110121 Venturex VXR final · 2018-08-21 · Argonaut Securities Research 1 Venturex Resources 21...
Transcript of 110121 Venturex VXR final · 2018-08-21 · Argonaut Securities Research 1 Venturex Resources 21...
Argonaut Securities Research 1 Venturex Resources
21 January 2011
Nothing ventured, nothing gained
Acquisition of Panorama Cu-Zn Project:
Copper-zinc developer Venturex Resources (VXR) is acquiring the Panorama Cu-Zn
project, located 160km south east of Port Hedland, from Toho Zinc Co (Toho) for
$26.2m. The resource base is 19.3Mt @ 1.2% Cu, 3.2% Zn, and 16g/t Ag.
VXR is seeking to raise $36.8m via a 15% placement of ~98.3m shares at $0.09 to raise
~$8.8m, and a fully underwritten, non-renounceable 2:5 accelerated entitlements issue
to existing shareholders (Entitlements Issue) to raise ~$28m.
Proceeds from the capital raising will be used to fund the acquisition of Panorama, fast
track feasibility studies combining the existing Pilbara asset suite, regional exploration
and ongoing working capital requirements.
Impact: Positive
The Panorama acquisition provides VXR with ‘critical mass,’ by more than tripling the
resource base to 27Mt @ 2.2% Cu Eq (>580kt Cu Eq). A centralised 1Mtpa processing
hub at Whim Creek could deliver average production of 27ktpa Cu Eq over 9 years.
View: Positive
The addition of Panorama is a logical step towards creating a meaningful base metals
producer. Output will be underpinned by an equal blend of open pit ore from Mons Cupri
and underground ore from Panorama over the first six years. Cash costs (<US$0.50/lb
Cu) compare favourably among the emerging 20 – 40ktpa copper production peer group,
given the value of by-product credits.
Exploration upside within VXR’s consolidated VMS package is excellent. The Pilbara
Project contains 7.6Mt in four known deposits (Salt Creek, Whim Creek, Mons Cupri and
Liberty-Indee) compared to the global experience of up to 25 pods in a field.
Recommendation: Spec Buy
Argonaut values the enlarged VXR at $0.25ps. It is the cheapest stock in its peer group
of developers on the Funded EV / production metric.
Venturex
SPECULATIVE BUY
Research
Analysts: Tim Serjeant Troy Irvin
Important Disclosures Argonaut is acting for VXR as the Sole Lead Manager, Sole Underwriter and Sole Book Runner (entitlement issue only) to the institutional placement and accelerated entitlements issue and has entered into an underwriting agreement with VXR to underwrite approximately $28.0m of the raising in January 2010. Argonaut acted as Corporate Advisor to VXR throughout the transaction to acquire the Panorama Copper Zinc Project. Argonaut will earn fees commensurate with its role in this transaction. Argonaut has previously acted for Venturex and has earned fees commensurate with those services. Argonaut holds or controls a material shareholding in Venturex, including 38,796,504 million shares and 10,526,316 options exercisable at $.095. Argonaut intends to take up its Entitlements under the Entitlements Issue. Mr. Michael Mulroney is also a director of a company within the Argonaut Group of Companies as well as holding a non-executive directorship of Venturex. Argonaut and the Directors of Argonaut advise that they and persons associated with them may have an interest in VXR securities and that they may earn brokerage, commissions, fees and other benefits and advantages, whether pecuniary or not and whether direct or indirect, in connection with the making of a recommendation or a dealing by a client in these securities, and which may reasonably be expected to be capable of having an influence in the making of any recommendation, and that some or all of our Representatives may be remunerated wholly or partly by commission.
