OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Citi rates BOE as Downgrade to Neutral from Buy

Boss Energy has retracted its 2021 Enhanced Feasibility Study (EFS) for the Honeymoon project after finding major issues with resource continuity, leachability and overlap of mineralisation, Citi notes.

It is now redesigning the wellfield with wider 75-100m spacing vs 40m originally, though management couldn’t cite clear operating precedents for such wide spacing.

The broker reckons this leaves permeability and lateral connectivity of the aquifer as the key risk to be tested in an updated EFS due 3Q2026.

No change to FY26 guidance, but the broker trimmed FY27 output assumptions. Target drops to $1.25 from $2.20, and the rating is downgraded to Neutral from Buy.

Macquarie rates NST as Outperform

Ahead of Northern Star Resources' 2Q26 report on 22 January 2026, Macquarie expects gold production of 387.5koz, -7% below the consensus. Cost (AISC) is expected at $2,783/oz, 6% above the consensus.

A more cautious outlook, mainly lower assumed Kalgoorlie (KCGM) grades has resulted in the broker lowering FY26 EPS forecast by -5%.

FY26 production estimate is trimmed to 1,701koz, the bottom end of the 1,700-1,850koz range.

Outperform. Target cut to $32 from $34.

UBS rates RIO as Neutral

Rio Tinto's Rhodes Ridge JV has approved a US$191m feasibility study for Stage 1, targeting around 50Mtpa by 2030, with a further 50Mtpa Stage 2 likely. This will make it a key replacement project for Pilbara capacity, UBS highlights.

The high-grade project is expected to be highly value accretive, delivering an IRR (internal rate of return) of around 25-30% and improving Pilbara grade to 61%. Unit cost is seen lower by up to -US$2/t, and margins higher by over US$3.5/t.

Feasibility completion is expected by 2029. Despite strong economics, the focus on replacement rather than growth supports a Neutral rating.

Separately, the broker returned from Rio's Argentina lithium deep dive with increased confidence in portfolio optionality, execution, asset quality and country outlook. The broker noted a pathway to 10-12% global market share by 2035 at low US$6/kg C1 costs and over 50% EBITDA margins by 2030.

Minor revisions to forecasts. Target price $140. 

The report was published yesterday.