Asiamet Resources (ARS LN) has released an update on its feasibility study progress. 45 of 73 holes covering 4.5km out of a planned 6.5km have been drilled in the current programme and with this now well advanced ARS is beginning the portion of the study relating to mine engineering and infrastructure. These components will be completed by Australian Mine Design and Development (AMDAD) and PT Ground Risk Management (GRM). Both have extensive experience of similar projects in the region with GRM completing over 100 assessments in Indonesia in the last eight years with more than half in the Kalimantan region where ARS’ project is located. PT Lorax focusing on the environmental, geoscience and hydrological aspects of the project has just completed its field activity relating to the dry season.
ARS continues, in our view, to make strong progress towards completion of the feasibility study which we believe will significantly de-risk the project and demonstrate its low cost potential.
We reiterate our Speculative Buy Recommendation and target price of 6.2p/sh.
Fresnillo (FRES LN) has released robust production numbers for 3Q 2016 with 11.8moz silver produced up 6.7% YoY although down 9.4% QoQ. The quarterly weakness was driven by expected lower grades at the Saucito mine combined with unexpectedly weak grades at Fresnillo which is likely to impact costs in the quarter negatively. This was, however, offset by the ramp up at San Julian which drove the YoY production gain and FRES remains on track to meet its full year production guidance of 49-51moz silver.
Gold production of 220koz was up strongly by 21% YoY and 10% QoQ as a result of the higher contribution from Herradura and Noche Buena. FRES raised gold production guidance at its interims earlier this year to 850-870koz and is on track to meet this higher guidance.