$0.00
$0.02
$0.04
$0.06
$0.08
$0.10
$0.12
$0.14
Jan-10 Apr-10 Jul-10 Oct-10 Jan-11
0.0
5.0
10.0
15.0
20.0
Current Price:Valuation: $0.25
Ticker: VXR
Sector: Materials
Shares on Issue (m)*:
Market Cap (A$m)*: 152.2
Net Cash (A$m)*: 13.7
Enterprise Value (A$m)*: 138.5
*Post Capital Raising
52 wk High/Low: $0.15 $0.06
12m Av Daily Vol (m):
Board and Management
Tony Kiernan Chairman
Tim Sugden Managing Director
Anthony Reilly Executive Director
Allan Trench Non-Executive Director
Michael Mulroney Non-Executive Director
Substantial shareholders^:
Regent Pacific 19.2%
Straits Resources 15.7%
Argonaut 5.4%
^Pre Capital Raising, undiluted
Share Price Graph
0.45
$0.14
1,087.2
Argonaut Securities Research 2 Venturex Resources
VXR to acquire the Panorama Cu-Zn Project for $26.2m
Proceeds from a $36.8m capital
raising…
…will be used to fund the acquisition of Panorama…
…and fast track feasibility studies combining the existing Pilbara asset suite
Acqusition of the Panorama Cu-Zn Project
Background
Venturex Resources (VXR) is acquiring the Panorama Cu-Zn Project from CBH Resources Ltd (a wholly owned subsidiary of Toho Zinc Co Ltd) for $26.2m, located 160km by road south east of Port Hedland. The project includes the Sulphur Springs copper-zinc VMS orebody, with a resource of 19.3Mt @ 3.2% Zn, 1.2% Cu, and 16g/t Ag. Toho will retain off-take rights for the first 230kt of zinc concentrate from Panorama at international benchmark terms
A number of feasibility studies have been completed during the history of Panorama (Sulphur Springs was discovered in 1984). In 2008 CBH Resources (CBH) planned to extract the ore via open-pit mining, however this was placed on hold due to the overall cost structure of the project, decreasing metal prices and less favourable market conditions. Toho acquired the asset as part of the takover for CBH, which was completed in September 2010. A new plan to extract the high grade central zone (2.2% Cu, 6.2% Zn) of the ore body using underground methods has since been developed as the preferred option, and this approach will be adopted by VXR.
Proposed Capital Raising
VXR is seeking to raise $36.8m via a:
• 15% placement (Placement) of ~98.3m shares at $0.09 to raise ~$8.8m and;
• Fully underwritten, accelerated 2:5 non-renounceable entitlements issue to existing shareholders (Entitlements Issue) to raise ~$28m
Key shareholder, Regent Pacific, will sub-underwrite a major portion (74.2%) of the Entitlements Issue. Regent’s shareholding is likely to range between 23.6% - 27.9% post the Capital Raising, depending on the shortfall.
Proceeds from the Placement and Entitlements Issue will be used to fund the acquisition of Panorama, fast track feasibility studies combining the Pilbara asset suite as well as regional exploration and ongoing working capital requirements.
Table 1: Transaction snapshot
Transaction snapshot
15% Placement
New shares issued m 98.3
Sub total m 776.6
2:5 Entitlements Issue
New shares issued m 310.6
Total shares outstanding m 1087.2
Funds Raised (before costs)
- Placement $m 8.8
- Entitlements Issue $m 28.0
SUM 36.8
Source: Argoanut (unless stated otherwise)
Argonaut Securities Research 3 Venturex Resources
The addition of Panorama is a logical step towards creating a meaningful base metals miner…
…with 27 Mt @ 2.2% Cu Eq
(>580kt Cu Eq) in resources…
…and annual production of 38kt Zn and 16kt Cu over 9 years
Creating a meaningful base metals producer
Logical step
The addition of Panorama to VXR’s existing Pilbara asset suite is a logical step, which could ultimately transform the Company into a meaningful Cu-Zn producer.
Figure 1: Project Location
Source: VXR
Panorama provides VXR with ‘critical mass’ in a known VMS field, with the Resource base more than tripling to 27Mt @ 2.2% Cu Eq (>580kt Cu Eq).
Table 2: Combined Reserve and Resource Base
Combined Reserve & Resource Position
Reserves Mt Cu % Zn % Pb % Ag g/t Au g/t Cu Eq %
Pilbara VMS 4.5 1.4% 2.8% 0.9% 33.9 0.3 2.8%
Panorama 3.9 2.2% 6.2% 0.0% 25.3 0.0 4.1%
TOTAL 8.4 1.8% 4.4% 0.5% 29.9 0.1 3.4%
Resources Mt Cu % Zn % Pb % Ag g/t Au g/t Cu Eq
Pilbara VMS 7.6 1.2% 2.2% 0.7% 26.1 0.2 2.2%
Panorama 19.3 1.2% 3.2% 0.2% 16.1 0.0 2.2%
TOTAL 26.9 1.2% 2.9% 0.3% 18.9 0.1 2.2%
The addition of Panorama provides significant economies of scale, allowing VXR to leverage off established infrastructure at Whim Creek.
