Stanmore Resources: Clear growth mandate and capability

About the author:

Author name:

By Tom Sartor

Job title:

Senior Analyst

Date posted:

15 May 2023, 8:00 AM

Sectors Covered:

Junior (Emerging) Resources, Bulk Materials

• Stanmore Resources (ASX:SMR) has grown into Australia’s fourth largest Australian met coal producer, and the seventh largest globally, transforming its significance to investors.
• We trim our production/ sales assumptions and adjust our HCC price forecasts following recent events/ moves.
• We think SMR’s equity is being discounted for both acquisition risk (Daunia) and macro risks affecting steel/HCC market sentiment.
• However, a P/NPV multiple of only 0.63x suggests to us that this discounting is excessive, meaning SMR is far too cheap, offering an opportunity here. Add.

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