Research from Atrium Research, Atrium Research Corporation

Atrium Research

Research from Atrium Research

Atrium Research Corporation

Atrium Research provides institutional quality issuer paid research on public equities in North America. Our investment philosophy takes a 3-5 year view on equities currently being overlooked by the market. Our research process emphasizes understanding the key performance metrics for each specific company, trustworthy management teams, unit economics, and an in-depth valuation analysis. 

Our research product includes in-depth initiation reports, research notes, thematic research pieces, and company fact sheets.

Thematic (Sector/Industry)

<ul><li>Gold and precious metals held their ground through December despite continued quantitative tightening headwinds</li><li>We anticipate 2023 to be a standout year for both precious metals and base metals and encourage investors to position themselves accordingly</li><li>Investors should tread carefully when buying small-cap stocks as the limited access to capital in 2022 may result in bankruptcies in 2023</li></ul>

Gold and precious metals held their ground through December despite continued quantitative tightening headwindsWe anticipate 2023 to be a standout year for both precious metals and base metals and encourage investors to position themselves accordinglyInvestors should tread carefully when buying small-cap stocks as the limited access to capital in 2022 may result in bankruptcies in 2023

IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals Ltd (OZL AU)</a> has entered into a SID with <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group Ltd (BHP AU)</a> at A$28.25 per share, a 49.3% premium to the undisturbed price (5 August).</li>
<li>The offer price is attractive. The key conditions are shareholder and regulatory (Brazil and Vietnam) approvals. The scheme meeting is in late March/early April 2023. </li>
<li>The key risk is the rise in copper prices. At last close and for the end-April payment, the gross and annualised spread to the offer is 1.6% and 4.8%, respectively.</li>
</ul>



OZ Minerals Ltd (OZL AU) has entered into a SID with BHP Group Ltd (BHP AU) at A$28.25 per share, a 49.3% premium to the undisturbed price (5 August).
The offer price is attractive. The key conditions are shareholder and regulatory (Brazil and Vietnam) approvals. The scheme meeting is in late March/early April 2023. 
The key risk is the rise in copper prices. At last close and for the end-April payment, the gross and annualised spread to the offer is 1.6% and 4.8%, respectively.


OZ Minerals (OZL AU)’s SID with BHP at A$28.25

<ul>
<li>
<a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals Ltd (OZL AU)</a> has received a revised non-binding indicative offer from <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group Ltd (BHP AU)</a> at A$28.25 per share, a 13.0% premium to the previously rejected offer.</li>
<li>The Board has granted four weeks of due diligence and intends to recommend a binding offer at A$28.25 per share, in the absence of a superior proposal.</li>
<li>While the offer is below the rumoured Board's target of a A$30 offer, it is still attractive. At the last close, the gross spread to the offer is 3.3%.</li>
</ul>



OZ Minerals Ltd (OZL AU) has received a revised non-binding indicative offer from BHP Group Ltd (BHP AU) at A$28.25 per share, a 13.0% premium to the previously rejected offer.
The Board has granted four weeks of due diligence and intends to recommend a binding offer at A$28.25 per share, in the absence of a superior proposal.
While the offer is below the rumoured Board's target of a A$30 offer, it is still attractive. At the last close, the gross spread to the offer is 3.3%.


OZ Minerals (OZL AU)’s A$28.25 Non-Binding Offer from BHP

<ul>
<li>
<a href="https://www.bloomberg.com/news/articles/2022-09-17/oz-minerals-said-to-hold-out-for-a-10-billion-in-potential-sale?leadSource=uverify%20wall" target="_blank" rel="noopener">Bloomberg reported</a> that <a href="https://www.smartkarma.com/entities/bhp-group-ltd" target="_blank" data-smartkarma-citation="entities:147:1" rel="noopener">BHP Group Ltd (BHP AU)</a> has been considering raising its bid for <a href="https://www.smartkarma.com/entities/oz-minerals-ltd" target="_blank" data-smartkarma-citation="entities:1138:1" rel="noopener">OZ Minerals Ltd (OZL AU)</a>. OZ is pushing BHP to increase its offer to A$30. </li>
<li>The OZ Board has a strong justification for a higher offer as BHP’s acquisition of OZ would tick the boxes of future-facing commodities and potential operational synergies.</li>
<li>
<a href="https://www.smartkarma.com/entities/rio-tinto-ltd" target="_blank" data-smartkarma-citation="entities:13:1" rel="noopener">Rio Tinto Ltd (RIO AU)</a> recently increased its bid to minority shareholders of <a href="https://www.smartkarma.com/entities/turquoise-hill-resources-ltd" target="_blank" data-smartkarma-citation="entities:25405:1" rel="noopener">Turquoise Hill Resources (TRQ CN)</a>. This increases the probability that BHP will return with a sweetened offer.</li>
</ul>