The creation a centralised 1Mpta processing hub at Whim Creek could deliver annual production of 38kt Zn and 16kt Cu over 9 years, underpinned by an equal blend of open pit ore (Mons Cupri) and underground feed from Panorama (transported via road haulage) over the first six years.
Table 3 illustrates the enhanced economics via the combination of the two projects as opposed to development on a ‘standalone’ basis.
Argonaut Securities Research 4 Venturex Resources
VXR’s annual production doubles from 13kt to ~27kt (Cu Eq basis)
Among the emerging 20 – 40ktpa copper producers
…VXR’s cash costs (US$/lb Cu) compare favourably
Table 3: VXR + Panorama
Combined v Standalone basis
VXR* CBH / Toho Combined
Project Pilbara VMS Panorama VXR + Panorama
Mining Inventory Mt 4.5 3.9 8.3
Grade % Cu Eq ^ 2.8% 3.9% 3.4%
Throughput ktpa 600 600 1,000
Metal in Conc
- Zinc ktpa 14 34 38
- Copper ktpa 8 12 16
- Lead ktpa 4 - 3
Cu Eqv 13 20 27
Mine Life yrs 9 7 9
First Production yr FY13 - FY13
Capex 96 163 135-145
* From November 2010 Scoping Study
^Based on current spot metal prices
^^Net of Ag and Au by product credits
VXR’s average annual production production (on a Cu Eq basis) doubles from 13kt to ~27kt (on a Cu Eq basis), results in dramatic capital cost savings and transforms the Company into a meaningful base metals producer.
Peer Comparison
Figure 2 benchmarks the enlarged entity against a number of ASX listed copper developers.
Among the emerging 20 – 40ktpa copper production peer group, VXR’s cash costs (US$/lb Cu) compare favourably, given the value of precious metal by-product credits associated with the concentrates.
Figure 2: ASX listed Copper developers
SFR RXM
TGS
VXR
CGG
CDU
DML
HGOEXS
AOH
AVIFND
0
20
40
60
80
100
0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00
Cash Costs (US$/lb Cu)
Cu Eq Production (kt pa)
Note: Bubble Size - Fully Funded Enterprise Value (FFEV) = EV + Capex
Argonaut Securities Research 5 Venturex Resources
On the Funded EV / production metric…
…VXR is the cheapest stock in its peer group
With VXR exhibiting similar characteristics to established producer JML…
…the opportunity is to mimic its trajectory …
…and attract the market re-rating attached to producers
Figure 3 plots VXR against its peer group on a Funded Enterprise Value (EV + Capex) to annualised copper (Eq) production basis.
On this metric, VXR is the cheapest stock amongst the copper developer peer group.
Figure 3: Fully Funded EV/ Annualised Copper Eq production (forecast)
0
5,000
10,000
15,000
20,000
25,000
30,000
CGG CDU DML SFR HGO EXS RXM AOH AVI FND TGS VXR
FF EV/Production ($/t Cu Eq)
Jabiru Mark II
VXR exhibits similar characteristics to established producer Jabiru Metals (JML).
JML has a market capitalisation of ~$350m and currently produces ~10kt Cu and 30kt Zn per annum (c.f VXR – 16kt Cu and 38kt Zn) from its Jaguar operations. JML also benefits from significant by-product credits (gold and silver) and controls a dominant strike position (~50km) in a proven VMS belt (c.f VXR ~36km).
The opportunity for VXR is to mimic the trajectory of JML and attract the market re-rating attached to producers.
Figure 4: Re-rating potential
SFRRXMCGG
CDU
DML
HGO
EXS
AOHTGS
AVI
FND
VXR
JML
0
20
40
60
80
100
0 5,000 10,000 15,000 20,000 25,000 30,000
FF EV/Production ($/t Cu Eq)
Cu Eq Production (kt pa)
Argonaut Securities Research 6 Venturex Resources
Argonaut values VXR at $272m or $0.25 per share
The valuation is most sensitive to movements in fx and copper pricing assumptions
At current spot prices, the valuation rises ~35% to $0.34 per share
Valuation
Argonaut’s commodity and exchange rate pricing assumptions are presented in Table 4.
