Category: Stock Market

Vulcan Energy Resources Ltd (ASX: VUL) shares are avoiding the market weakness on Thursday.

In morning trade, the ASX lithium stock is up almost 15% to $3.28.

Why is this ASX lithium stock jumping?

Investors have been buying the lithium developer’s shares after it released an update on its Lithium Extraction Optimisation Plant (LEOP) in Landau, Germany.

According to the release, the company has started production of the first Lithium Chloride (LiCl) product at the LEOP.

Management notes that this represents the first lithium chemicals domestically produced from a local source in Europe for the European market.

The good news is that LEOP is showing strong early results with consistently over 90% (up to 95%) lithium extraction efficiency from its Adsorption-type Direct Lithium Extraction (A-DLE) unit. This replicates what the ASX lithium stock saw in its lab and pilot plant operations. Importantly, it is in line with its commercial plant expectations and financing model.

What is the LEOP?

Vulcan has spent 40 million euros on LEOP. It is an optimisation, operational training, and product qualification testing facility. Its aim is to enable operational readiness for when the Phase One commercial facility is completed.

The next step will be its conversion to a battery-grade lithium chemical in Vulcan’s downstream optimisation plant. The LiCl product produced from LEOP will be transported to Höchst Industrial Park Frankfurt, where Vulcan is currently completing its Central LEOP. This facility will convert the LiCl into battery grade Lithium Hydroxide Monohydrate (LHM).

Looking further ahead, once Phase One commercial production commences, Vulcan estimates that its integrated renewable energy and Zero Carbon Lithium business will produce enough lithium for approximately 500,000 electric vehicles.

‘Significant milestone’

The ASX lithium stock’s CEO, Cris Moreno, was very pleased with the news. He commented:

This significant milestone marks a pivotal moment in Vulcan’s journey towards revolutionising domestic lithium raw material supply for Europe’s Battery industry. Vulcan’s LEOP facility is equipped with world-leading technology designed to showcase the efficiency of our A-DLE process and environmental benefits, whilst training our commercial production team in a pre-commercial environment as we build the Phase One commercial plant.

It is encouraging to see LEOP deliver extraction efficiency in line with our expectations. I would like to thank our determined project execution and operations team for getting us to this landmark. We look forward to providing further updates on our Central Lithium Electrolysis Optimisation Plant (CLEOP) as we aim to produce Europe’s first fully integrated lithium battery chemicals from our own domestic resource, and also to providing updates on Phase One of the Zero Carbon Lithium Project, including financing, in the coming months.

The post Why is this ASX lithium stock racing 15% higher today? appeared first on The Motley Fool Australia.

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• Guess which ASX 300 lithium stock is up 64% in a month

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The All Ordinaries Index (ASX: XAO) is down 0.8% in morning trade, and it’s certainly not being helped by this tumbling ASX All Ords stock.

The company in question is ASX healthcare stock Avita Medical Inc (ASX: AVH).

The Avita Medical share price closed yesterday trading for $4.50. In early morning trade on Thursday, shares crashed to $3.77, down a precipitous 16.3%.

Following some potential bargain hunting, shares have since recouped some of those losses.

At the time of writing, shares in the ASX All Ords stock are trading for $4.00 apiece, down 11.1%.

Here’s what’s happening.

ASX All Ords stock tumbles on missed guidance

Avita Medical is a commercial-stage regenerative medicine company focused on devices for wound care management and skin restoration.

And the ASX All Ords stock is under heavy selling pressure today after reaffirming management’s expectations for full-year 2024 revenue to come in at the lower end of Avita’s previously provided guidance of US$78.5 million to US$84.5 million.

The company also announced an update to its expected commercial revenue for the first quarter of 2024.

For the March quarter, Avita Medical said it now expects commercial revenue to be in the range of US$11.0 million to US$11.3 million. That’s significantly lower than the company’s prior revenue guidance of US$14.8 million to US$15.6 million for the three-month period.

Management pointed to a slower-than-expected conversion rate of new accounts for Avita’s expanded label of full-thickness skin defects for the downward revision.

