part-time basis since January
  2019.  Mr. Wood earned a B.Sc. degree from the University of Lancaster,
  United Kingdom (U.K), and is a qualified Chartered Accountant in the U.K. and
  Canada.  We believe Mr. Wood’s experience will enhance the company’s
  strategic development and fundraising capabilities. 
• New loan commitment enhances financial flexibility.  Aurania also announced a
  loan agreement with Dr. Keith Barron, Aurania’s Chairman and CEO, providing up
  to US$3,000,000 in financing.  In our view, the new loan commitment
  provides financial flexibility to expand and/or accelerate the comp…
  

  
  
  
  
  

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Should the U.S. Uranium Industry Be Rescued?

(Note: companies that could be impacted by the content of this article are listed at the base of the story (desktop version). This article uses third-party references to provide a bullish, bearish and balanced point of view; sources listed in the “Balanced” section)

On April 14, 2019, the U.S. Department of Commerce (DOC) submitted a report to the White House on their investigation into the impacts of uranium imports on U.S. national security.  The President has up to 90 days from April 14 to act on the DOC’s recommendations.  While the report remains confidential, supporters and foes of trade sanctions that could protect the U.S. uranium industry from imports of uranium await the outcome.  Should trade actions be taken to protect the U.S. uranium industry from imports?

Wednesday, April 17, 2019

Sierra Metals (SMTS)

How Does The Worker Strike Affect 2019 Production Expectations?

Sierra Metals Inc is a precious and base metals producer in Latin America. The company acquires, explores, extracts, and produces mineral concentrates consisting of silver, copper, lead, zinc and gold in Mexico and Peru. Its activity includes the operation of the Yauricocha Mine in Peru, and the Bolivar and Cusi mines in Mexico.  

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating.

• SMTS reports first quarter production results.  Compared with the prior year period, first quarter
  production of silver increased 16.3% to 691 thousand ounces, lead production
  increased 10.2% to 6.9 million pounds and gold production increased 1.7% to
  1,986 ounces.  Copper and zinc production declined 4.4% and 9.8% to 7.7
  million and 16.4 million pounds, respectively.  Compared to the fourth
  quarter of 2018, production of copper, lead, gold, zinc and silver fell 13.4%,
  12.5%, 7.1%, 6.4% and 1.4%, respectively.  The Yauricocha mine experienced
  a 14% reduction in throughput during the first quarter due to a worker’s strike
  that resulted in 12 days of lost production.  Management has maintained
  its 2019 production guidance range and we think there may be opportunities to
  gain lost ground throughout the remainder of the year.
• Updating estimates.  While we are making no changes to our 2020 EPS or
  EBITDA estimates, we are trimming our 2019 EPS and EBITDA estimates to $0.19
  and $101.2 million from $0.20 and $103.9 million, respectively.  Our 2019
  revi…
  

  
  
  
  
  

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NOTE: investment decisions should not be based upon the content of
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Wednesday, April 17, 2019

Avino Silver & Gold Mines Ltd. (ASM)

Bralorne Exploration Provides Some Reasons for Optimism.

Avino Silver & Gold Mines Ltd. engages in the acquisition, exploration, development, production, and sale of mineral properties in Canada and Mexico. It primarily explores for gold, silver, copper, zinc, and lead deposits.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating. 

• ASM reports first quarter 2019 production results.  Avino Silver & Gold Mines Ltd. reported first
  quarter production of 615,019 silver equivalent ounces representing a 6.4%
  decline versus the prior year period and a 14.6% decrease relative to the
  fourth quarter of 2018.  First quarter production results were negatively
  impacted by lower grades, declining recoveries at the San Gonzalo mine and
  seven days of lost production while upgrades to the crushing circuit were
  completed at the Avino mill. 
• Updating estimates.  Based on modestly lower than expected first quarter
  production, we are reducing our full year 2019 EPS and EBITDA estimates to
  $0.06 and $10.6 million from $0.07 and $11.8 million, respectively.  Our
  2020 estimates have been lowered to $0.09 and $13.5 million from $0.10 and
  $14.5 million, respec…
  

  
  
  
  
  

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Monday, April 15, 2019

Endeavour Silver Corporation (EXK)

Waiting for the Turnaround at Guanacevi.

Endeavour Silver Corp is a precious metal mining company. The company is primarily engaged in silver mining and owns three high-grade, underground, silver-gold mines in Mexico. Its other business activities include acquisition, exploration, development, extraction, processing, refining and reclamation.

Mark Reichman, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to full report for price target, fundamental analysis and rating. 

• EXK reports first quarter
  production results.  Compared to the prior year period, first quarter silver and
  gold production declined 20.7% and 23.9% to 1,071,355 ounces and 10,055 ounces,
  respectively.  The decline was attributed to lower silver grades at the
  Guanacevi mine and anticipated production declines at the Bolanitos and El Cubo
  mines.  Compared to the fourth quarter of 2018, first quarter silver and
  gold production declined 22.7% and 23.3%, respectively.
• Updating estimates.  While our 2020 estimates are unchanged, we are
  lowering our 2019 EPS and EBITDA estimates to $0.04 and $36.6 million from
  $0.05 and $40.1 million, respectively.  Our… 

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NOTE: investment decisions should not be based upon the content of
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