Table 4: Commodity and FX Assumptions
Pricing Assumptions
FY11F FY12F FY13F FY14F LT
Copper US$/lb 3.75 4.00 3.75 3.50 2.25
Zinc US$/lb 1.00 1.10 1.20 1.20 0.85
Lead US$/lb 1.00 1.00 1.00 1.00 0.85
Silver US$/oz 20 20 20 20 20
Gold US$/oz 1,311 1,250 1,200 1,150 900
AUD A$:US$ 0.96 0.95 0.95 0.95 0.80
We derive a valuation of $272m or $0.25 per share for the enlarged VXR.
Table 5: Summary Valuation
Valuation
Sum of the parts $m $/sh
Pilbara VMS + Panorama 235 0.22
CMG Gold (Brazil) 10 0.01
Exploration 10 0.01
Investments 0 0.00
Tax Losses 15 0.01
Unpaid Capital 0 0.00
Corporate -12 -0.01
Cash (post acquisition) 14 0.01
Debt (estimate) 0 0.00
Total @ 11% Discount Rate 272 0.25
Key financial outputs over the first five years are presented in Table 6.
Table 6: Financial Summary
Financial Summary
FY11 FY12 FY13 FY14 FY15 FY16 FY17
Revenue $m 0 0 225 225 208 200 207
Opex $m 3 6 121 122 124 125 126
EBITDA $m -6 -10 100 99 79 71 78
NPAT $m -4 -7 59 58 45 39 44
Net Op CF $m -7 -8 82 81 62 53 58
Capex $m 26 138 11 7 7 7 7
FCF $m -36 -151 66 69 50 41 46
Sensitivities
The valuation is most sensitive to movements in fx and pricing assumptions, specifically copper prices given Cu production equates to ~56% of total revenues.
Table 7: Sensitivities
Sensitivity Analysis
-20% -10% 0% +10% +20%
Discount Rate 13% 7% 0% -6% -11%
FX 68% 30% 0% -24% -12%
Price Deck -38% -19% 0% 19% 38%
Capex 8% 4% 0% -4% -12%
Opex 25% 13% 0% -12% -25%
At current spot prices, the valuation rises ~35% to $0.34 per share.
Argonaut Securities Research 7 Venturex Resources
VXR’s business plan is to feed a centrally located 1.0Mtpa plant…
…with ore from five currently known VMS deposits
Potential production is 38kt Zn and 16kt Cu at C1 cash costs of <US$0.50/lb
Open pit mining methods will be employed initially at Mons Cupri and Whim Creek…
…with significant potential for underground extensions at a later date
Pilbara VMS project + Panorama
Hub Strategy
VXR’s business plan is to feed a centrally located 1.0Mtpa polymetallic treatment facility at Whim Creek with a combination of open pit and underground ore from five currently known VMS deposits. Total reserves are 8.3Mt @ 3.4% Cu eq.
Table 8: Reserves & Resources - by deposit
Reserves & Resources - By Deposit
Reserves Mt Cu % Zn % Pb % Ag g/t Au g/t
Mons Cupri 2.8 1.1 1.8 0.8 32.1 0.2
Whim Creek 0.7 1.7 1.1 0.2 8.9 0.1
Salt Creek 0.6 1.7 8.2 2.6 67.3 0.3
Liberty-Indee 0.4 2.2 4.5 0.4 40.7 0.9
Panorama 3.9 2.2 6.2 0.0 25.3 0.0
TOTAL 8.3 1.8% 4.4% 0.5% 29.9 0.1
Resources Mt Cu % Zn % Pb % Ag g/t Au g/t
Mons Cupri 4.9 0.9 1.2 0.5 23.1 0.1
Whim Creek 1.0 1.4 1.2 0.2 8.8 0.1
Salt Creek 1.0 2.0 7.0 2.2 52.0 0.3
Liberty-Indee 0.7 1.8 3.7 0.3 35.9 0.8
Panorama 19.3 1.2 3.2 0.2 16.1 0
TOTAL 26.9 1.2% 2.9% 0.3% 18.9 0.1
Potential production is 38kt Zn and 16kt Cu (+ lead, silver & gold) at C1 cash operating cost of <US$0.50/lb over a mine life of 9 years.
Mining
Conventional open pit mining methods at Mons Cupri and Whim Creek pits will produce 3.5Mt at a 5.3:1 strip ratio. Both pits have been pre-stripped for oxide copper and primary ore is immediately accessible.
Figure 5: Mons Cupri pit
There is significant potential for additional resources to the north and northwest of Mons Cupri which may be extracted via decline access from the proposed pit at a later stage.
