Reporting Season

20 major ASX mining stocks - What to watch for this quarterly reporting season

Tue 09 Jul 24, 9:30am (AEST)
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Key Points

  • It’s quarterly reporting time again, ASX mining and energy exploration companies will soon update investors on their activities during the June quarter
  • The last quarter was a busy one for many exploration companies, particularly the majors, who progressed several key company-making projects
  • Major broker Morgan Stanley has released a research report outlining the key items it will be watching out for from the majors this quarterly reporting season

Quarterly reporting is about to kick off again for ASX mining and energy companies. For those new to quarterly reporting, the ASX requires companies involved in exploration activities to submit Quarterly Activity and Quarterly Cashflow reports.

Quarterly Activity reports give companies an opportunity to regularly update investors on what they’ve been up to for the last three months. They will usually detail any exploration that’s been carried out, highlight any drilling results, and explain what activities are expected to be undertaken in the next quarter.

Depending on the company, you’ll also likely get an update on any pending study that’s being carried out (e.g., PFS, DFS etc.), on negotiations with customers regarding offtake agreements, and on any ongoing negotiations with financiers.

In their Quarterly Cashflow reports, also known by their ASX names “Appendix 4C” (for mining companies) and “Appendix 5B” (for energy companies), companies are required to disclose how much cash was received and paid as a result of operating, investing, and financing activities. Companies must also disclose any change in their cash balance, and the final cash balance at the end of the quarter.

Quarterly Activity and Quarterly Cashflow reports are typically released at the same time and must be submitted to the ASX before the end of the month following the relevant quarter-end. This means for the June quarter just ended, quarterly reports must be submitted by July 31.

Usually, the last week of the relevant reporting month is when we see most Quarterly Activity and Appendix 4C/5B’s released, but the majors often kick off a week earlier. Note, bigger and consistently profitable mining companies don’t have to issue Appendix 4C/5B’s, but must still issue Quarterly Activity reports.

Morgan Stanley’s Top 20 to watch this quarterly reporting season

Major broker Morgan Stanley has recently released a detailed report on what its expecting from 20 major ASX-listed mining companies. See below, in alphabetical order, a summary of the key items they’re watching out for, as well as their forecasts for production and costs for each company.

29METALS (ASX: 29M)

Rating: OVERWEIGHT | Price Target: $0.55

  • Watching for:

    • Information indicating a possible restart at Capricorn Copper

    • Update on Capricorn copper insurance claim

    • Ramp-up in zinc production at Golden Grove

  • Quarterly production forecast:

    • Copper 5.4kt

    • Gold 4.1kt

    • Zinc 14kt

    • Silver 198koz

    • Costs: $2.86/lb C1 vs $3.82/lb AISC copper equivalent

Alumina (ASX: AWC)

Rating: EQUAL-WEIGHT | Price Target: $1.60

  • Watching for:

    • Commentary on Alcoa transaction (scheme meeting vote 18 July)

    • Update on Kwinana curtailment

    • CY24 guidance (sees “pressure remaining” on first-half distributions)

  • Quarterly production forecast:

    • AWAC refining: 2.3mt

    • AWAC mining: 9.4mt

    • Costs: US$296/t

BHP Group (ASX: BHP)

Rating: EQUAL-WEIGHT | Price Target: $46.65

  • Watching for:

    • Information/strategic update regarding nickel projects: Nickel West and West Musgrave

    • 10% increase in WA iron ore (WAIO) volumes and 8% increase in shipments

    • Copper segment strategic update

    • FY25 production guidance

  • Quarterly production forecast:

    • Iron ore 258mt

    • Copper 1872kt

    • Coal: Met 22.4mt, QLD 44.8mt, Thermal 15.6mt

    • Nickel 80kt

    • Costs: Iron Ore US$18.3/t, Copper US$1.45/lb

Boss Energy (ASX: BOE)

Rating: EQUAL-WEIGHT | Price Target: $4.65

  • Watching for:

    • Update on ramp Honeymoon and Alta Mesa ramp-ups

    • Confirmation of timing of first shipment (July 2024)

    • Confirmation of new offtake agreements

  • Quarterly production forecast:

    • U3O8 Honeymoon 150klb, Alta Mesa 200klb

    • Costs: US$68.53/lb-US$68.84/lb C1

Evolution Mining (ASX: EVN)

Rating: OVERWEIGHT | Price Target: $4.15

  • Watching for:

    • FY25 guidance (769koz)

    • Northparkes E22 Feasibility Study

    • Beat previously lowered FY24 guidance

  • Quarterly production forecast:

    • Gold 214koz

    • Copper 18.2kt (244koz Silver equivalent)

    • Costs: Gold $1,310/oz AISC

Fortescue (ASX: FMG)

Rating: UNDERWEIGHT | Price Target: $18.70

  • Watching for:

    • Meeting FY24 guidance

    • FY25 guidance (Production 189Mt, Costs US$21.30/t C1)

    • Gabon updates, expansion plans

  • Quarterly production forecast:

    • Iron Ore 51Mwmt

    • Costs: US$18/wmt C1

IGO (ASX: IGO)

Rating: UNDERWEIGHT | Price Target: $5.05

  • Watching for:

    • FY25 guidance (Production 1.715Mt, Costs $386/t, Capex $443m)

    • Update on Greenbushes ramp-up, new developments for CGP3

    • Progress on Kwinana operational improvements, September planned shutdown

    • Cosmos mine wind down completion

  • Quarterly production forecast:

    • Nickel: Nova 5.68kt, Forrestania 1.4kt

    • Copper 2.41kt

    • Cobalt 0.19kt

    • Lithium 325kt

    • Costs: Nova $3.68/lb, Forrestania $12.06/lb, Greenbushes $445/t

Iluka Resources (ASX: ILU)

