Azimuth Resources (ASX:AZH) is a junior gold and uranium explorer, with projects based in Guyana and South America.

The group holds approximately 8000km² of gold tenements in Guyana, and its main asset is the West Omai gold project, which it is currently exploring.

AZH’s other interests are the East Omai gold project, the Amakura uranium project, and the Pandanus West uranium project in Australia.

The company is an exciting prospect that has produced encouraging drilling results at West Omai. There is growing hope that the group’s maiden resource discovery will be significant enough to help underpin the start of production.

Go Guyana

The West Omai project is AZH’s flagship project, and which may contain the discovery of significant gold resources.

West Omai is part of the same corridor that hosts the Omai gold mine, which is the biggest gold mine in South America, having so far produced 3.7 million ounces of gold.

Azimuth Resources is expected to release a maiden resource estimate from the project sometime this quarter.

Given West Omai’s proximity to the Omai gold mine and the encouraging drilling results thus far, a significant resource discovery could be on the cards.

Gold shoots higher

Being an explorer, AZH is tightly leveraged to gold prices.

Although gold was sold-off heavily in September, the precious metal has bounced back strongly in recent weeks amid global economic uncertainty.

The spot price of gold is back above US$1750 an ounce after crashing to just above US$1500 in late September.

Europe’s debt crisis and the potential for another round of bond purchases by the Fed is likely to lure more nervous investors back into gold, which is likely to support prices further.

Such an outcome would be very beneficial for AZH.

Balanced out

AZH completed a $19.4 million capital raising on 31 October, giving it the balance sheet strength to pursue its Guyana exploration program well into 2012.

The raising has come at an ideal time for AZH, which has smartly taken advantage of its strong share price to shore up its finances.

The group also announced plans in April 2011 to list on the Toronto Stock Exchange.

The listing is expected to boost AZH’s global profile, which will come in handy when the group looks at future capital raisings.

Outlook

AZH an exciting prospect that has produced encouraging drilling results at its West Omai project.

The group is expected to release a maiden resource estimate from the project sometime this quarter, and there is hope the estimate will be significant enough to help underpin the start of production.

AZH’s fortunes are closely linked to the price of gold, and with the precious metal on track for continued gains, we believe this will translate into continued strength for AZH’s share price.

This is one of the hot stocks of the year, rising from 25 cent in June to currently be trading beyond 50 cents.

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Computershare (ASX: CPU) provides technology systems and services for the international securities industry. Its core services comprise the provision of shareholder registry services, employee share plans and associated services such as printing and share registry analytical services.

Computershare’s US$550 million takeover of Bank of New York Mellon Corp’s investor service business has been approved by U.S regulators.

This deal expected to be completed around the 1^st of January and will make CPU the largest provider of share-registry services in the world.

Computershare is one of the hot stocks of the day up around 15%.

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Mineral Deposits (ASX:MDL) is an exploration and development company, focussing primarily on the Grande Cote Minerals Sands Project in Senegal.

Grande Cote is a world class ore body that extends more than 100 kilometres and boasts high quality zircon and ilmenite.

Growing demand for mineral sands means production from Grande Cote is likely to occur in a period of rising prices, boding well for future profitability.

The market has acknowledged this, and as a result MDL has been one of the hot stocks in recent times.

Although capex costs at the project are expected to be significant, MDL’s cash balance and JV with Eramet puts it in a good position to meet funding requirements.

Magnificent Mineral Sands

The mineral sands industry is expected to boom in coming years due to a widening supply deficit.

Global zircon supply is forecast to shrink over the next decade, which will coincide with soaring demand from high growth countries such as China.

Zircon demand is driven predominantly by its use in ceramics. With China modernising its economy, the demand for ceramics, such as tiles, is expected to surge.

This is likely to drive significant zircon price growth, which will benefit MDL as it begins production in 2013.

The supply deficit will take time to narrow given the more than seven years required to bring projects from exploration to commissioning.

Titanium is anticipated to follow a similar path to zircon, in that demand is likely to be fuelled from its use in paint, plastics and paper – key ingredients for China’s growing economy.

Tizir is born

On 28 July the group formed a 50/50 JV with French-based miner, Eramet, known as Tizir Limited.