Argonaut Securities Research 8 Venturex Resources
Liberty-Indee and Salt Creek will initially be open pits…
…while Panorama will be mined using underground stoping techniques…
…with competent ground conditions anticipated
Figure 6: Cross section of Mons Cupri pit shell
Source: VXR
Mons Cupri and Whim Creek are located 2.5km from the proposed plant location.
Liberty-Indee and Salt Creek will be developed initially with small open pits which will then provide decline access to deeper high grade ore positions. Liberty-Indee and Salt Creek are located 35km and 17km, respectively, from the proposed plant location.
Panorama will be mined using bottom-up bench stoping in the narrow sections (>20m wide) of the deposit and long hole open stoping in the wider central section. The orebody comprises several lenses and is split into two zones by the Main Fault, a significant north/south structure.
Figure 7: Panorama – Underground mine schematic
Source: CBH
The ground conditions around this fault are expected to be competent apart from where it is intersected by further structures. Backfill will be an ongoing requirement during the bench stoping operations and an intermittent requirement in the open stopes.
Panorama is located ~260km from the proposed plant location.
Argonaut Securities Research 9 Venturex Resources
Test work suggests an industry standard flow sheet is suitable
The existing crushing circuit is likely to be used…
…with separate copper, and zinc and lead flotation circuits anticipated
Gold and silver are at payable levels and penalty elements are generally below threshold
Installed infrastructure at Whim Creek offers a big advantage
Processing
Test work to date suggests an industry standard flow sheet is suitable.
Preliminary comminution test work has demonstrated medium ore hardness with a Ball Mill Work Index of 16kWh/t for Panorama and 17kWh/t for other ores. A SAG mill, ball mill grinding combination is likely to provide the most operating flexibility. The existing crushing circuit is likely to be used without additional equipment.
Figure 8: The Whim Creek crushing circuit
Separate copper, and zinc and lead flotation circuits are anticipated:
• Copper ores - Recovery 92-93% Cu to a concentrate grading 22-27% Cu
• Zinc-lead ores - Recovery 79-82% Zn to a concentrate grading 48-55% Zn
Gold and silver are at payable levels in the copper concentrate and penalty elements are generally below threshold levels. Further flotation test work will be conducted to optimise metal recoveries and concentrate quality. The installation of a lead flotation circuit is under investigation.
Infrastructure
Installed infrastructure at Whim Creek is a big advantage for VXR.
Table 9: Infrastructure Checklist
Item Check Comment
Power � Total site power demand is expected to be 8MW. A 5km connection to the regional HV line is under consideration. A gas spur to site is also available. The indicative cost range is 15-20c/kWh.
Road � The Northwest Coastal Highway connects the Whim Creek site to Karratha (120km) and Port Hedland (115km). Construction of a 65km access road is required for ore haulage from Panorama to Whim Creek.
Water � Existing aquifers will be used for process water supply.
Port � The copper and zinc concentrates are expected to be shipped from Port Hedland (115km by road) to international markets.
Accommodation � VXR owns the existing Whim Creek accommodation village which can house ~ 120 people. Only minor upgrades would be likely.
Argonaut Securities Research 10 Venturex Resources
The consolidated VMS
tenements present ‘company changing’ opportunities…
…with the Pilbara Project containing >7Mt in four known deposits (Salt Creek, Whim Creek, Mons Cupri and Liberty-Indee)…
…compared to the global experience of up to 25 pods in a field
Exploration upside
VXR’s consolidated Pilbara VMS tenement package presents ‘company changing’ opportunities, similar to those successfully capitalised on by JML at the Jaguar Project.
Figure 9: VXR Project tenement map
Source: VXR
Despite many geological similarities with the Abitibi greenstone belt of Canada, Western Australia is underexplored for VMS deposits. The Abitibi originally contained over 675Mt of polymetallic massive sulphides.
The Abitibi deposits occur in cluster or camps. The average camp size is 9 (range 4-25), and usually include a small proportion of very large deposits (the majority of deposits are small, with ~80% of known deposits in the range 0.1-10 Mt). For example, the Noranda district is 40km long with 110Mt of polymetallic massive sulphides in 25 known deposits.
VXR’s current Pilbara project contains 7.6Mt from 4 deposits (Salt Creek, Whim Creek, Mons Cupri and Liberty-Indee). The Company is highly likely to find more along its ~36km strike (with limited drilling below 150m).
