AQUILA RESOURCES LIMITED (AQA)



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General Information
Company Name: Aquila Resources Limited
Stock Code: AQA
Website: www.aquilaresources.com.au
GICS Sub-Industry: Diversified Metals & Mining
Market Cap ($M): 1,083
Equiv. Shares (M): 412

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 2.630 $ 2.710 $ 2.740 $ 2.580 $ 2.630 231,450 0%

Current Broker Consensus Recommendation more
Recommendation: Sell
Recommendation Date: 1st Apr 2014
12 Month Target Price (average): $2.375
Brokers Surveyed: 2

Company Overview

Business Description:
Aquila Resources Limited (AQA) is an exploration and development company with project interests in iron ore, coal and manganese in Australia and South Africa. The Company's primary focus is the development of the West Pilbara Iron Ore Project and Eagle Downs Hard Coking Coal Project.

Strategy Analysis:
Aquila has a strong pipeline of projects at various stages of development. Advanced projects include the Eagle Downs coal project and the West Pilbara Iron Ore project. Aquila¬īs Iron ore projects are progressing with the establishment of the Australian Premium Iron Ore Joint Venture (API), with Vale (sold by AMCI to Vale). Vale will sole fund the first AUD 10 million of exploration expenditure, which will focus on the west Pilbara region in Western Australia. Aquila also has a number of other iron ore and coal joint ventures which it is earning interests in through exploration. These projects are spread across Botswana and Australia. Aquila Resources reported negative cash flow of $20.53m for the quarter ended 31 December 2012. Operating cash flow for the period was $(20.05m). Payments for exploration and evaluation were $(19.44m). Investing cash flow was $(477,000). Financing cash flow was nil. Cash in hand at the end of the quarter was $440.89m. CSIRO compact sinter testing results were received during the quarter confirming that West Pilbara Fines is a product that is very compatible with certain sinter feeds. In addition, work continued on completing the requirements for the environmental approval for the Washpool Hard Coking Coal Project with discussions focussing on a groundwater monitoring program and biodiversity offsets which are expected to be undertaken over the next six months.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2015  F -20.7 -5.0 76.9 -52.3 0.0 0.0 0.0
2014  F -11.7 -2.8 -53.2 -92.6 0.0 0.0 0.0
2013  A -25.0 -6.1 NaN -39.5 0.0 0.0 0.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F 2013 A 2014 F 2015 F
Aquila Resources (AQA) $1,087 M -- -- -- -- -- -- 0.0000 0.0000 0.0000
BHP Billiton (BHP) $122,687 M -0.2435 0.1192 -0.0380 16.0343 14.3259 14.8916 0.0327 0.0295 0.0308
Iluka Resources (ILU) $3,731 M -0.6600 0.1402 1.3134 29.0512 25.4790 11.0136 0.0101 0.0215 0.0428
Rio Tinto (RIO) $27,361 M 0.5848 -0.2605 0.0320 8.1773 11.0585 10.7159 0.0342 0.0311 0.0340
Sims Metal Management (SGM) $2,020 M -0.7514 4.5651 0.6385 118.0406 21.2108 12.9455 0.0000 0.0108 0.0303

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth P/S Ratio
AQA 3.00 -- 1.31 -- 6,575
Market 1.07 15.9 1.27 2.05 1.71
Sector 0.87 12.0 0.68 0.73 4.83

Directors
Name Position Start Date
Mr Anthony Poli Chief Executive Officer,Executive Chairman 14 March 2000
Mr Gordon Thomas Galt Non-Executive Director 22 August 2007
Mr Timothy Carl Netscher Non-Executive Director 08 November 2013
Mr Stephen John Scudamore Non-Executive Director 10 December 2012
Mr Zhaoming Lu Non-Executive Director 23 October 2013
Ms Denise Goldsworthy Non-Executive Director 07 February 2014

Management
Name Position
May Chan Company Secretary
S J Pilcher General Manager - Coal
M N Alciaturi General Manager - Finance and Corporate

Substantial Shareholders
Holding Name
108,276,852 (28.93%) Poli, Anthony
44,015,447 (10.70%) Bass, Charles B
70,172,666 (17.04%) M&G Investment Management Limited
22,721,172 (7.04%) Vanguard Precious Metals and Mining Fund
43,946,413 (15.00%) Baosteel Group

Calendar of Events
Date Event
11 February 2015 Report (Quarterly)
23 January 2015 Report (Quarterly)
27 October 2014 Report (Annual)
21 October 2014 Report (Quarterly)
21 July 2014 Report (Quarterly)
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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