Bloomberg reported that BHP Group Ltd (BHP AU) has been considering raising its bid for OZ Minerals Ltd (OZL AU). OZ is pushing BHP to increase its offer to A$30. 
The OZ Board has a strong justification for a higher offer as BHP’s acquisition of OZ would tick the boxes of future-facing commodities and potential operational synergies.

Rio Tinto Ltd (RIO AU) recently increased its bid to minority shareholders of Turquoise Hill Resources (TRQ CN). This increases the probability that BHP will return with a sweetened offer.


OZ Minerals Could Get an Improved Offer from BHP

Technical Analyst, Vermilion Research

Joe Jasper

Technical Analyst

Technical and Quantitative Research

Vermilion Research

Vermilion’s objective is to deliver timely, actionable, and unique technical research to professional investors through the application of our various technical indicators.

Our research strategists seek to highlight securities which we believe are at major inflection points, based on our various technical and quantitative indicators, and offer asymmetric risk/return profiles. Our unique research methodology, centered on relative strength, enables our strategists to deliver superior investment recommendations.

Our process begins by organizing the universe of actively traded stocks into discrete sectors, then into industry groups. We then apply our technical and quantitative tools to identify developing price trends. Once attractive trends are identified within a selected sector or group, we screen for individual stocks which we believe offer the best risk/reward profile. We provide a historical perspective that often reveals, through our long-term charts, how price patterns often repeat themselves over time.

Technical Analysis

<ul>
<li>Broad global MSCI equity indexes (ACWI, ACWI ex-US, EAFE, and EM) remain bearish, as do indexes in Japan, Hong Kong, China, Europe, and Germany.</li>
<li>Until we see these indexes break above downtrends and key resistance levels, we cannot be bullish.</li>
<li>Remain overweight Energy and Materials with the secular commodity bull market intact. Defensive Sectors are also hitting 1-2-year RS highs; we recommend overweights to Health Care, Utilities, and Consumer Staples.</li>
</ul>


Broad global MSCI equity indexes (ACWI, ACWI ex-US, EAFE, and EM) remain bearish, as do indexes in Japan, Hong Kong, China, Europe, and Germany.
Until we see these indexes break above downtrends and key resistance levels, we cannot be bullish.
Remain overweight Energy and Materials with the secular commodity bull market intact. Defensive Sectors are also hitting 1-2-year RS highs; we recommend overweights to Health Care, Utilities, and Consumer Staples.


Opportunities Within Energy and Materials

Canada

Alamos Gold Inc. is an intermediate gold producer. The Company acquires, explores and produces gold from mines located in Canada, Mexico and the United States.

Pan American Silver Corporation is a primary silver producer.   The Company has seven operating mines in Mexico,  Peru, Argentina and Bolivia and several development projects in USA,  Mexico, Peru and Argentina.

Yamana Gold Inc. is an intermediate gold producer with production, development stage, and exploration properties throughout Brazil.  The Company also holds gold exploration properties in Argentina.

Hudbay Minerals Inc. operates as a mining company. The Company mines and produces zinc, copper, gold, and silver. Hudbay Minerals offers its services across the Americas .

B2Gold Corporation is a gold exploration and production company. The Company is a Vancouver based gold producer with mines in Nicaragua and a portfolio of development and exploration assets in Nicaragua, Colombia and Uruguay.

Osisko Gold Royalties Ltd operates as a precious metal royalty and stream company. The Company holds royalties and streams in base metals, gold, and silver mines. Osisko Gold Royalties serves customers in Canada.

Lundin Gold Inc. is a Canadian mining company. The Company owns and operates gold projects located in southeast Ecuador.