Most local VMS deposits have been expressed at surface as outcropping gossans. However the experience of most Canadian camps features the discovery of buried deposits proximal to known deposits. With deeper deposits likely to be the future of Western Australia’s VMS mining, serious exploration will require increased budgets and the smart application of modern geophysics.
Argonaut Securities Research 11 Venturex Resources
Stock-specific risks include plant commissioning…
…exposure to diesel prices and wet weather events in northern Western Australia…
…structural complexity at Panorama…
…labour shortages in the Pilbara…
… access to a shipping berth at Port Hedland…
… and funding future capex requirements
Risks
Key stock-specific risks include:
Plant commissioning
Copper/zinc differential flotation plants are complicated and have an industry wide track record of taking longer than expected to commission e.g. JML needed ~2 years at Jaguar to ramp-up recoveries to sustainable levels of mid 80%’s for Cu and high 70%’s for Zn.
Figure 10: Jaguar differential flotation plant – recoveries
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Sep Q 07 Dec Q 07 Mar Q 08 Jun Q 08 Sep Q 08 Dec Q 08 Mar Q 09 Jun Q 09
Cu Recovery (%) Zn Recovery (%)
Long distance trucking
VXR’s plan requires ore to be trucked 260km from Panorama to Whim Creek, and concentrate to be trucked ~115km to Port Hedland. The business is therefore exposed to rising diesel prices, and wet weather events in northern Western Australia.
Structural complexity at Panorama
At Panorama at least three key sets of faults that significantly offset mineralisation have been recognised.
However Argonaut notes that the stope geometries, extraction sequence, and ground support (including pillars) have been designed to minimise the impact of faulting.
Labour shortages
Labour shortages in the mining sector are again placing pressure on costs, with workforce quality (experience and skill) also suffering.
VXR will be competing for labour in the “hottest” of all labour markets, Western Australia’s north west, where demand from the oil and gas industry and the large iron ore miners has accentuated the shortage.
Port access
Access to a shipping berth at Port Hedland will need to be secured.
Future funding requirements
VXR will need additional capital in the future to fund the estimated $135m capex required to bring the Pilbara and Panorama projects into production.
Argonaut Securities Research 12 Venturex Resources
VXR’s wholly owned subsidiary CMG is evaluating five
advanced projects in Brazil
The board and management offer a wide range of appropriate skills and
experience
Appendix A: Brazil Gold Assets
VXR’s wholly owned subsidiary CMG Mineração Ltda has established an exploration team in Cuiabá and is evaluating five advanced projects in Mato Grosso and Para covering 92,500 ha.
Figure 11: Brazilian gold explroation projects
Source: VXR
The recently acquired Serra Verde Project in the Tapajós gold district has been operated for more than thirty years as a small-scale alluvial artisanal mining operation, and has the potential to host multiple high-grade gold deposits. The project is located 120km from the Tocantinzinho deposit, which contains a Resource of 2.1Moz Au, and was recently acquired by Eldorado Gold for US$124m.
The primary goal of CMG is to discover a large >1Moz gold deposit.