Under the JV, Mineral Deposits will contribute its 90% interest in Grande Cote (Senegal’s government owns the other 10%), with Eramet contributing its Tyssedal titanium and iron plant in Norway, along with $30 million in cash.

The JV was crucial for MDL as it secures off-take for the majority of Grande Cote’s ilmenite. The ilmenite will be used in the production of titanium feedstock at the Tyssedal plant.

The agreement also secures additional titanium supply for Tyssedal, giving it the capacity to meet growing demand from pigment producers.

Therefore it appears the JV is a win/win for both companies.

Grande Cote is grand

The Grande Cote project is strategically placed in Senegal, located not too far from the Dakar coast. This reduces the time it will take to transport the minerals from the mine separation plant to the port for shipment.

The lack of significant vegetation and overburden also allows for an efficient processing of the mined ore.

Thus when production begins MDL will be operating towards the lower end of its cost curve, giving it a significant competitive advantage.

Grande Cote has the potential to be a Tier 1 asset, with an operating mine life of 25+ years, and expected annual production of 85,000 tonnes of zircon and 575,000 tonnes of ilmenite.

These output estimates will amount to approximately 7% of global supply, putting MDL on track to become one of the world’s bigger producers.

Cash is king

MDL is in sound financial shape, having secured US$136.2 million in a capital raising in June. The raising brought the group’s cash balance at the end of June to US$173.3 million.

Moreover, the company has no external borrowings.

Although Grande Cote requires approximately US$516 million in capex requirements, Mineral Deposits’ array of financing options, including the contribution from Eramet, will help ensure sufficient funding for the project.

Outlook

Mineral sands producers stand to reap significant benefits from China’s voracious demand for resources.

The supply deficit is expected to linger for a while yet, putting MDL in line to achieve major price increases at the same time it begins production.

Grande Cote appears to be a long-life, low-cost asset for MDL, thus giving it a competitive advantage in the mineral sands industry.

Importantly, the company is in sound shape with cash in the bank, no external debt, and a JV with Eramet that has secured off-take for its ilmenite.

Therefore the future appears bright for MDL, and it will be one of the stocks to watch in coming months.

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Sigma Pharmaceuticals (ASX:SIP) is a manufacturer and marketer of prescription, over-the-counter, and generic pharmaceutical products. It is also the owner of a leading full-line wholesale and distribution business to pharmacies.

Today SIP reported a 1H12 net profit of $26.7 million, which compares to a net loss of $9.2 million a year earlier.

SIP’s strong cash flow generation put a major dent in net interest expense, which was a key driver of the profit result.

EBIT jumped 55% on-year, helped by a 9% lift in underlying revenue.  The healthy sales result reflected market share gains.

An interim dividend of 1.5 cents was declared.  SIP said more would be done in the coming year to keep it ahead of industry changes.

SIP has been one of today’s best performers in the Australian share market.  It has also been one of the top stocks in recent months, having more than doubled in price since March.

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QR National (ASX:QRN) is Australia’s largest rail freight operator and the world’s largest rail transporter of coal from mine to port for export markets.

The group generated significant interest when it floated in November 2010, and it has since been one of the top stocks, having surged almost 30% to date.

Today, QRN announced that it signed a $900 million agreement to construct a rail link to the Wiggins Island coal export terminal.

The project would support an initial 27 million tonnes of coal per annum to the Wiggins Island terminal.

Construction is due to begin early next year, with expected completion by March 2015.

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Perseus Mining (ASX:PRU) is a gold explorer, focused on under-explored gold belts in West Africa.

The group’s Central Ashanti Gold Project has reserves of 3.3 million ounces (Moz) of gold, plus 1.5 Moz Measured and Indicated gold resources and 1.9 Moz Inferred gold resources.

A further 570,000 ounces of indicated gold resources and 1.21 Moz inferred gold resources are held on PRU’s West African projects, Grumesa and Tengrela.

The two projects (Central Ashanti Gold and Tengrela) aim to put out 670,000 oz per year once at full production, which would make PRU Australia’s second-largest listed miner by production after Newcrest Mining.