Commenting on the results putting the ASX All Ords stock under the gun today, Avita Medical CEO Jim Corbett said, “In light of the challenges encountered in the first quarter of 2024, we are intensifying our efforts to drive growth.”

Corbett added:

While our account conversion rate impacted our quarterly revenue, we remain optimistic for the full year.

With the recent launch of PermeaDerm in March and the upcoming launch of RECELL GO, along with our deeper understanding of the VAC processes and timelines, we believe that we will meet the lower end of our previously provided annual revenue guidance range of US$78.5 million to US$84.5 million.

Corbett said that Avita remains committed to delivering value and making a positive impact on the lives of its patients.

The company is expected to report its financial results for the first quarter of 2024 after the close of the US financial markets on 13 May, meaning we should have them here at market open on 14 May.

Avita Medical share price snapshot

Despite today’s big fall, shares in the ASX All Ords stock remain up 8% over six months.

The post Why did this ASX All Ords stock just crash 16%? appeared first on The Motley Fool Australia.

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• 3 struggling ASX shares to buy at a discount

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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There has been some big news in the Australian betting industry this week involving Bluebet Holdings Ltd (ASX: BBT) and Betmakers Technology Group Ltd (ASX: BET).

This has led to both ASX shares rising strongly this week.

Big news from these betting ASX shares

BlueBet shares rocketed 30% on Wednesday before being slammed into a trading halt.

The company acknowledges that this was likely due to the leaking of its merger plans with rival Betr. In its response to a price query request from the Australian stock exchange, BlueBet said:

Yes. BBT confirms that, at the time of receipt of the price and volume query from ASX, BBT was aware of information concerning it that had not been announced to the market which, if known by some in the market, could explain the recent trading in its securities referred to in the ASX letter. This information related to BBT’s proposed acquisition of NTD Pty Ltd’s (ACN 658 859 262) (betr) wagering business and the associated equity capital raising proposed to be conducted by BBT.

The official details of the merger plans have now been released.

BlueBet has agreed to acquire Betr’s wagering business in an all-scrip deal, which it believes will create a leading Australian online wagering company.

It notes that its larger and more competitive combined business is expected to reach monthly EBITDA profitability in first half of FY 2025 and be EBITDA profitable for the full year.

BlueBet will acquire Betr by way of an asset purchase that will see the issue of approximately 265.4 million fully paid ordinary shares, equating to ~56.9% of its shares on issue.

Though, this is before taking into account the issuance of shares under a $20 million placement that has just been announced. It aims to raise those funds at 21 cents per new share.

The proceeds will be used to fund operational and strategic growth initiatives of the combined business and one-off synergy realisation and transaction costs.

What about Betmakers?

Betmakers is also impacted by this ASX merger news.

According to a separate announcement, in light of its proposed takeover, Betr has agreed to pay outstanding amounts owed to Betmakers.

BetMakers’ CEO, Jake Henson, said:

BetMakers is pleased with the agreed outcome between the parties. We are satisfied with the terms to recover outstanding amounts owed to BetMakers by betr. In addition, we are content with the agreement on the ongoing terms that are a result of betr entering into a new transaction. We wish the betr team all the best in its new venture (should it proceed) and will continue to be supportive wherever we can along that path.

Henson also believes that the agreement leaves the company better placed for the future. He adds:

The executed agreement places BetMakers on a much stronger footing going forward, strengthening our cash position, and relieving the Company of a significant resource commitment, both now and into the future. This provides the ability to further reduce our overall cost base and the opportunity to redeploy key technology and development personnel to expedite the NextGen roll-out for clients globally, which will unlock additional efficiencies, significant savings and an improved product offering for BetMakers’ customers.

The post 2 ASX betting shares making big news this week appeared first on The Motley Fool Australia.

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More reading

• Are Paladin Energy shares really surging 900% today?
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• Why is the Core Lithium share price jumping 10% today?

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Betmakers Technology Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Paladin Energy Ltd (ASX: PDN) shares certainly are catching the eye of investors on Thursday.

Depending on where you look, you may see the uranium miner’s shares rising as much as 900%.

