18 Share Tips – 23 April 2018

Darren Jackson, Sanlam Private Wealth
BUY RECOMMENDATIONS TNG Limited (TNG)

TNG is developing a world class vanadium-titanium-iron project in the Northern Territory. The company’s enterprise value has barely moved in the past two years. Meanwhile, the vanadium price has more than quadrupled and the titanium price is up more than 50 per cent. Sanlam recently completed an institutional placement for TNG, helping to strengthen its balance sheet and further progress the project.    Seven Group Holdings (SVW)

Iluka Resources (ILU)

A miner of mineral sands, including zircon and rutile. We’ve continued to hold since our buy recommendation on March 12. Rio Tinto’s globally significant mineral sands operation at Richards Bay Minerals in South Africa has been plagued by an industrial dispute. Iluka is an obvious beneficiary of this potential supply disruption. Alumina (AWC)

Owns 40 per cent of Alcoa World Alumina and Chemicals (AWAC) in partnership with Alcoa. We’ve continued to hold since January 29. The aluminium price has surged in response to US sanctions imposed on the world’s second largest producer, the Russian United Company Rusal. Given this, AWC should continue to outperform. SELL RECOMMENDATIONS Transurban Group (TCL)

In line with our global rising interest rate theme, we expect earnings multiples to be pressured on bond like equities, including Transurban. In our view, this toll road operator is expensive given it was recently trading on a forward price/earnings multiple above 50 times.  Blue Sky Alternative Investments (BLA)

The company announced it would commission an independent review with the objective of enhancing Blue Sky’s disclosures around financial reporting, including valuations. The company’s share price has been slashed from $14.60 on January 5 to close at $3.63 on April 19. We still can’t find value here and believe it’s best avoided.

Gavin Wendt, MineLife
BUY RECOMMENDATIONS
Legend Mining (LEG)

The potential for another world class Nova-Bollinger nickel discovery in Western Australia’s Fraser Range province is driving interest in LEG. The latest air core drilling results have been described as the most significant since the Nova-Bollinger nickel-copper discoveries by Sirius Resources a few years back. LEG believes the project has the potential to contain numerous mineralised intrusions, akin to the Thompson Belt in Canada. The shares were trading at 3.7 cents on April 19.
Centaurus Metals (CTM)

CTM has generated exciting maiden nickel and cobalt drilling results along a 3.3 kilometre strike length at its Itapitanga Project in Brazil. The Itapitanga Project tenement covers 50 square kilometres of highly prospective ground at the southern extension of the same ultramafic?mafic intrusive complex that hosts Anglo American’s world class Jacare nickel-cobalt deposit and several unpublished nickel?cobalt resources held by Vale. The shares were trading at 1.3 cents on April 19.
HOLD RECOMMENDATIONS
Lake Resources N.L. (LKE)

LKE maintains one of the largest lithium tenement packages in Argentina with about 170,000 hectares in close proximity to some of the largest players in the lithium sector. Its three key lithium brine projects are located within an area known as the Lithium Triangle, which produces half of the world’s lithium. Market interest remains strong as the company has introduced a third drilling rig to assist its maiden drilling program currently underway on its Kachi project.
Emmerson Resources (ERM)

ERM has released encouraging maiden exploration results from appraisal work on its Jasper Hill prospect situated within the under explored northern corridor region at its Tennant Creek project. Although still very much early days, the indicative historic cobalt grades compare favourably to other Australian projects.
SELL RECOMMENDATIONS
King River Copper (KRC)

KRC is undertaking a vanadium concept study on its 100 per cent owned Speewah project in Western Australia, which is examining production from a high grade zone of the central vanadium deposit. Speewah contains one of the world’s largest undeveloped titanium/vanadium-in-magnetite deposits. The primary objective is to identify whether new hydrometallurgical technologies can provide a lower cost, lower risk development approach that will form part of a scoping study. Investors might look to realise some profits.
Argosy Minerals (AGY)

AGY has been one of the best performers in the lithium sector, generating strong gains on the back of ongoing lithium news flow from its Rincon Project in Argentina’s Lithium Triangle. Stage II development at Rincon is progressing, while production of lithium carbonate from Stage I is expected within months. The company recently completed a Stage I pilot plant in preparation for lithium concentrate processing test work. Investors might look to realise some profits.

Les Szancer, XX-LEM Financial Services
BUY RECOMMEMNDATIONS
Rio Tinto (RIO)  

I get tired of hearing the mining boom is over. Rio recently posted solid first quarter production results. Pilbara iron ore shipments in the 2018 first quarter grew by 5 per cent on the prior corresponding period to 80.3 million tonnes. Pilbara iron ore production rose 8 per cent to 83.1 million tonnes. This stock offers value.
Telstra (TLS)

The stock has been in a long term downtrend to trade at $3.075 on April 20. Looking at the long term chart, the stock is close to its 2010 low and a double bottom could be forming. While most investors would probably be seeking income, there’s room for capital growth.
HOLD RECOMMENDATIONS
Dongfang Modern Agriculture Holding Company (DFM)  

This Chinese agricultural company continues to lift revenue and profits. It’s focused on productivity improvements at its plantations in China. It’s also looking to grow via acquisitions. On January 3, the shares were priced at 86 cents. The shares were trading at $1.07 on April 20.
Axiom Mining (AVQ)

This long and seemingly never-ending saga in relation to the outcome of the Solomon Islands nickel project is surely coming to an end. Japan’s Sumitomo Metal Mining announced its withdrawal in August. Licence applications are pending approval.
SELL RECOMMENDATIONS
Seven West Media (SWM)

SWM will become the free-to-air broadcaster of cricket for the next six years. The SWM deal involving Foxtel ends Nine’s domination of the sport for the past four decades. SWM shares enjoyed a short spike, but soon retreated. Traditional media continues to face challenging times as it competes for advertising with the online giants. Better options elsewhere. SWM shares were trading at 51.7 cents on April 20.
Myer Holdings (MYR)

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