Investors gave a modest thumbs up to the news from gold producer Saracen Minerals that it had abandoned plans to pay its first-ever dividend in the wake of buying 50% of the Super Pit open-cut gold mine in WA.
Saracen has provided a strong exploration update featuring positive drilling results in all areas, Macquarie notes. The broker anticipates mine life extension at Deep South and expects Thunderbox to accelerate now underground drilling is underway.
Macquarie upgrades production forecasts for Saracen Mineral, based on strong drilling results from Whirling Dervish and Karari. A smaller but higher-grade underground mine at Thunderbox will reduce capital expenditure and accelerate development without affecting overall production, the broker adds.
The title above today’s initiation report gives it all away: "The new mid-tier gold miner". Citi analysts forecast strong YoY FY17 growth for revenues and profits. And growth is expected to continue in FY18/19/20 carried by expanded production and multiple new mines.