Sector reports

Below is a list of sector reports.

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Mining

08/11/2016
Graphite for batteries - Value in natural graphite
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As growth in electric vehicle and power storage accelerates, so in turn, it will require large amounts of the carbon allotrope graphite to meet an estimated 22% CAGR in battery graphite demand linked to construction and full utilisation of battery manufacturing facilities worldwide. In this note we address the complexity of graphite resources, their development, market dynamics, product pricing, and provide an introductory view of Volt Resources ahead of the release of its Namangale Project Pre-Feasibility Study due in Q416. Volt is an ASX-listed junior with a resource well positioned to deliver a high-quality natural graphite feedstock to battery manufacturers. In this report, we pay attention to the use of natural graphite in batteries – the strongest driver to growth in demand.

Companies mentioned
Volt Resources Ltd , See more..., Archer Exploration, Black Rock Mining, Energizer Resources, Graphex Mining, Hexagon Resources, Kibaran Resources, Magnis Resources, Mason Graphite, Metals of Africa, Sovereign Metals, Syrah Resources, Triton Minerals, Volt Resources, Walkabout Resources.

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Mining

14/10/2016
Gold and other metals: Normalisation augurs well for exploration
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Over the past two years, there has been a 67.4% recovery in the in-situ value of a global average resource ounce, from US$10.06/oz in August 2014 to US$16.84/oz currently, and a relative normalisation of the market regarding the average valuations of the three JORC resource categories. Assets remain cheap. Nevertheless, the financial return from drilling a 1Moz gold resource is now positive, on average, for the first time since August 2013 (although not necessarily for assets listed in Canada). By contrast, financial returns from both uranium and PGM exploration have deteriorated. In the meantime, exploration to delineate measured resources is likely to be a value-destructive exercise for a number of (typically) ‘bulk’ commodities, although these tend to be minerals that also benefit from the market’s discounting of future exploration success.

Companies mentioned

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All Sectors

10/10/2016
The future of equity research
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The society welcomes the current review of the research business model as an opportunity to consider if the system works in clients’ best interests and to consider what improvements are needed.

Companies mentioned

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Investment Companies

26/09/2016
Listed Private Equity - The opportunities and challenges for investors
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In the first part of a series of reports on listed private equity (LPE), we examine the key opportunities and issues for investors.

Companies mentioned
Show companies...3i Group, Aberdeen Private Equity Fund, Altamir SCA, Candover Investments, Deutsche Beteiligungs, Electra Private Equity, F&C Private Equity Trust, GIMV NV, HarbourVest Global Private Equity, HBM Healthcare Investments, HBM Healthcare Investments, ICG Enterprise Trust, ICG Enterprise Trust, NB Private Equity Partners, Oakley Capital Investments, Pantheon International, Princess Private Equity Holding, Scottish Mortgage Investment Trust, Standard Life European Private Equity Trust, SVG Capital, Woodford Patient Capital Trust

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Oil & Gas

22/09/2016
Exploration watch - Barents Sea - frontier drilling in 2017
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The Barents Sea to the north of Norway is estimated to contain almost half of the recoverable undiscovered resources remaining in the Norwegian Continental Shelf (NCS). At present only two fields, Statoil’s Snøhvit and Eni’s Goliat, are in production but a number of discoveries since 2011 have the potential to be standalone developments and are currently being appraised. The recent 23rd licensing round awarded acreage exclusively in the Barents and for the first time included the frontier South East Barents. Statoil has already indicated that it plans to drill the high-risk/high-reward Korpfjell prospect located in PL859 in this frontier area as part of a five- to seven-well Barents exploration programme in 2017.

Companies mentioned

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Financials

12/09/2016
Tel Aviv Stock Exchange - Start-up market?
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Israel’s technology and healthcare industries together make up one of the strongest hubs of value creation globally. Until now this value creation has largely bypassed the Tel Aviv Stock Exchange (TASE), with trade sales or overseas exchanges preferred to a domestic listing. Far-reaching reforms are now being put in place to change this. Success will make it much easier for domestic and international equity investors to support and benefit from this hub of value creation.

Companies mentioned

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Oil & Gas

02/09/2016
Value the company, not the asset
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In preparation for a new oil cycle, we believe investors should re-examine the critical components of the valuation of oil companies to ensure lessons are learnt from the last cycle. We think investors should look at fundamental company valuations (rather than asset values in isolation) to price investment opportunities. By this, we mean take into account all the risks and costs that companies run into when progressing assets that may negatively affect the asset value. We primarily look at examining the costs to equity investors of holding E&P stocks in the last cycle and the associated equity and asset dilutions required to fund operations; we conclude that this effect may be larger than many currently assume.

Companies mentioned

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Mining

11/08/2016
Niobium - The envy of the gods
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The growing recognition of niobium as a vital new-age metal with limited supply was reflected in Anglo American’s recent sale of Catalão. The auction process was keenly competitive and resulted in Anglo selling Catalão for US$1.5bn, c 50% more than previous market forecasts. Two years earlier, in 2014, Magris Resources (owned 50% each by Cheung Kong and the Canadian Imperial Bank of Commerce) and Temasek acquired Niobec from IAMGOLD for c US$500m and, in 2011, Posco and Nippon jointly invested c US$2.0bn for a 15% interest in CBMM, followed by a Chinese consortium comprising CITIC, Baosteel and Shougang on similar terms, shortly afterwards.

Companies mentioned
Show companies...Companhia Brasileira de Metalurgia e Mineração (CBMM), Mineração Catalão, China Molybdenum, Magris Resources, Anglo American, IAMGOLD, Cradle Resources, Alkane Resources