IAMGOLD Corporation is a mid-tier gold mining company. The Company is focused in West Africa, the Guiana Shield of South America and in Quebec where it has a pipeline of development and exploration projects.

First Majestic Silver Corp. is a silver producing mining company.  The Company's presently owns and operates producing silver mines in Mexico; the La Parrilla Silver Mine, the San Martin Silver Mine, the La Encantada Silver Mine, the La Guitarra Silver Mine, and Del Toro Silver Mine.

Sandstorm Gold Ltd. acquires gold purchase agreements with companies that have advanced stage development projects or operating mines.  The Company makes an upfront cash payment to its partners and receives the right to purchase a percentage of the gold produced, for the life of the mine, at a fixed price per ounce.

United States Steel Corporation operates as an integrated steel producer. The Company manufactures flat-rolled and tubular products with production operations in North America and Europe. United States Steel serves the automotive, appliance, container, industrial machinery, construction, and oil and gas industries.

BlueScope Steel Limited supplies steel products and solutions. The Company manufactures steel slabs, plates, hot and cold rolled coils, and coated and painted strip products for building and construction, automotive, whitegoods, and manufacturing applications. BlueScope Steel serves customers in Asia, Australia, New Zealand, and the United States.

Kobe Steel, Ltd. is a steelmaker, as well as a supplier of aluminum and copper products.  The products include steel plates and steel rods.  The Company also operates other businesses such as welding consumables, urban infrastructure, plant engineering, and industrial & construction machinery.  Kobe Steel has operating offices in the US, Europe, and Asia.

JFE Holdings, Inc. is a holding company which was established through the merger of NKK Corp and Kawasaki Steel Corp.  The Company manages and conducts its subsidiaries' business, which is steel production and integrated engineering services.

China Steel Corporation manufactures and markets a variety of steel products. The main products are hot rolled coils and sheets, cold rolled coils and sheets, wire rods, steel plates, and steel bars.

OZ Minerals Ltd. is an Australian based mining company with a focus on copper. The Company owns and operates the Prominent Hill copper-gold mine and the Carrapateena copper-gold project located in South Australia and has a number of equity interests in listed resource companies.

NMDC Limited explores for minerals. The Company is exploring for iron ore, copper, rock phosphate, lime stone, dolomite, gypsum, bentonite, magnesite, diamond, tin, tungsten, graphite, and beach sands.

Yunnan Aluminium Co., Ltd. primarily manufactures and markets aluminum products. The Company's products include aluminum ingots, aluminum rolls, and aluminum alloys.

Jinduicheng Molybdenum Co.,Ltd. is involved in molybdenum mining, dressing, smelting, processing, research and trade in Asia.

Jinduicheng Molybdenum Co, Ltd. (601958 CH)

Huaibei Mining Holdings Co.,Ltd. operates coal businesses. The Company mines, processes, and distributes coal, cokes, coal chemical products, and other products. Huaibei Mining Holdings also produces methanol, crude benzene, ammonium sulfate, and other products.

Lundin Mining Corporation is a diversified base metals mining company with operations in Chile, Portugal, Sweden, Spain and the United States, producing copper, zinc, lead and nickel. The Company holds interest in the Tenke Fungurume copper/cobalt mine in the Democratic Republic of Congo and a cobalt refinery located in Kokkola, Finland.

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Lundin Mining (LUN CN)

Mining Monthly: December Edition

Gold and precious metals held their ground through December despite continued quantitative tightening headwinds. We anticipate 2023 to be a...

Atrium Research

OZ Minerals (OZL AU)’s SID with BHP at A$28.25

This is a done deal barring a dramatic increase in copper prices. At the last close and for the end-April payment, the annualised spread is 4.8%.

Arun George

OZ Minerals (OZL AU)’s A$28.25 Non-Binding Offer from BHP

While the offer is below the rumoured Board's target of a A$30 offer, it is still attractive. At the last close, the gross spread to the offer is...

Arun George

OZ Minerals Could Get an Improved Offer from BHP

Bloomberg reported that BHP has been considering raising its bid. The OZ Board has a strong justification for a higher offer. The shares are...

Arun George

Opportunities Within Energy and Materials

Global indexes remain below our key lines in the sand of $54 on $ACWX, $75.25 on $EFA, and the 200-day MA on $ACWI. As long as prices are below...

Vermilion Research

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