Fundamental Analysis Report Of Azure Minerals And Oz Minerals

Running head: PRINCIPLES OF FINANCIAL MARKETS
Principles of Financial Markets
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1PRINCIPLES OF FINANCIAL MARKETS
Executive Summary
This paper has been established in order to disclose the top up and the bottom down
evaluation of the mineral industry in Australia that has led to fundamental analysis. The
companies that have been chosen for the completion of the paper with the help of
fundamental analysis is Azure Minerals and Oz Minerals that are renowned manufacturers of
mineral in the mineral sector of Australia. The fundamental analysis is assessed by
undertaking the bottom up and the top down analysis of the Australian mineral industry. The
history and the backdrop of the mineral sector of Australia has even been explained the
construction of the top down analysis is completed by considering the numerous macro-
economic factors that are inclusive of the rate of unemployment, rate of GDP, inflation rate
and the rate of exchange of the economy of Australia. The paper has even disclosed
numerous graphs and figures that explain the representation of performance of the Australian
economy statistically. The bottom up assessment of the companies has been undertaken with
the help of ratio analytical tools by the researcher. The analysis of the ratio is regarded as one
of the significant mechanism for the investors for undertaking decisions with respect to
investment. Additionally, it even assists in undertaking the performance comparison of the
chosen companies of the mineral sector. The last part of the paper explains in a detailed
manner the synopsis of the paper and gives out suggestions and advices for the investors so
that it would enable them to undertake effective investment decisions.

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Table of Contents
Introduction................................................................................................................................3
Background of the Mineral Industry of Australia......................................................................3
Mission statement and Overview of the companies...................................................................4
Top Down analysis.....................................................................................................................6
Bottom up Analysis..................................................................................................................10
Recommendations and Summary.............................................................................................19
Reference List..........................................................................................................................20

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Introduction
It is significant for the shareholders and the investors to undertake effective evaluation
of the companies within which they are looking for undertaking investments. These sorts of
assessments are undertaken with the assistance of bottom up and top down analysis of the
industry of the company where investments would be undertaken. The investor receives a
disclosure about the macro-economic atmosphere of the business sector with the assistance of
the top down analysis (Sarsby et al. 2014). However, bottom up assessment explains the
micro-economic image of any specific company on which the investor wants to take an
analysis on. In the present paper, the fundamental evaluation of the two organizations that are
listed in ASX and are functioning in the mineral industry has been taken into consideration.
The two companies are inclusive of the Azure Mineral Limited and Oz Minerals Limited.
Background of the Mineral Industry of Australia
The mineral sector of Australia has been a strong and a comprehensive one in spite of
various stumbles like the reduction in the price and it has been observed that the industry is
the biggest contributor towards the trade associated with export of Australia. Australia has
been one of the leading and developing manufacturer and exporter of mineral resources. The
country is the largest manufacturer of initial aluminium and the largest bauxite refiner. The
country has been going through a firm and strong economy that has been primarily due to
reduction in the rate of unemployment and growth rate of the economy of the country that has
been sustainable in nature (Liu et al. 2017). It has been viewed that as the commodity prices
fall, the mineral industry is shifting itself from making investments in the manufacturing
phase along with sustainable growth in the volume of export. Furthermore, the mineral
industry has been observed and assessed by the investors as the industry is inclusive of a high
degree of risk and small mining companies are affected adversely by the scarcity of the

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resources and the capital required for a venture. According to Mineral Council of Australia
and the Centre for International economics, around 60-70% of the mining minerals are
exported globally. A greater degree of interest is generated in the mining boundaries due to
the development of new and improved technologies and swift rise in the extraction of
petroleum. This has increased the drilling of the wells, discovering the data required for
petroleum extraction and the options of enhancement of diversified petroleum production that
are of a variety of range (Linkov et al. 2014). It has been observed that 50% of the demands
of Australia is given by the mineral sector and they are regarded as significant for the
economic development of the country.
Mission statement and Overview of the companies
Oz Minerals is one of the leading mineral explorers in Australia with their focus
primarily on copper. The organization has sufficient amount of capital and financial strength
and has been one of the renowned ASX listed companies. The aim of the organization has
been to make sure that effective utilisation of the capital and establishing firm financial
condition for raising the earnings for the shareholders. Oz Minerals has committed to
function sustainably. It has been an intrinsic part of their strategy and has been the essential
factor for the development and success. The company has concentrated on the creation of
value for their stakeholders that this has laid the establishment of the process towards health,
safety, environment, social performance and well being (Ozminerals.com. 2017). The
company has been presently exploring in Carapateena and Prominent Hills and they are
remaining to emerge as manufacturers. Azure Minerals is an Australian company who are
engaged in the discovery and the extraction of the minerals. The main operations of the
company have been to extract gold, copper, zinc and silver from the mining belts of the
country (Azureminerals.com.au. 2017). The organization has established in the year 2003 and

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has been headquartered in West Perth Australia. The venture reliable operations of the
company have evolved with the partnership with two key mining industries that is inclusive
of the Promontorio and Alacrnran project. They have the intention of undertaking certain
other developmental ventures that are inclusive of environmental, mining, hydrological, and
infrastructural along with the environmental and social components.
Australia has sufficient and diverse mineral and energy resources and the essential
factor to the economic development (Nicholls et al. 2015). Performance and success is the
enhancement of the mineral resource sector and they are a key contributor to the earnings
gained from the exports. The mineral industry is the foundation stone of the Australian
economy with the export value being accounted for $157 million that forms 51% of the
export of goods and services. The mining industry has influenced an overall investment of
$76 billion during the accounting year 2015-16. The overall of $26 billion has been paid as
salaries and wages to the employees and the labours of this sector in the accounting year
2015-16. There are around 2280000 individuals who are employed directly in the mineral
sector and ever since the year 2000, the rate of employment has been increased by double.
The export market of resources and energy of Australia consists of China, Japan, South
Korea, India, EU 28 and other nations of Asia. The nation has more than 260 mineral
manufacturing and gas operational factories.
One of the greatest industrial contributors towards the growth of the economy of the
nation is the mineral industry and strength and relentlessness of the mineral sector was
highlighted in the year 2016. Conversely, regardless of the lower cost or decreasing costs of
the items, a recorded development in resource export was conveyed by the Australian mineral
sector (Zhang et al. 2014). Over the current year, there was a blend of persevering quest for
gains in the productivity and the idea for long term investment. Such changes have been an
evidence of the matter that extended mineral sector is proceeding to have an immense effect