Appendix B: Board and Management
Tony Kiernan (Chairman)
• Solicitor, currently Chairman of BC Iron (BCI) and Uranium Equities (UEQ), also a Director of Chalice Gold Mines (CHN) and Liontown Resources (LTR)
Tim Sugden (Managing Director)
• Geologist, former founding Director of Agincourt Resources and Nova Energy, currently Chairman of Newland Resources (NRL)
Anthony Reilly (Executive Director)
• Former Director of CMG Gold which was acquired by VXR in July 2009
Allan Trench (Non-Executive Director)
• Geophysicist, former Chairman of VXR, currently Chairman of Navigator Resources and Director of Pioneer Resources (PIO) and Hot Chili (HCH)
Michael Mulroney (Non-Executive Director)
• Geologist, former Managing Director of Breakaway Resources (BRW), Executive Director of Argonaut Capital
Argonaut Securities Research 13 Venturex Resources
Contact Details
Research:
Ian Christie Director Research +61 8 9224 6872
Troy Irvin Director Research +61 8 9224 6871
Tim Serjeant Associate Director +61 8 9224 6806
Gianluca Paglia Analyst +61 8 9224 6824
Institutional Sales:
Paul Carter Executive Director +61 8 9224 6864
Chris Wippl Head of Research & Sales +61 8 9224 6875
John Santul Consultant, Sales & Research +61 8 9224 6859
Damian Rooney Senior Institutional Dealer +61 8 9224 6862
Ben Willoughby Institutional Dealer +61 8 9224 6876
Bryan Johnson Institutional Dealer +61 8 9224 6834
Corporate and Retail Sales:
Kevin Johnson Executive Director +61 8 9224 6880
Glen Colgan Executive Director +61 8 9224 6874
James McGlew Director +61 8 9224 6866
Geoff Barnesby-Johnson Senior Dealer +61 8 9224 6854
Andrew Venn Senior Dealer +61 8 9224 6865
Robbie Hamilton Dealer +61 8 9224 6830
Melaney Brans Dealer +61 8 9224 6873
Cameron Fraser Dealer +61 8 9224 6851
Important Disclosures
Argonaut is acting for VXR as the Sole Lead Manager, Sole Underwriter and Sole Book Runner (entitlement issue only) to the institutional placement and accelerated entitlements issue and has entered into an underwriting agreement with VXR to underwrite approximately $28.0m of the raising in January 2010. Argonaut acted as Corporate Advisor to VXR throughout the transaction to acquire the Panorama Copper Zinc Project. Argonaut will earn fees commensurate with its role in this transaction. Argonaut has previously acted for Venturex and has earned fees commensurate with those services. Argonaut holds or controls a material shareholding in Venturex, including 38,796,504 million shares and 10,526,316 options exercisable at $.095. Argonaut intends to take up its Entitlements under the Entitlements Issue. Mr. Michael Mulroney is also a director of a company within the Argonaut Group of Companies as well as holding a non-executive directorship of Venturex. Argonaut and the Directors of Argonaut advise that they and persons associated with them may have an interest in VXR securities and that they may earn brokerage, commissions, fees and other benefits and advantages, whether pecuniary or not and whether direct or indirect, in connection with the making of a recommendation or a dealing by a client in these securities, and which may reasonably be expected to be capable of having an influence in the making of any recommendation, and that some or all of our Representatives may be remunerated wholly or partly by commission.
General Disclosure and Disclaimer
This research has been prepared by Argonaut Securities Pty Limited (ABN 72 108 330 650) (“ASPL”) for the use of the clients of ASPL and its related bodies corporate (the “Argonaut Group”) and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient you must not use or disclose the information in this report in any way. ASPL is a holder of an Australian Financial Services Licence No. 274099 and is a Market Participant of the Australian Stock Exchange Limited.
Nothing in this report should be construed as personal financial product advice for the purposes of Section 766B of the Corporations Act. This report does not consider any of your objectives, financial situation or needs. The report may contain general financial product advice and you should therefore consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision.
This research is based on information obtained from sources believed to be reliable and ASPL has made every effort to ensure the information in this report is accurate, but we do not make any representation or warranty that it is accurate, reliable, complete or up to date. The Argonaut Group accepts no obligation to correct or update the information or the opinions in it. Opinions expressed are subject to change without notice and accurately reflect the analyst(s)’ personal views at the time of writing. No member of the Argonaut Group or its respective employees, agents or consultants accepts any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research.
Nothing in this research shall be construed as a solicitation to buy or sell any financial product, or to engage in or refrain from engaging in any transaction. The Argonaut Group and/or its associates, including ASPL, officers or employees may have interests in the financial products or a relationship with the issuer of the financial products referred to in this report by acting in various roles including as investment banker, underwriter or dealer, holder of principal positions, broker, director or adviser. Further, they may buy or sell those securities as principal or agent, and as such may effect transactions which are not consistent with the recommendations (if any) in this research. The Argonaut Group and/or its associates, including ASPL, may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case.
There are risks involved in securities trading. The price of securities can and does fluctuate, and an individual security may even become valueless. International investors are reminded of the additional risks inherent in international investments, such as currency fluctuations and international stock market or economic conditions, which may adversely affect the value of the investment.
The analyst(s) principally responsible for the preparation of this research may receive compensation based on ASPL’s overall revenues.
© 2011. All rights reserved. No part of this document may be reproduced or distributed in any manner without the written permission of Argonaut Securities Pty Limited. Argonaut Securities Pty Limited specifically prohibits the re-distribution of this document, via the internet or otherwise, and accepts no liability whatsoever for the actions of third parties in this respect.