Asiamet Resources (ARS LN)
Asiamet Resources (ARS LN) has released Q3 2016 financial results and quarterly operating highlights. ARS is currently progressing towards releasing a PFS on its Beruang Kanan Main project in Indonesia which will most likely produce around 25ktpa of copper at lowest quartile costs. Recent work has been focused on infill drilling to increase the economic confidence of the resource to reserve status. The programme has so far confirmed expectations and demonstrated strong continuity of mineralisation within the resource. Additionally drill holes which have extended the bounds of mineralisation indicate the potential to reduce the stripping ratio of the project and therefore the unit costs. 56 holes for 5.6km have been completed with a further 62 holes for 5.4km planned.
Bulk sampling has also taken place and the results of the subsequent testwork were also positive. The results indicated low energy requirements for crushing which limits capital requirements. Environmental assessment work is currently underway also.
ARS expenses reached US$1.1m during 3Q 2016, of which US$946k related to exploration. For 9mo16 expenditures were US$2.0m with US$1.3m relating to exploration expenditure. Cash at the end of Q3 2016 stood at US$701k.
We reiterate our Speculative Buy recommendation and target price of 6.2p/sh.
Sula Iron & Gold (LON:SULA)
Following the previous announcement by Sula Iron & Gold (SULA LN) relating to its share placement, the company has announced the terms of the open offer. The record date for qualifying shareholders is the 29th November 2016 and for every 13 existing ordinary shares 1 open offer share is available.
The price of 0.21p/sh. is the same as the placing although given the strong performance of the shares since the placing this now represents a 16% discount to the last close versus 7% at the time of the placing. Consequently we believe that the open offer provides an opportunity to buy at an attractive valuation.
We reiterate our Speculative Buy recommendation and 1.8p/sh. target price.