In today’s briefing:
- Star Entertainment (SGR AU): Hard Rock Rolls The Dice
- Ricegrowers Ltd – Ample rice encourages lower plantings
- Champion Iron (CIA CN): Another Expansion Iron Ore Pure Play on High-Grade Ore
- Alkane Resources – Kaiser takes on the World
Star Entertainment (SGR AU): Hard Rock Rolls The Dice
- Troubled casino operator Star Entertainment (SGR AU) announced it had “received inbound interest” from several parties, including “Hard Rock Hotels & Resorts … a local partner of Hard Rock”.
- Star is in the doghouse, again, as the regulator conducts (another) review amid concerns Star did not do enough to remedy the problems identified in the first review.
- Facing “serious and systemic non-compliance” with anti-money laundering laws, Star faces the distinct possibility of losing is casino licence in Sydney; and potentially the one in Queensland.
Ricegrowers Ltd – Ample rice encourages lower plantings
- Ricegrowers Limited, trading as SunRice (ASX:SGLLV), has updated rice growers on paddy prices for CY23 and CY24, and more importantly provided planting guidance for CY25.
- Despite additional US supply and continued shipping disruptions, the lower end of the CY23 paddy price range (sold from FY24) has been increased $10/tonne to $425/tonne.
- The CY24 price range is unchanged at $370 to $430/tonne given the above uncertainties.
Champion Iron (CIA CN): Another Expansion Iron Ore Pure Play on High-Grade Ore
- Following our initiation on Mount Gibson Iron (MGX AU) and Kumba Iron Ore (KIO SJ), recently we initiate coverage on Champion Iron (CIA AU), a pure play with Canadian assets.
- Although it is more richly priced than the other two names, it offers a 50% volume expansion opportunity in FY25/26, subject to financing availability.
- Trading at 8.6x FY25 (March-end) PE, 4.6x EV-EBITDA, and a 6% dividend yield (subject to capex), this is not our favorite name at the current price due to production uncertainty.
Alkane Resources – Kaiser takes on the World
As with Boda before it, April’s resource update at Kaiser saw substantially all of its resource promoted from the inferred to the indicated category at a materially higher grade of both gold and copper. The close-spaced nature of the drilling required to achieve this will now allow these resources to be quickly and easily promoted to reserve status for the purpose of Alkane’s scoping study – or preliminary economic assessment – to be announced later this quarter.