Further mineral resource and reserves upgrades are planned for later this year.

The miner recently completed its first gold pour during commissioning at the Central Ashanti Gold Project.

Though PRU is currently an explorer, the company is on track to become a producer.

PRU’s aim is to become a 400,000 ounce per annum gold producer from 2013, and the company is on target to achieve this following its consistent over-delivery on targets.

PRU is looking promising owing to its exposure to the under-explored gold belts in West Africa and on strength in gold prices.

Operational update

Following a recent updated economic analysis incorporating a revised life of mine plan (LOMP), PRU has planned throughput optimisation upgrades over the next 18 months.

Under the upgrade, average process throughput will increase from 5.5 Mtpa to 7.9 Mtpa.

Average annual gold production is set to increase by 38% to approximately 265,000oz.

Cash costs will drop to US$551/oz with a base case gold price of US$1,150/oz.

As a result, PRU’s EBITDA over the life of the project has increased by 127% to $1.56 billion.

The early start up of the Central Ashanti Gold Project could push the gold miner’s EBITDA up to US$300 million a year in 2013 and 2014.

Of course, the company will continue to lose money until it starts producing, although it has ample funding facilities to pursue its exploration activities and mine development plans.

Looking ahead

Perseus Mining is turning market heads over its consistent over-delivery on targets. The group is also in good financial stead, with approximately US$100 million cash.

Though PRU’s recent financial results are nothing to write home about, this is typical of a company in its emerging stages.

PRU is looking promising owing to its exposure to the under-explored gold belts in West Africa and on strength in gold prices.

The group will continue to expand its gold resources through rapid exploration of existing tenements and the acquisition of prospective new projects, while developing the Central Ashanti Gold Project.

Gold has gained significant ground this year, consistently reaching fresh record highs.

However, the precious metal saw a pullback late last week but is still in a good position to register further gains.

The metal printed highs of around US$1900 early last week and continues to hold its ground well above US$1800.

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AGL Energy (ASX:AGK) is Australia’s leading energy provider and the only energy producer with a full offering of renewable generation, providing natural gas and electricity to more than six million Australians.

AGK is Australia’s largest operator and developer of renewable energy generation, and is among the biggest companies (by market cap) in the stock market.

It has major investments in the supply of gas and electricity, as well as a substantial base of customers across Australia.

In line with one of the world’s hot topics, AGK is committed to leading Australia in minimising the effects of climate change by investing in sustainable energy businesses such as wind farms and environmentally friendly projects, including the underground Bogong hydroelectric power station in Victoria.

AGK’s organic growth strategy continues to deliver success with 95,959 new NSW electricity customers contracted in the second half of FY11.

Changing environment

The company has been busy since swapping assets with Alinta in 2006, a move that saw it acquire the retail business of both companies.

AGK now has a diverse power generation portfolio including base, peaking and intermediate generation plants, spread across traditional thermal generation (coal and gas) as well as renewable sources, including hydro, wind, landfill gas and biogas.

AGK’s power generation assets are predominantly located within the regions where its retail customers are generally located, and their renewable energy generation assets comprise around 40% of their portfolio.

AGK is well positioned for a low carbon environment with a pipeline of low-emission gas and renewable power development projects.

The company has grown from strength to strength with some key acquisitions made along the way.

It completed the acquisition of Mosaic Oil NL in October 2010 after Mosaic urged its shareholders to accept AGK’s $123 million bid.

The move has helped AGK gain access to MOS’ gas storage facilities in Queensland.

Earnings full of energy

AGK this week reported a 57% rise in annual net profit to $558.7 million boosted by a gain in the value of derivatives.

Underlying earnings for the period edged 0.5% higher to $431.1 million (from $428.9 million).

The marginal improvement was due to severe weather events and a much lower contribution from Loy Yang A (LYA).

The results were in line with AGK’s guidance provided in February. AGK had warned that expected earnings would be around $30 million to $35 million lower than initially thought.

AGK declared a final fully franked dividend of 31 cents bringing the full year dividend to 60 cents.

It has also been one of the hot stocks in recent weeks, having surged more than 20% from this month’s low of $12.50.

