Research notes

Strong 1Q26 result with production, costs and revenue ahead of expectations. PLS continues to engage with the government following the Australia-US critical minerals framework. Management stipulated its preference for shared infrastructure initiatives over potential price floors. Following recent share price strength we believe PLS is now trading well ahead of fundamentals and we therefore move to a SELL rating (previously HOLD) with a A$2.80ps target price (previously A$2.30ps).

MEK reported its first ever quarter of production since commissioning the Murchison Gold Project – expectations were beaten. Despite ramp up, MEK delivered a strong first quarter with positive cashflow, a 38% grade reconciliation beat versus the Feasibility Study (FS), 29% lower processing costs, and overall AISC outperformance against MorgansF. We see upside to the FY26 production profile, supported by: (1) open pit head grades materially outperforming expectations; (2) higher-grade underground ore scheduled for processing this quarter; and (3) increased mill throughput as underground feed is introduced. Collectively, these factors point to higher gold output and lower unit costs. We upgrade MEK to a BUY rating (previously SPECULATIVE BUY) and lift our price target to A$0.33ps (previously A$0.31ps).

WHC continues to generate positive EBITDA margins despite the current weakness in coal prices. 1Q production was modest, as expected. Production output is weighted to 2H. Following recent share price strength and updates to our model, we rate WHC an ACCUMULATE with a target of A$7.95ps.

Resource Capital Fund with US$2.2 Billion in assets has an 8.3% equity interest in KGL, with the Indonesian conglomerate the Salim Group holding 37%. In June 2024 the Salim Group acquired the Hillside copper-gold project, SA, for A$397M. KGL completed a feasibility study (FS) into the A$362M development of the Jervois copper-gold project, NT, to produce 30,000tpy of copper in concentrate, and potentially provide satellite feed to Glencore’s Mount Isa copper smelter. Copper demand is anticipated to increase with electrification, and supply constraints are expected to support a strong copper price. The current ~US$5.00/lb price is off recent highs above US$5.80/lb.

NEM delivered a solid 3Q25 result across all metrics underpinned by the strong gold price. Production was in line with expectations but costs, adjusted EBITDA and adjusted net income was a beat to consensus expectations. Net debt reduced to US$12m (from US$1,422m in the previous quarter). CY26 indicative guidance was slightly softer than expected due to mine sequencing, but this positions NEM for strong production and lower costs in subsequent years. Maintain ACCUMULATE with a A$148ps target price (previously A$146ps).

Following implementation of the scheme of arrangement between JLG and its shareholders in connection with the acquisition of all the issued shares in JLG by Sherwood BidCo Pty Ltd, we discontinue coverage of Johns Lyng Group (JLG AU). Our forecasts, target price and recommendation should no longer be relied upon for investment decisions.

On the heels of a strong 3Q25 operational and sales result, Woodside has announced the entry of US midstream player Williams into the Louisiana JV. Given the magnitude of execution risk Woodside faces at Louisiana, we appreciate the strategy to de-risk infrastructure and feedgas delivery. To form a view on the value of the Williams deal we need to gain a better grasp of the pipeline agreement, with the two deals obviously indirectly linked. Doing good things, and apparently a good week to have good news macro wise, it is little surprise Woodside shares are gaining support. We upgrade our rating to BUY (from ACCUMULATE) post the recent selloff with a A$30.50 target price.

Temporary Bauna outages weigh on 3Q volumes, but pricing and cashflow hold firm. FY25 guidance narrowed and capex trimmed, signalling tighter operational/capital discipline. Management has done a good job operating Bauna, but some risks cannot be mitigated in an ageing field. Balance sheet strength improving fast with net debt down US$89m QoQ. Medium-term focus shifting to Bauna well recovery and Who Dat East FID. Fundamental positives and share price skew positively, upgrade to BUY (from HOLD) with an A$1.80 target price (was A$1.90).

NST delivered a softer (but well flagged) quarterly result with unit costs surprising to the upside despite lower than forecast ounce production. KCGM is beginning to show promise, with open pit mining at the high-grade Golden Pike set to return to one mining level, boosting productivity and production outlook. Importantly, KCGM underground mining areas achieved an annualised run rate of 2.9mtpa. FY26 guidance was reiterated, we expect production rates to continue to lift quarter on quarter. We have an ACCUMULATE rating with a A$27.41ps (previously A$27.44ps)

RRL delivered another solid quarter of cash generation, aided by record gold prices (+A$158m) cash balance now sits at A$675m. At Duketon the first underground production ore was mined at Garden Well Main and Rosemont Stage 3 supporting operational longevity. FY26 guidance re-iterated, we are confident on delivery. We maintain our HOLD rating with a price target of A$6.17ps (previously A$6.00ps).