Rating: EQUAL-WEIGHT | Price Target: $6.70

  • Watching for:

    • Eneabba refinery funding update

    • SR1 restart update

    • Commentary on Chinese demand for rutile and zircon

  • Quarterly production forecast:

    • Zircon 55.6kt, Rutile 14kt, Synthetic Rutile 55kt

Lynas Rare Earths (ASX: LYC)

Rating: UNDERWEIGHT | Price Target: $4.85

  • Watching for:

    • Update on Mt Weld expansion progress (schedule and budget)

    • Progress update on US rare earths project (approvals and construction)

    • Impact of weak pricing vs sales

  • Quarterly production forecast:

    • NdPr 1.72kt

    • Rare earth oxide 4.3kt

Mineral Resources (ASX: MIN)

Rating: OVERWEIGHT | Price Target: $79

  • Watching for:

    • Meeting of FY production guidance

    • Ashburton ramp-up update, timing of Train 3 at Wodgina, Mt Marion underground

    • Impact of price weakness

  • Quarterly production forecast:

    • Iron ore 4.5Mt

    • Lithium Mt Marion 185kt, Wodgina 133kt

Nickel Industries (ASX: NIC)

Rating: OVERWEIGHT | Price Target: $0.95

  • Watching for:

    • Update on licence application to increase Henjaya sales volume

  • Quarterly production forecast:

    • Nickel 32.7kt

Northern Star Resources (ASX: NST)

Rating: EQUAL-WEIGHT | Price Target: $14.90

  • Watching for:

    • FY25 guidance (Production 1.87Moz, Costs $1,779/oz AISC)

    • Update on TBO mill ramp-up, capex for expansion

    • Fimiston Underground start date update

    • Buyback update

  • Quarterly production forecast:

    • Gold 438koz

    • Costs $1,812/oz AISC

Pilbara Minerals (ASX: PLS)

Rating: UNDER-WEIGHT | Price Target: $2.75

  • Watching for:

    • Achievement of FY24 guidance (lower end of guidance range – 664kt)

    • Could miss on costs guidance (“to remain challenging”)

    • Better pricing (US$1,100/t), BMX strategy update

    • Pilgangoora 1Mtpa ramp-up PFS update

    • Gangfeng JV for downstream conversion plant update

    • POSCO South Korea lithium hydroxide JV update

  • Quarterly production forecast:

    • Lithium 165kt

    • Costs $651/dmt

Paladin Energy (ASX: PDN)

Rating: OVERWEIGHT | Price Target: $16.65

  • Watching for:

    • Langer Heinrich ramp-up

    • FY25 guidance (Production 4.5Mlb, Costs US$25.40/lb C1)

  • Quarterly production forecast:

    • U3O8 55,000lb

    • Costs US$34.30/lb C1

Rio Tinto (ASX: RIO)

Rating: OVERWEIGHT | Price Target: $142

  • Watching for:

    • Update on potential legal proceedings at Resolution Copper

    • Update on Oyu Tolgoi ramp-up

    • Updates on Simandou, Ricon and Jadar projects

  • Quarterly production forecast:

    • WAIO 88.8kt

    • Alumina 1,935kt

    • Aluminium 851kt

    • Copper: Mined 159kt, Refined 61.4kt

Regis Resources (ASX: RRL)

Rating: OVERWEIGHT | Price Target: $2.10

  • Watching for:

    • Update on McPhillamy’s approvals, DFS (targeted for release before end of FY24)

    • FY25 guidance (422koz)

  • Quarterly production forecast:

    • Gold 115.7koz

    • Costs $1,616/oz C1, $2,107/oz AISC

South32 (ASX: S32)

Rating: EQUAL-WEIGHT | Price Target: $3.80

  • Watching for:

    • Achievement of FY24 guidance

    • FY25 guidance

    • Update on Eagle Downs divestment

    • Update on sale of Illawarra coal (due by H1 FY25)

    • Sierra Gorda fourth grinding line feasibility study (FID due in H1 FY25)

    • AusMag update

    • Update on Brazil Aluminium ramp up

  • Quarterly production forecast:

    • Alumina 1,377kt

    • Aluminium 288kt

    • Coal: Thermal 181kt, Met 1,369kt

    • Manganese 550kwmt

    • Nickel 11kt

    • Copper 17.9kt

    • Silver 2,950koz

    • Lead 31kt

    • Zinc 19kt

Sandfire Resources (ASX: SFR)

Rating: EQUAL-WEIGHT | Price Target: $8.25

  • Watching for:

    • FY25 guidance (Production MATSA 60.4kt & Motheo 56kt, Costs MATSA US$1.20/lb & Motheo US$1.46/lb)

    • Improving costs at Motheo (due to higher production on project ramp-up)

  • Quarterly production forecast:

    • Copper 26.8kt

    • Costs $US1.19/lb

Syrah Resources (ASX: SYR)

Rating: EQUAL-WEIGHT | Price Target: $0.40

  • Watching for:

    • Vidalia production progress and expansion to 45ktpa update (FID due H1 FY24)

    • US International Development Finance Corporation loan update

  • Quarterly production forecast:

    • Graphite 16kt

    • Costs US$635/t C1

Whitehaven Coal (ASX: WHC)

Rating: OVERWEIGHT | Price Target: $9.75

  • Watching for:

    • Update on first production volumes for Blackwater and Daunia

    • Update on Daunia and Blackwater sell-down process

    • Confirmed first production from Vickery early mining project

  • Quarterly production forecast:

    • Total coal 9.72Mt

 

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience, helping investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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