Category: Stock Market

The Argosy Minerals Limited (ASX: AGY) share price is in negative territory today. This comes despite the company announcing a positive update on the construction works at the Rincon Lithium Project.

Argosy holds a 77.5% interest in the Rincon project, located in Salta Province, Argentina. The mine is situated within the ‘lithium triangle’ – the world’s dominant lithium production source.

During late afternoon trade, the lithium miner’s shares are down 3.03% to 9.6 cents apiece.

How is Argosy progressing?

Investors are selling Argosy shares regardless of the company providing a snapshot of its progress on the Rincon Lithium Project.

According to its release, Argosy stated that around 24% of the total works have now been completed to bring the Rincon Lithium Project online. The development of the modular 2,000tpa (tonnes per annum) of lithium carbonate production plant remains on schedule and on budget.

The company is targeting to achieve the first commercial production of lithium carbonate product from mid-2022.

Major construction works such as building the process plant, equipment and associated installations, and expansion of the brine system have all progressed. As such, Argosy provided a snapshot of the current progress:

• 74% of earthworks/land movements completed;
• 31% of site works completed (site camp/accommodation, laboratory, office, and other works);
• 65% of the brine system completed (pumping station and plant settling ponds);
• 25% of the process plant completed (plant equipment acquisition and plant warehouse);
• 13% of utilities and associated services (vapour system, communication system and ancillary services); and
• 2% plant commissioning works completed (raw materials acquisition and team development).

Argosy revealed that it is continuing discussions with a number of strategic groups on product off-take agreements and investment options. The company hopes to expand the 2,000tpa of lithium carbonate to a 10,000tpa project development.

Furthermore, Argosy believes that with lithium prices rising and tightening market supply and demand conditions, potential off-take arrangements will become more attractive.

What did management say?

Argosy managing director, Jerko Zuvela commented:

The Company’s Puna operations team have continued their strong progress with construction and development works, toward commencing 2,000tpa lithium carbonate production operations at our Rincon Lithium Project.

We are excited as we continue our works to transform Argosy into a battery quality lithium carbonate producer and cashflow generator, and to further progress the 10,000tpa project development expansion. We look forward to a significant near-term growth phase from increasing development activity at the Rincon Lithium Project

About the Argosy share price

Since the beginning of the year, Argosy shares have performed modestly, recording gains of around 20%. The company’s share price reached a 52-week high of 21.5 cents in January.

Based on valuation grounds, Argosy presides a market capitalisation of roughly $120 million, with approximately 1.25 billion shares outstanding.

The post Argosy (ASX:AGY) share price backtracks despite positive update appeared first on The Motley Fool Australia.

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The Commonwealth Bank of Australia (ASX: CBA) share price is up 1.3% in late afternoon trade. CBA is currently trading for $102.54 per share.

It was only last Friday, 28 May, that the CBA share price closed higher than $100 for the first time.

That psychological level didn’t last long. CommBank closed lower on the first 2 days of this week, with the CBA share price at $99.46 by Tuesday’s closing bell.

The tail end of this week has been a different story, with CommBank closing in the green the past 3 days. Assuming today’s gains hold, the CBA share price looks set to close at a new record high today.

CBA in the news

Over the past 3 months, CBA has been the best performing of the big 4 banks. And a growing chorus of analysts expect that CBA will be giving some of its profits back to shareholders by ramping up dividends.

Matthew Haupt, portfolio manager at Wilson Asset Management, calls CBA “the best bank in Australia.” As Reuters reports, Wilson Asset Management has a position in all the big 4 banks.

According to Haupt

[CBA] is absolutely flush with capital so they are in a great place to be able to return capital to shareholders… Probably around August, they’ll come out with a market buyback with a large franking credit portion. They should be leading the charge in capital management.

CommBank has roughly $11.5 billion more capital than it’s required to hold under the 10.5% core capital regulations.

That staggering sum has analysts at Morgan Stanley forecasting CBA will raise its dividend payment when it reports on its 2021 financial year earnings on 11 August. The broker also believes CommBank will make an off-market share buyback in the range of $5–5.5 billion.

CBA share price snapshot

The best performing of the big 4 banks in recent months, CommBank shares are up 52% over the past 12 months. By comparison, the S&P/ASX 200 Index (ASX: XJO) has gained 22% in that same time.

Year-to-date the CBA share price is up 22%.

