Disclaimer & Disclosure of Interest

Publications by Global Mining Research have been prepared by Global Mining Research Pty Limited (ACN 103 939 475) (“GMR”) an Australian Financial Services Licensee (AFSL 486912).  Whilst the information contained in these publications has been prepared with all reasonable care from sources which GMR believes to be reliable, no responsibility or liability is accepted by GMR for any errors or omissions or misstatements however caused.  Any opinions, forecasts or recommendations reflects the judgement and assumptions of GMR as at the date of publication and may change without notice.  GMR and their officers, agents, employees, consultants and their related bodies corporate, exclude all liability whatsoever, in negligence or otherwise, for any loss or damage relating to this document to the fullest extent permitted by law.

These publications are not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.  Any securities recommendation contained in these publications are unsolicited general information only.  GMR is not aware that any recipient intends to rely on these publications or of the manner in which a recipient intends to use it.  In preparing such general advice, it is not possible to take into consideration the investment objectives, financial situation or particular needs of any individual recipient.  Investors should obtain individual financial advice from their investment advisor to determine whether recommendations contained in these publications are appropriate to their investment objectives, financial situation or particular needs before acting on such recommendations.

GMR, their officers, employees, consultants and their related bodies corporate have not and will not receive, whether directly or indirectly, any commission, fee, benefit or advantage, whether pecuniary or otherwise in connection with making any recommendation contained in these publications and/or on this web site.  GMR disclose that from time to time it may perform paid services for the companies that are the subject of such recommendations.  However, under no circumstances, has GMR been influenced, either directly or indirectly, in making any recommendation contained in these publications and/or on this web site.

These publications have not been approved for the purposes of section 21 of the UK’s Financial Services and Markets Act 2000, and accordingly is only provided in the UK for the use of persons to whom communications can be made without being so approved, as detailed in the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, and in particular articles 19 (investment professionals) and 49 (high net worth bodies) of that Order.

These publications are for distribution only to U.S. Major Institutional Investors (“MII”) as such term is defined in SEC Rule 15a-6.


Analyst’s Certification

Each analyst whose name appears on the front page of a report hereby certifies that the views expressed in the report accurately reflect the analyst’s personal views about the subject company.  Each analyst also certifies that no part of his compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in the report.

Analysts who prepared the report are compensated based upon the overall profitability of GMR.  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.  GMR does not undertake investment banking activities.

Analysts employed by GMR are not registered as research analysts with FINRA and therefore may not be subject to FINRA Rule 2241 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Research analysts employed by GMR including immediate family members being spouses, partners and children of the research analysts and/or family companies or family trusts controlled by the research analysts do not hold shares directly or indirectly (other than through widely available investment funds or trusts) in the companies under coverage. 


Sector Risk Disclosure

In addition to the risks involved in investing in financial markets generally, the mining sector is subject to additional risks including commodity price and exchange rate volatility affecting earnings and valuations, government restriction, interference and legislation, changes to mining plans and scope including feasibility studies, technical failures, permitting and environmental issues, operational problems and financing risks.


Rating Structure

BUY – GMR’s top rating category with the shares forecast to outperform its sector and provide attractive returns when considering risk profiles.  The rating carries a minimum total return threshold of 15% for companies that have tangible underlying assets that give a measure of support to the market valuation.  The rating category considers both absolute and relative values.

SPEC BUY – Investment for risk accounts only.  The security has strong upside although its risk profile leaves the potential for significant downside.  Return expectations should generally exceed those of BUY to allow for the additional risk.

HOLD – The security is forecast to trade in line to its underlying sector.  The rating carries a total return threshold in the range of +/- 15% for companies that have tangible underlying assets that give a measure of support to the market valuation.

SELL - The security is forecast to under-perform its underlying sector.  The rating carries a total return threshold of below 15% for companies that have tangible underlying assets that give a measure of support to the market valuation.


Ratings Distribution

GMR attempts to maintain one third of companies under coverage as Buy or Spec Buy rated, one third as Hold rated and one third as Sell rated.  These proportions may vary from time to time due to market conditions, share price movements, commodity price fluctuations and other external forces. 

The amount of companies covered with positive ratings with investment banking relations is nil: GMR does not have investment banking relations with any companies researched.

 As at 24th May 2017, our rating distribution is 40% Buy, 44% Hold and 17% Sell's.

Valuation Methodology

The Net Present Value (NPV) of a company is based on a discounted cash flow analysis using a 10% nominal discount rate unless stated otherwise.  The NPV consists of a value for each project or mine together with the net cash position, hedge books and options/warrants on a fully diluted basis.

The Target Price considers both the short-term market parameters and the longer-term cash flow captured by NPV of the stock.  The short-term calculation consists of the three-year relative average EV/EBITDA ratio adjusted for mine life and growth.  The longer-term calculation considers the NPV adjusted for the market capitalisation of the stock.  The Target Price is the average of the short-term and longer-term valuation adjusted for perceived risk and is based on a 12 month view.

The NPV, Target Price and Recommendation are regularly maintained for each stock, but GMR does not necessarily intend to publish research on the basis of any changes.


Confidentiality and Copyright

Publications are only for the person(s) or organisations that are clients of GMR.  These publications are not for public circulation or reproduction whether in whole or in part and is not to be disclosed to any person other than the intended recipient.  These publications should not be passed, directly or indirectly, to persons outside your organisation.

Unauthorised reproduction, distribution, transmission or publication of this document without the prior written consent of GMR is strictly prohibited.