Looking ahead

Its core business remains strong with a solid FY operational cashflow. For the year, operating cashflow before tax rose more than 7% to $676 million.

Its retail energy division continues to grow with earnings rising 17% to $373 million on year.

AGK expects strong growth from its merchant energy business on the assumption that there will not be a recurrence of the cost incurred in connection with the severe weather events from earlier this year.

The company is looking to further expand its position by exploring a suite of low emission and renewable energy generation development opportunities.

AGK has long been focused on reaching the government’s 2020 renewable energy goal.

We find the company’s defensive qualities particularly attractive in the current economic climate.

It is likely to make some bolt on acquisitions locally to boost its strong hold on the Australian market.

With a strong balance sheet and defensive earnings, AGK is well equipped to weather current volatile times.

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Carsales.com Limited (ASX:CRZ) is an Australian business offering online access to automotive classifieds.

The company listed on the ASX at $3.92 in September 2009, up 12% from the $3.50 price at which the shares were issued.

Shortly after listing, CRZ was added to the S&P/ASX 200.

It is the largest consumer website in the country which covers automotive, plant machinery, motorcycle, caravan, marine and display advertising.

CRZ operates 23 individual websites which are all specifically focused on different products.

The company has been a fantastic growth story, benefitting from a migration to online advertising.

It has been one of the hot stocks since bottoming out at $3.79 earlier this month, having surged around 30% in the past few weeks.

Tough conditions, not for Carsales

Whilst most consumer sectors struggle in the face of tough economic conditions, CRZ has continued to prosper.

This is mainly because CRZ has been at the forefront of the continuing migration of advertisers from print to online.

Being proactive in identifying market trends has helped CRZ continue to be a clear leader in market share.

Surprisingly, there has been robust growth in new vehicle enquiry volumes despite decreased new vehicle stock availability.

CRZ recently acquired Jumbuck Entertainment’s OZtion assets which is one of the world’s leading developers of mobile phone applications.

FY earnings

CRZ reported a 30% jump in FY underlying earnings to $83.8 million with EBITDA margins at 55%.

Operating cashflow for the period climbed 19% to $60.1 million with operating revenue rising 26% to $152.5 million.

Earnings per share (EPS) increased by 34% to 25 cps while a final FY11 dividend of 10.5 cents per share was declared.

The majority of its revenue (47%) comes from the Dealer division and the Private division which accounts for approximately 20% of revenue.

The period saw continued strong growth in automotive enquiry volumes, up 15% on year.

Looking ahead

CRZ’s FY earnings were highly impressive, convincingly beating guidance. The company is looking to stay ahead of its competitors through the use of mobile devices.

Mobile now accounts for 13% of CRZ’s automotive traffic.

The acquisition of OZtion delivers CRZ a robust and proven e-commerce platform that will complement its growing general classifieds business.

CRZ has introduced significant new product releases with many planned for the coming months.

Its mobile application is expected to continue growing at a strong rate and will be a key area of ongoing focus.

Tough economic conditions remain a key challenge but we feel CRZ has enough upside potential to remain an outperformer, thus making it one of the stocks to watch.

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WorleyParsons (ASX:WOR) provides professional engineering and management services to the energy, resource and complex process industries.

It offers a broad scope of services, from feasibility studies to design and project services, and is exposed to a number of sectors.

Today, WOR reported a 25% lift in FY11 net profit to $364.2 million, although its underlying result of $298.5 million missed analyst estimates.

WOR was able to grow its earnings despite the impact of the soaring AUD and turmoil in the Middle East.

The group was forecasting good underlying profit growth in FY12, continuing the momentum displayed in the 2H11.

A final dividend of 50 cents was declared.

WOR has been one of the hot stocks in today’s trade, with its almost 10% gain far outpacing the Australian share market.

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Kathmandu (ASX:KMD) is a clothing and equipment provider for the travel and adventure market.

Today, KMD reported a 24.5% increase in sales for the FY11, defying what has generally been a gloomy year for retailers.

Kathmandu faced tough trading conditions, but was able to grow sales due to better inventory management, favourable weather patterns and healthy results from its new stores.

KMD has been one of the hot stocks in what has otherwise been a bearish day for the Australian share market.

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