The post Why the CBA (ASX:CBA) share price is at record highs appeared first on The Motley Fool Australia.

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If you haven’t already noticed, initial public offerings (IPOs) usually take advantage of industry strength in their timing. Copper mining company 29Metals is no different, with the possibility of it becoming the second-largest IPO so far this year.

The strategic timing is set to make the most of the red metal’s soaring price. Increasing demand for copper has pushed the commodity’s price up 44.5% in the last year. As of today, the conductive element is going for roughly US$9,810 per tonne.

Let’s take a look at the details of 29Metals and its anticipated IPO.

Billion-dollar copper company in the making?

Firstly, what is 29Metals? It’s not exactly a household name like BHP Group Ltd (ASX: BHP) or Rio Tinto Limited (ASX: RIO). The copper-focused miner operates two Australian producing mines and a Chilean exploration project.

A little more specifically, the miner’s portfolio includes Golden Grove in Western Australia – with a production rate of 1.4 million tonnes per year. Its other Australian project is Capricorn Copper in Queensland – with a production rate of 1.8 million tonnes per year.

29Metals is forecasting that it will achieve $658.4 million in revenue for the 2021 financial year, which would be a 25% increase on its 2018 revenue. The copper miner also expects net profit after tax of $39 million for the year – more than double its 2018 profit.

Credit Suisse, Macquarie Capital, and Morgan Stanley are jointly conducting the IPO. The brokers were closing their books at 12.30pm today, so now it’s a waiting game to see if the deal gained enough interest.

Bids were to be placed in 5 cent increments between $2 and $2.40 per share. However, closer to the books closing, that price range had narrowed to between $2 and $2.10. If the order books were filled, 29Metals could be looking to list at an enterprise value of between $1.05 billion and $1.2 billion.

What’s driving interest in copper shares?

Investors have been gobbling up shares in copper mining companies over the past year. There are various catalysts at play, namely the power and constructions sectors, and electric vehicles.

S&P Global has reported the surging pace of electrification means global copper production will need to rise by an estimated 3% to 6% by 2030. Analysts are expecting a lack of new mines and exploration will lead to demand outstripping our global supply.

Big #Copper pricing forecast

Goldman Sachs shifted its copper outlook in an April 13 research report, projecting a 2025 copper price of $15,000 per tonne, or $6.80 per pound, up from a prior price forecast under $10,000/t pic.twitter.com/LKkknmMJ5r

— Michael Bond (@MichaelBond_SP) April 15, 2021

https://platform.twitter.com/widgets.js

Analysts at Goldman Sachs have even gone as far as to say copper is “the new oil”. Additionally, Goldman slapped a price target of US$15,000 per tonne on the commodity by 2025. The analysts pointed to electric vehicles, solar power, and wind power being three key drivers for green copper demand.

What’s next for 29Metals?

If 29Metals managed to rally enough interest, a prospectus will be filed with the Australian Securities and Investments Commission.

From there, the mining company will hit the ASX boards on 23 June 2021, joining the likes of OZ Minerals Ltd (ASX: OZL) and Sandfire Resources Ltd (ASX: SFR).

The post 29Metals IPO heats up as books close on the copper miner appeared first on The Motley Fool Australia.

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The Purifloh Ltd (ASX: PO3) share price has been frozen after the company’s shares entered a trading halt this afternoon. At the time trading was halted, the purification and sterilisation company’s shares were sitting at $1.99, up 24.4% on yesterday’s close.

What’s going on?

Purifloh’s shares have been halted after investors drove the company’s share price 24% higher today. Additionally, the number of shares exchanged prior to the halt was 5 times greater than the average for a month.

Yesterday, the company posted a media release concerning the use of airborne prevention technology to minimise the risk of COVID-19 transmission in hotel quarantine.

Purifloh director Jon Evans said:

The recent COVID-19 outbreak in Victoria is the result of airborne transmission of the virus from hotel quarantine in Adelaide. While the long-term solution is clearly purpose-built facilities, in the short-term we need to set up those hotels with proven, effective airborne prevention transmission technology.

Furthermore, the press release stated that tests have shown Purifloh’s devices can destroy up to 99.9% of airborne contaminants.

While there has been no price-sensitive news out of the company today, the market could be speculating given the renewed attention on hotel quarantine processes this week as the Victorian lockdown rolls on and additional cases continue to be reported.

What next for the Purifloh share price?