But is this really the case? Have its shares almost become a ten-bagger within the first hour of trade this morning?

Unfortunately for shareholders, the short answer is no. But what is actually going on?

What’s going on with Paladin Energy shares?

Earlier this week, Paladin Energy shareholders were invited to vote on a reverse split.

This is what happens when a company reduces the number of shares on issue through the act of consolidation.

It is important to note that this is not the same as a share buyback. No shares are bought back through a reverse split. They are merely consolidated.

So, in the case of a 2-1 reverse split, if you owned 100 shares of a company with a $10 share price, after the split you would own 50 shares with a $20 share price. The value of your investment is unchanged at $1,000.

Paladin Energy’s reverse spilt

On Tuesday, shareholders voted overwhelmingly in favour of a 10-1 reverse spilt. A total of 99.84% votes were cast in favour of the move.

This saw its total number of shares reduce from 2,984,656,146 units to 298,465,615 units this morning.

So, with Paladin Energy shares closing yesterday’s session at $1.52, it meant that they opened today’s session at $15.20.

Why the split?

The uranium miner’s management revealed that the split was undertaken in order to give the company a share price more befitting of its status as an ASX 200 stock. It recently explained to shareholders:

The Consolidation is proposed to reduce Paladin’s shares on issue to a level that better reflects the Company’s position as an ASX 200 company and provides a share price that is more appealing to a wider range of international investors. The Consolidation applies equally to all shareholders and as such the shareholders proportional interest in the Company’s issued capital will remain unchanged (other than minor variations resulting from the rounding of fractional shareholdings).

Prior to today, Paladin Energy shares had absolutely smashed the market with a stunning gain of almost 150% over the last 12 months.

This has been driven by the soaring uranium price which has been caused by optimism over nuclear power adoption and supply shortages of the chemical element.

The post Are Paladin Energy shares really surging 900% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Plenty of ASX blue-chip shares are known for being generous ASX dividend shares.

In this article, we have two income-generating shares that most Australians will be familiar with: supermarket giant Coles Group Ltd (ASX: COL) and iron ore miner Fortescue Ltd (ASX: FMG).

Now, the market is always on the move and we typically don’t know exactly which way share prices will go. But dividends are much more predictable. A company’s payouts are decided by its board and paid for by profits the business has generated.

I’m going to look at a couple of key areas to help me decide which of the two passive income stocks are a better buy for dividends.

Dividend yield

Both Coles and Fortescue have solid dividend yields. A yield is influenced by two things, the dividend payout ratio and the price/earnings (P/E) ratio (which is the earnings multiple valuation).

If a company pays out more of its profit then it will have a higher dividend yield. A lower earnings multiple can push up the dividend yield, while a higher valuation pushes down on the dividend yield.

According to the estimates on Commsec, owning Coles shares could result in a grossed-up dividend yield of 5.8% in FY24, 6.2% in FY25 and 7% in FY26.  

Meanwhile, owning Fortescue shares could mean a yield of 11.2% in FY24, 8.3% in FY25 and 6% in FY26.

In the short-term, Fortescue may offer a bigger dividend yield, but by FY26, Coles could pay a larger dividend yield.  

Sustainability of the payout

This is the most important element to me. I think dividend projections are a sign of what conditions the companies are facing.

According to forecasts, dividend payouts by Coles and Fortescue are tipped to go in opposite directions.

The last few years have been very supportive for Fortescue’s shares and profit because of relatively high iron ore prices. But, the iron ore price has dropped back down to around US$100 per tonne – it was above US$140 per tonne in early 2024 and was above US$200 per tonne in 2021.

New supply, particularly from Africa, may be a significant headwind for the iron ore price in the next few years, depending on how much demand there is from China. Of course, Fortescue may have its own African project by then, plus it’s diversifying its operations by investing in green energy production.

Coles on the other hand is a very resilient business. As a supermarket business, it provides products that we all need, so the demand is very consistent. On top of that, Australia’s population is growing strongly, so the number of potential consumers keeps increasing.

The Coles dividend is much more sustainable, in my opinion. It has grown every financial year since listing on the ASX a few years ago, though past performance is not a guarantee of future performance.

