In a June 17 research note, BMO Capital Markets analyst Edward Sterck reported that South32 Ltd. (S32:ASX; S32:LSE) published a mineral resource for its Taylor deposit in Arizona.
Sterck noted the new JORC compliant resource is generally similar to the NI 43-101 compliant one completed by Arizona Mining, the previous property owner, in January 2018, but with three differences, which he specified.
One is that the new resource encompasses more tons, 155 million tons (155 Mt) versus 145 Mt.
Secondly, grades in the new resource are lower across the board. When comparing South32 and Arizona Mining's resources, grades, respectively, averaged 3.39% versus 4.1% zinc, 3.67% versus 4.4% lead and 69 grams per ton (69 g/t) versus 78 g/t silver.
Finally, the new resource reflects a 10% reduction in contained metal on a zinc equivalent basis when compared to Arizona Mining's resource, despite the same cutoff grade of about 4%.
Sterck indicated that the prefeasibility study for Taylor is still expected before June 2020.
In other news, noted Sterck, South32 also released an updated resource estimate for its Illawarra met coal project. Resources there have dropped to 22 Mt from 114 Mt because the company "relinquished a portion of the license area."
BMO has a Market Perform rating on South32.
[NLINSERT]Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
Disclosures from BMO Capital Markets, South32, June 17, 2019
IMPORTANT DISCLOSURES
Analyst's Certification
I, Edward Sterck, hereby certify that the views expressed in this report accurately reflect our personal views about the subject securities or issuers. I also certify that no part of our compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Analysts employed by BMO Nesbitt Burns Inc. and/or BMO Capital Markets Limited are not registered as research analysts with FINRA. These analysts may not be associated persons of BMO Capital Markets Corp. and therefore may not be subject to the FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.
Company Specific Disclosures
Disclosure 9C: BMO Capital Markets makes a market in South32 in Europe.
For Important Disclosures on the stocks discussed in this report, please click here.