Purifloh has yet to provide an additional update regarding its trading halt. At this point in time, the reason for Purifloh share price halt is unknown.

The post Purifloh (ASX:PO3) shares enter trading halt after surging 24% appeared first on The Motley Fool Australia.

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Australia’s top brokers have been busy adjusting their estimates and recommendations once again. This has led to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Australia’s top brokers have been busy adjusting their estimates and recommendations once again. This has led to the release of a number of broker notes.

Three broker buy ratings that have caught my eye are summarised below. Here’s why brokers think these ASX shares are in the buy zone:

Afterpay Ltd (ASX: APT)

According to a note out of Morgan Stanley, its analysts have retained their overweight rating and $149.00 price target on this payments company’s shares. The broker has been looking at app downloads in the United States during the month of May. It notes that Afterpay’s app was downloaded twice as much as it was a year earlier. It feels this is particularly impressive given that this is a seasonally quiet period. Outside this, Morgan Stanley remains positive on the company, believing that its recent launch in the European Union sets it up to build a global platform. The Afterpay share price is fetching $94.08 today.

Eagers Automotive Ltd (ASX: APE)

A note out of the Macquarie equities desk reveals that its analysts have retained their outperform rating and increased their price target on this auto retailer’s shares to $17.50. The broker believes that Eagers Automotive is well-placed to benefit from favourable trading conditions which continue to see demand outstripping supply. This has led to the broker increasing its margin assumptions and making material upgrades to its near term earnings forecasts. The Eagers Automotive share price is trading at $15.96 this afternoon.

Healius Ltd (ASX: HLS)

Another note out of Macquarie reveals that its analysts have retained their outperform rating and lifted their price target on this healthcare company’s shares to $4.70. The broker made the move after looking at current COVID-19 testing volumes. It believes Healius is well-placed to benefit from increasing demand for testing and appears to expect volumes to remain robust into FY 2022. The Healius share price is trading at $4.30 today.

The post Brokers name 3 ASX shares to buy now appeared first on The Motley Fool Australia.

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The energy sector is chalking up another day of gains as the outlook brightens for the oil price and a leading broker is urging you to buy this ASX share today.

The Brent crude benchmark has jumped by nearly 10% in two weeks from a low of US$65.11 to over US$70 a barrel.

ASX shares linked to the oil price have joined the party and most continued to rally today.

Broker lists one ASX energy share to buy

The Viva Energy Group Ltd (ASX: VEA) share price added 2.2% to $2.10, Oil Search Ltd (ASX: OSH) share price jumped 2% to $4.11 and Worley Ltd (ASX: WOR) share price gained 1% to $12.17.

But there’s one often overlooked ASX share that should be on your radar. This is the Karoon Energy Ltd (ASX: KSR) share price as Morgans reiterated its “add” recommendation on the stock.

The broker’s bullish call follows Karoon reaching a final investment decision (FID) on its Patola oil field.

Karoon production to double

“Given the high IRR (24%) and fast payback period (~3 years), we never saw much risk of Patola not reaching FID,” said Morgans.

“But the development should bolster market confidence in what we see as a low-risk/high-return organic growth profile that will double KAR’s current production.”

Karoon’s current production stands at around 12,500 barrels of oil equivalent per day (bopd). Management is expecting to produce 10,000 bopd from Patola starting from the March quarter of 2023.

Higher costs offset by other tailwinds

But it isn’t all good news. The capital expenditure (capex) on the project is higher than originally forecast. Bringing Patola into production is expected to cost US$175 million to US$195 million. That’s ahead of initial estimates of US$130 million.

“More than offsetting the higher capex was the debt KAR has secured,” said Morgans.

“Both larger (actual US$160m vs MorgE US$100m) and cheaper (actual 4.25% vs MorgE 5.5%) than we had expected KAR to be able to achieve. This is material for KAR’s cost of capital, which we have now adjusted lower.”

Karoon share price valuation uplift

The lower cost of debt means that the broker’s weighted average cost of capital (WACC) for the Karoon falls to 8% from 9.5%.

The lower the WACC, the higher the valuation on the Karoon share price. Additionally, the reduction in the expected Patola decline rate is a further boost to valuation.

These two positives more than offsets the higher-than-expected capex for the project.

Morgans increased its 12-month price target on the Karoon share price to $1.90 from $1.80 a share.

This implies a close to 40% upside for the shares.