At the current prices, I’d call Coles shares a better buy, particularly as the Fortescue share price is so high despite current weakness in the iron ore price.

The post Are Coles or Fortescue shares a better buy for dividend income? appeared first on The Motley Fool Australia.

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More reading

• Here are the iron ore and lithium price forecasts through to 2027
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Motley Fool contributor Tristan Harrison has positions in Fortescue. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in and has recommended Coles Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The NextDc Ltd (ASX: NXT) share price isn’t doing anything just yet. Though early indications are that shares may open modestly lower.

Shares in the S&P/ASX 200 Index (ASX: XJO) tech stock closed yesterday trading for $16.71. In morning trade on Thursday, shares remain there, after the company requested a trading halt.

That halt is meant to lift following the company’s announcement of a major capital raising. That announcement has since been made. But as of now, we’re still waiting.

Here’s what we know.

NextDC share price one to watch following cap raise

The NextDC share price is in the spotlight after the company announced it is undertaking a $1.321 billion capital raising via a fully underwritten 1 for 6 pro-rata accelerated non-renounceable entitlement share offer.

New shares will be issued for $15.40, some 8% below where the NextDC share price closed.

The ASX 200 tech stock noted that it’s been experiencing record demand for its data centre services. In calendar year 2023, the company’s contracted utilisation increased by 77% to 149.0MW.

Looking at what could impact the NextDC share price ahead, the company expects that a record forward order book of 68.8MW will convert into billings across FY 2025 to FY 2029, which management said will drive future revenue and earnings growth.

With that growth in mind, the ASX 200 tech company intends to deploy the $1.321 billion to accelerate the development and fit out of its digital infrastructure platform in its core Sydney and Melbourne markets.

The company reported that once the capital raising is complete, it will have pro-forma tangible asset backing of approximately $5.1 billion and pro-forma liquidity of around $3.4 billion.

What did management say?

Commenting on the capital raising that could move the NextDC share price today, CEO Craig Scroggie said:

NextDC continues to see significant growth in demand for its data centre services underpinned by powerful structural tailwinds.

Amid this backdrop, we have decided to bring forward the development and fitout of key assets in Sydney and Melbourne to ensure we are able to meet this growth in demand, continue to support our customers, and ensure the company is well positioned to take advantage of the diverse range of opportunities expected to present over the medium term.

NextDC maintains guidance

The NextDC share price could get a boost after the company maintained the FY 2024 guidance it initially offered on 27 February.

That guidance is as follows:

• Total revenue in the range of $400 million to $415 million
• Net revenue in the range of $296 million to $304 million
• Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) in the range of $190 million to $200 million
• Capital expenditure in the range of $850 million to $900 million

The NextDC share price is up 51% over the past 12 months.

The post What’s happening with the NextDC share price following today’s $1.3 billion announcement? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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S&P/ASX 200 Index (ASX: XJO) tech stock Netwealth Group Ltd (ASX: NWL) is sliding today.

Shares in the investment platform provider closed yesterday trading for $20.28. In morning trade on Thursday, shares are swapping hands for $19.68 apiece, down 3.0%.

For some context, the ASX 200 is down 0.8% at this same time.

Here’s what investors are mulling over today.

ASX 200 tech stock falls despite record 12-month fund inflows

The Netwealth share price is in the red following the release of the company’s quarterly update for the three months to 31 March.

Among the highlights, the ASX 200 tech stock reported $84.7 billion of Funds Under Administration (FUA) as at 31 March.

Over the three months, FUA increased by $6.7 billion. That was achieved via net fund inflows of $2.7 billion along with positive market movement of $4.0 billion.

Impressively, management noted that quarterly FUA gross inflows of $5.2 billion were up 40.7% year on year. And FUA net inflows of $2.7 billion were up 62.2%.

Over the 12 months to 31 March FUA were up by 28.5% or $18.8 billion. That comprised FUA net inflows of $10.6 billion and positive market movement of $8.2 billion.

The strong results were driven by a new record 12-month FUA inflow of $21.2 billion.

