Archive: Turnarounds
Background
Four potential turnaround plays were highlighted at the bottom of this note - Aurelia Metals, Metro Mining, Cooper Energy and Bowen Coking Coal. The first three have performed well and appear to be on the path the turning operations around, Bowen Coking Coal still appears to be struggling. You need a lot to go right for a successful turnaround story and there are no prizes for being early.
Prelude - Metro Mining & Aurelia Metals
Deep dive - Metro Mining
Since writing Metro has commenced 2024 operations and recapitalized its balance sheet (once again). It’s been a very slow start to the season with commissioning/teething issues with the new wobbler screen and new transshipping vessel (Ikamba) plus probable issues with the now bottleneck (the barge loader). This was always a risk. They appear to be overcoming these issues and the outlook for bauxite looks very promising… so long as operations stabilize, I think the turnaround is in the early stages.
Deep dive - Aurelia Metals
Aurelia announced promising drill intersections below the main trust of its Federation deposit which I highlighted as a high probability in this note. They’ve also discovered an offset zone to the West - so mine life extensions highly likely. The company had a soft March quarter with heavy rains impacting Federation development and plant and shaft defects impacting production at its Peak mine. The June quarter is expected to be much stronger, and Federation is still on track for first stope ore in the September quarter (though I wouldn’t be surprised if this is early Dec quarter).