The post Morgans picks this ASX share to buy for the oil recovery trade appeared first on The Motley Fool Australia.

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BetMakers Technology Group Ltd (ASX: BET) shares have been having a tough week following the company’s indicative proposal to acquire the wagering and media businesses of Tabcorp Holdings Limited (ASX: TAH). At the time of writing, the BetMakers share price has fallen 2.78% today to $1.05.

With today’s slide included, the company’s shares have slumped by 21.64% this week.

Let’s take a look at what’s been driving them lower.

BetMakers’ acquisition proposal

BetMakers released its acquisition proposal last Friday morning, to the dismay of the market. BetMakers shares slumped by more than 15% on that day alone.

If accepted, the proposal would see BetMakers acquire Tabcorp’s wagering and media business for $4 billion.

$1 billion would be paid in cash that BetMakers would get its hands on through debt financing.

The other $3 billion would be paid in new BetMakers shares – priced at a 15% premium to the BetMakers share price at the time of signing.

The acquisition would see Tabcorp shareholders given an approximate 65% interest in the merged BetMakers and Tabcorp wagering and media business.

BetMakers’ strategic advisor Matt Trip commented on the proposal, saying:

I am excited by the potential opportunity to reinvigorate the Tabcorp Wagering and Media business. There is significant potential for the business to grow in partnership with BetMakers and I hope to get the opportunity to support the Australian racing industry which relies on the success and growth of TAB

Tripp’s positivity hasn’t quite translated to the market, which has pushed the BetMakers share price down nearly every day since the indicative proposal was released.

Tabcorp did acknowledge the proposal, though it hasn’t responded further.

Tabcorp shares have ended the week not far from where they started – down 0.58% on last Friday’s close.

BetMakers share price snapshot

Despite the poor performance of the BetMakers share price over the past week, it’s still sitting around 55% higher than it was at the start of the year. It’s also gained more than 180% since this time last year.

The company has a market capitalisation of around $845 million, with approximately 812 million shares outstanding.

The post Why has the BetMakers (ASX:BET) share price fallen 22% this week? appeared first on The Motley Fool Australia.

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In afternoon trade, the S&P/ASX 200 Index (ASX: XJO) is on course to end the week with another solid gain. At the time of writing, the benchmark index is up 0.5% to 7,297.3 points.

Four ASX shares that have failed to follow the market higher today are listed below. Here’s why they are sinking:

Appen Ltd (ASX: APX)

The Appen share price is down 6% to $12.29. This appears to have been driven by weakness in the tech sector and news that the artificial intelligence data services company’s CEO, Mark Brayan, has sold 109,430 Appen shares. Mr Brayan received a total consideration of $1.43 million for the shares. However, it is worth noting that the sale was made to satisfy tax obligations arising from the vesting of 173,153 performance rights.

Ramelius Resources Limited (ASX: RMS)

The Ramelius share price has fallen 7.5% to $1.80. Investors have been selling Ramelius and other gold mining shares on Friday after the spot gold price fell almost 2% during overnight trade. This was driven by the strengthening of the US dollar. The S&P/ASX All Ords Gold index is down a disappointing 3.5% at the time of writing.

Reject Shop Ltd (ASX: TRS)

The Reject Shop share price has sunk 10% to $5.70. This discount retailer’s shares have been sold off today following the release of a disappointing trading update. Reject Shop has been battling weak sales and higher costs because of challenges in the international supply chain. As a result, it expects to post full year earnings before interest and tax (EBIT) of $8 million to $10 million. This compares to its first half EBIT of $23.3 million.

Sezzle Inc (ASX: SZL)

The Sezzle share price is down 5% to $8.75. This decline appears to be due to a combination of weakness in the tech sector and profit taking after an exceptionally strong gain on Thursday. The buy now pay later provider’s shares rocketed higher yesterday after announcing a deal with US retail giant Target.

The post Why Appen, Ramelius, Reject Shop, & Sezzle shares are sinking appeared first on The Motley Fool Australia.

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At the time of writing, the Sezzle Inc (ASX: SZL) share price has gone up 18% this week after the buy now, pay later business revealed an exciting update to the market.

Sezzle partnership

Sezzle informed the market that it has concluded its proof of concept (POC) with Target Corporation (NYSE: TGT), one of the largest omnichannel retailers in North America.

The buy now, pay later business has entered into a three-year agreement with the retailer.