As for Funds Under Management (FUM), those were up by $1.6 billion for the quarter to $19.7 billion. Netwealth reported FUM net inflows of $600 million for the three months.

Meanwhile, the ASX 200 tech stock’s managed account balance increased by $1.4 billion to $17.0 billion, including net inflows of $600 million, a 62.1% year on year increase.

The number of accounts were up as well, increasing by 11.6% compared to the prior corresponding quarter. The company cited “strong momentum in the March quarter”, adding 5,132 new accounts, 3.7% higher than the December quarter.

The Netwealth share price could be under some selling pressure with the company noting that the structure of its tiered administration fees, fee caps and most ancillaries, when combined with the lower cash percentage, “has resulted in a reduction in average revenue bps in the March quarter”.

Looking ahead

Looking at what could impact the Netwealth share price in the months ahead, the ASX 200 tech stock said:

In addition to strong account growth in the quarter, we expanded and strengthened our new adviser and licensee relationships. Our new business pipeline including conversion rates, is very strong across all segments.

Management forecasts June quarter FUA inflows “to be very strong with several new large transitions commencing, in addition to higher seasonal flows and increased market activity”.

On the AI front, the ASX 200 tech stock noted the rapid changes encompassing the tech world. As such, management said, “Innovations in generative artificial intelligence are being actively explored and implemented to improve efficiency, productivity, client engagement and service.”

The Netwealth share price is up 60% over 12 months.

The post ASX 200 tech stock slides despite record $21.2 billion results appeared first on The Motley Fool Australia.

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Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Core Lithium Ltd (ASX: CXO) share price is catching the eye with a strong gain on Thursday morning.

At the time of writing, the lithium miner’s shares are up almost 10% to 17 cents.

This compares favourably to a 1.2% decline by the ASX 200 index.

Why is the Core Lithium share price jumping?

Investors have been buying the company’s shares this morning after it announced an update to the mineral resource estimate of its 100% owned Finniss Lithium Project in the Northern Territory.

According to the release, Core Lithium has delivered a 58% increase in the Finniss Lithium Project mineral resource estimate to 48.2Mt at 1.26% Li2O. This reflects the culmination of all drilling undertaken by the company’s exploration team in 2023.

Management notes that the reverse circulation and diamond drilling program was the largest program undertaken by the company to date. The program was conducted at both known deposits and at new prospects within the Bynoe Pegmatite Field.

It also highlights that the measured and indicated resource categories have increased to 27.9Mt @ 1.32% Li2O. Approximately 58% of the mineral resource estimate is in the higher confidence measured and indicated categories.

But the lithium miner isn’t finished with its drilling. It notes that the Lees and Booths deposits represent a continuous series of dipping pegmatite sheets that are located midway between the existing Carlton and BP33 mineral resources. It believes the location of these resources, together with further nearby targets that will be tested throughout 2024, adds to the possibility of future shared development opportunities.

‘Excellent outcome’

Core Lithium’s interim CEO, Doug Warden, was pleased with the news. He said:

This significant increase to the Finniss Mineral Resource is an excellent outcome for Core and our shareholders. The 2023 exploration program was the largest in Core’s history and these outstanding results justify the continued exploration of the Finniss region.

In particular, the 429% increase in the combined Mineral Resource at Lees & Booths to 14.4Mt, supports our view that the Finniss region has the potential to host large clusters of lithium deposits. At Lees, the pegmatites remain open in multiple directions with the high chance that further pegmatite sheets exist within the system. Our 2024 exploration program will target both larger standalone deposits, as well as clusters of smaller deposits that have the potential to be mined with shared infrastructure.

The Core Lithium share price remains down 80% over the last 12 months.

The post Why is the Core Lithium share price jumping 10% today? appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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Today is a good day to have Woolworths Group Ltd (ASX: WOW) shares in your investment portfolio.

While its share price may have been caught up in the market weakness today, there’s still reason to smile.

That’s because today is payday for its shareholders.

Payday for Woolies shareholders

As a reminder, in February, Woolworths released its half year results.

