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clock Created with Sketch. 17/01/18
10:09
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Originally posted by yanlin
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And this from Macquarie this morning.Galaxy Resources Mt Cattlin reaches 200ktpa run rate Impact Mt Cattlin maintains production momentum: Mt Cattlin has achieved a production record of 52,139t of spodumene concentrate. During the quarter the mine achieved an annualised run rate of 209ktpa of concentrate, 4.5% above our steady state production estimates for Mt Cattlin and an 11% lift QoQ. GXY also achieved record sales of 58,094t over the quarter, a lift of 39% QoQ and 16% above our expectations. Recovery continues to improve QoQ lifting ~2% above both the previous quarter and our 4QCY17 estimate.Realised price below expectations: GXY received a realised price of A$1,125/t of spodumene a 6% lift QoQ but below our expectation due to our higher assumed concentrate grade of 6% vs the 5.75% achieved. Concentrate grade appears to have settled around 5.7% and we have carried this forward in our estimates. Lifting recovery to 70-75% remains a key optimisation goal at Mt Cattlin.$34m quarterly Ebitda, debt retired . Mt Cattlin generated quarterly Ebitda of A$34.2m over the quarter falling short of our expectations primarily due to the lower pricing. Cash at bank at the end of the period was also lower than our expectations although still a healthy A$59.7m. We note GXY repaid the last of its BNP debt facility and also made a $3.4m investment in Lepidico (LPD.ASX, Not covered).Development pipeline progressing. Work continues at GXY’s development projects. A 344m exploration hole was completed at Sal De Vida and exploration drilling at James Bay also delivered some impressive extensions.Earnings and target price revision Price catalyst Catalyst : Finding a development partner for Sal de Vida and continued exploration success at James Bay remain key catalysts for GXY over CY18. Lifting recovery at Mt Cattlin will also be an important step in achieving our estimates. Action and recommendation Maintain Neutral . While costs and realised concentrate price were softer than we expected Mt Cattlin production statistics have continued to improve. We expect Mt Cattlin to continue to generate strong cash flows over CY18 which will be key to GXY being able to progress the exploration and development of James Bay and Sal de Vida both of which make a significant contribution to our sum-of-the –part valuation.
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This analysis by Macquarie is fair and expected. $4 is bang on. Not worth much more until SDV and JB are much more advanced than they currently are. People on here saying $5-6 are dreaming.