Under the agreement, Sezzle’s product will be used in-store and across Target’s digital platforms, providing guests with access to interest-free payment plans for purchases made at Target.

What else has happened recently?

Near the end of May, Sezzle revealed that it had partnered with Lamps Plus, the US’ largest specialty lighting retailer. As part of the initial roll out, Lamps Plus is now offering Sezzle exclusively as a flexible payment option to its online customers at its website who can choose to pay for products in four interest-free instalments over six weeks with no impact to their credit score. Lamps Plus has a “thriving” e-commerce business with 36 stores in the west of the country.

The company also announced its intention to file the registration statement for an initial public offering (IPO) in the US.

First quarter of 2021

At the end of April 2021, it released the results of its first quarter numbers for the three months to 31 March 2021.

In that quarter, underlying merchant sales (UMS) increased 214.1% year on year to US$375.1 million. That was an increased of 16.9% quarter on quarter.

Sezzle income, as a percentage of UMS, remained steady at 5.9% compared to the prior corresponding period.

Almost 400,000 active consumers were added during the quarter, bringing the total to over 2.6 million active consumers – up 126.6% year on year. It also added 7,300 active merchants, the largest quarterly increase in the company’s history.

Sezzle’s consumer profile continued to improve as active consumer repeat usage grew to 90.7%. That was the 27^th consecutive month of improvement.

The company is expecting improved margins as more of its payment volumes move towards the automated clearing house as a payment method.

Broker opinion on the Sezzle share price

Broker Ord Minnett was impressed by Sezzle’s quarterly numbers, particularly the UMS, average usage of consumers and income.

Ord Minnett has set a price target of $11.90 on the buy now, pay later business. That suggests a potential rise of more than 30% over the next 12 months.

The post Why the Sezzle share price has rocketed 18% this week appeared first on The Motley Fool Australia.

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Rio Tinto Limited (ASX: RIO) announced the appointment of Western Australia’s former Aboriginal affairs minister, Ben Wyatt, to its board today.

At the time of writing, the Rio Tinto share price is trading at $124.16, 2.24% lower than yesterday’s close.

Let’s take a look at Rio Tinto’s appointment of Wyatt and his past interactions with the company.

A shared history

In his role as Aboriginal affairs minister, Wyatt slammed Rio Tinto for its destruction of 46,000 year old rock shelters in the Juukan Gorge last May.

The mining giant legally blew up the culturally and historically significant site despite protests from Indigenous groups and archaeologists.

As a result, two of Rio Tinto’s senior executives and its CEO left the company in September, albeit with healthy payouts. Rio Tinto’s former chair Simon Thompson later left his position as well, as a result of the backlash.

In September 2020, Wyatt was quoted by ABC News as saying:

What has happened with Rio Tinto, they have a great absence in the Pilbara now, they don’t have an understanding of the community in which they generate the vast majority of their earnings.

One of the greatest risks to their operation is the fact that they don’t appear to have a significant presence as a company. I don’t mean the local executives and the local team here, but as a board.

Rio Tinto’s new board member

Wyatt will join the Rio Tinto board as a non-executive director in September this year. He has held government roles as Western Australia’s treasurer, minister for Aboriginal affairs, minister for finance, and minister for energy.

Rio Tinto’s announcement of his appointment quoted Wyatt as saying:

I have deep respect for the resources sector in Australia and have long been impressed with the professionalism and commitment demonstrated by Rio Tinto.

I was deeply saddened and disappointed by the events at Juukan Gorge but I am convinced that Rio Tinto is committed to changing its approach to cultural heritage issues and restoring its reputation, particularly in Australia and Western Australia.

Commentary from management

Commenting on Wyatt’s appointment, Rio Tinto chair Simon Thompson said:

With family links to the Pilbara and an impressive track record in public life, Ben’s knowledge of public policy, finance, international trade and Indigenous affairs will significantly add to the depth of knowledge on the board at a time when we are seeking to strengthen relationships with key stakeholders in Australia and around the world.

Rio Tinto share price snapshot

The Rio Tinto share price has performed well on the ASX lately. Currently, the Rio Tinto share price is 7% higher than it was at the start of 2021. It’s also gained 25% since this time last year.

The mining giant has a market capitalisation of around $47 billion, with approximately 1.6 billion shares outstanding.

The post What’s with the Rio Tinto (ASX:RIO) share price today? appeared first on The Motley Fool Australia.

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