For the six months ended 31 December, the supermarket giant reported a 4.4% increase in revenue to $34.64 billion and a 2.5% increase in profit before significant items to $929 million. This was driven by strong growth from its Australian Food business, which helped offset a poor performance from the Big W and New Zealand businesses.

This allowed the Woolworths board to increase its fully franked interim dividend by 2.2% to 47 cents per share.

Woolworths’ shares went ex-dividend for this payout at the end of February. So, if you owned its shares when that happened, today is payday for you.

What’s next for the Woolworths dividend?

According to a note out of Goldman Sachs, its analysts expect another increase to the Woolworths dividend in August.

The broker is forecasting a fully franked final dividend of 62 cents per share, bringing its full year dividend to $1.09 per share. This represents a 4.8% increase year on year.

But its growth won’t stop there according to the broker. It is forecasting a 7.3% increase to $1.17 per share in FY 2025 and then a further 8.5% increase to $1.27 per share in FY 2026.

Are Woolworths shares good value?

Goldman Sachs thinks that the supermarket giant’s shares are undervalued at current levels.

The broker has a buy rating and $40.40 price target on them, which implies potential upside of approximately 25% for investors over the next 12 months. It commented:

WOW is the largest supermarket chain in Australia with an additional presence in NZ, as well as selling general merchandise retail via Big W. We are Buy rated on the stock as we believe the business has among the highest consumer stickiness and loyalty among peers, and hence has strong ability to drive market share gains via its omni-channel advantage, as well as its ability to pass through any cost inflation to protect its margins, beyond market expectations. The stock is trading below its historical average (since 2018), and we see this as a value entry level for a high-quality and defensive stock.

The post Why it’s a good day to own Woolworths shares appeared first on The Motley Fool Australia.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Goldman Sachs Group. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Northern Star Resources Ltd (ASX: NST) share price is under pressure on Thursday.

In morning trade, the gold miner’s shares are down 2.5% to $14.62.

Despite this, the company’s shares are up 30% over the last six months.

Why is the Northern Star share price falling?

Investors have been selling the gold giant’s shares this morning following a pullback in the gold price overnight and the release of preliminary production results for the three months ended 31 March 2024.

In respect to the latter, according to the release, Northern Star reported 401,000 ounces of gold sold during the March quarter. This is down from 412,000 ounces during the previous quarter.

Management advised that this reflects the impact of significant weather events across the Northern Goldfields.

The good news is that the company appears to have moved on from these disruptions. It advised that the June quarter has started with strong operational momentum. This includes at the Kalgoorlie Production Centre with increased access to high-grade Golden Pike North material, early access to first ore at Wonder underground in the Yandal Production Centre, and grade improvements at Pogo Production Centre.

Importantly, with gold sold totalling 1.18 million ounces over the first three quarters, management believes Northern Star remains on track to deliver on its FY 2024 group gold sold guidance of 1.6 million ounces to 1.75 million ounces. This is based on positive momentum leading into an expected strong June quarter, driven predominantly by increased grade and mill utilisation rates.

Northern Star’s cash balance softened during the quarter. It ended the period with cash and bullion totalling $1,076 million, down from $1,089 million at the end of December. However, it is worth noting that the gold miner paid out its $169 million interim dividend during the quarter. Excluding this, its cash balance would have lifted over the three months.

In addition, management advised that major organic growth projects continued to advance during the quarter. The includes the key KCGM Mill expansion, which remains both on track and on budget.

Commenting on the company’s third-quarter performance, Northern Star’s managing director, Stuart Tonkin, said:

The resilience of our team and assets was demonstrated during the quarter with operations further challenged due to adverse weather. Our profitable growth strategy coupled with elevated gold prices is expected to deliver significant cashflow generation, and in turn, superior shareholder returns.

Northern Star intends to release its full quarterly update on Tuesday 23 April.

The post Northern Star share price tumbles on difficult quarter appeared first on The Motley Fool Australia.

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More reading

• Is it too late to get on board the ASX gold train?
• 5 things to watch on the ASX 200 on Thursday
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• Buying ASX 200 gold stocks? Here’s why the record gold price could keep charging higher
• 5 things to watch on the ASX 200 on Monday

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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