Energy & Materials Sector

• The MV J-Gold Miners index represents the performance small-cap gold and silver mining companies listed around the world.
• This index is reviewed semi-annually in March and September. During these reviews, names can be added or deleted from the index.
• In this insight, we take a look at the potential ADDs and DELs and our flow expectations for the index rebal event in March 2024. 

• YE23 1P and 2P reserves are estimated at 29.9 mmbbl and 37.9 mmbbl respectively. This represents a reserve replacement ratio of 219%.
• The reserves addition is much greater than we expected.
• Valeura has booked 7 mmbbl at Wassana (we expected only 5 mmbbl) and has replaced 112-147% of the 2023 production at each of the other fields. 

• The CN-5 well encountered 45 feet of Ubaque pay to base of sand with 25% porosity and 5 Darcy permeability.
• The well targeted the Carrizales Noroeste prospect, west of the Carrizales Norte known pool boundary.
• The boundary fault was not encountered in the Ubaque, which suggests that the Ubaque at Carrizales Norte and Carrizales Noroeste consists of a continuous larger pool that extends to the West.

• Orica Ltd (ORI AU) is looking to raise up to A$400m (US$260m) in its primary placement. The proceeds will be used to partially fund the acquisition of Cyanco. 
• The deal is a large one to digest, representing 21.3 days of three month ADV and 5.2% dilution. 
• In this note, we’ll run the deal through our ECM framework and comment on deal dynamics.

Pan African Resources’ (PAF’s) H124 results were released on 14 February, with earnings (and headline earnings) within 1.5% of our forecast and normalised headline earnings within 1.2% of our forecast (see Exhibit 4). While only one asset (BTRP) achieved record adjusted EBITDA, PAF’s three other main assets all recorded adjusted EBITDA numbers that were close to record levels in rand terms to result in a record adjusted EBITDA outcome for the group as a whole of ZAR1,512.6m – 20.2% above H222 and a comfortable 19.6% above the next highest number, of ZAR1,264.8m, set in H122.

• After Boral (BLD AU) rejected Seven Group (SVW AU)‘s $6.50/share Offer in 9 June 2021, Seven bumped to $7.30 cash if they got to 29.5%, and $7.40 if 34.5%.
• Seven reached 29.5% by July 1, 34.5% less than a week later, then 52.65% on the 15 July, and at the close of the Offer (29 July 2021), held 69.6%.  
• Seven, now holding 71.6%, has made a cash/scrip Offer for shares not owned, with certain tendering thresholds triggering more cash. Terms are best & final.

• Amman Mineral Internasional (AMMN IJ) raised around US$714m in its Indonesia IPO, after pricing the deal at IDR1,695/share. Its eight-month lockup will expire on 21st Feb 2024.
• Amman Mineral International (AMI) carries out exploration, development, mining, and processing. The company operates an open pit copper and gold mine known as the Batu Hijau mine in Indonesia.
• In this note, we will talk about the lock-up dynamics and updates since our last note.

• With the review period complete, there could be 3 changes for the iShares China Large-Cap (FXI) (FXI US) in March.
• CGN Power (1816 HK), Yankuang Energy (1171 HK) and China Coal Energy (1898 HK) could replace Wuxi Biologics (2269 HK), China Resources Beer (291 HK) and China Vanke (2202 HK). 
• Short interest on China Vanke (H) (2202 HK) and Yankuang Energy Group (1171 HK) is higher than the other stocks and there could be covering on implementation day.

• Seven Group Holdings (SVW AU) has launched a takeover offer for Boral Ltd (BLD AU). The minimum consideration is A$6.05 (A$1.50 cash and 0.1116 SVW shares per BLD share).
• Based on SVW reaching certain voting thresholds, the offer could be increased by an additional A$0.20 cash per share, implying a maximum consideration of A$6.25 per share.
• While the low offer premium could deter acceptances, SVW aims to spur acceptances by warning it will delist BLD and not pay dividends for the foreseeable future. 

• Waaree Energies Limited (0656504D IN) (WEL) has filed its DRHP. The company is the largest player in the Solar PV Modules manufacturing space in the country.  
• The company has seen a sharp growth in sales in F23, backed by China plus one phenomemon. 
• However, the financials do have a few talking points, such as high RPT, large inventory in transit, faster depreciating newer assets, etc.

• This is our first report on packaging products manufacturer, Crown Holdings, Inc.
• The management presented a comprehensive outline of their financial performance during their Q4 2023 earnings call, with a clear emphasis on their North American and Brazilian markets.
• The company launched with a comparison of adjusted earnings, revealing an increase from $1.17 in the prior-year quarter to $1.24 in the recent quarter.

• Seven Group Holdings (SVW AU) holds 71.59% in Boral Ltd (BLD AU) and is looking to acquire the remaining shares at A$6.05/share via a mix of SVW stock and cash.
• The offer consideration ratchets higher to A$6.15/share if SVW’s aggregate shareholding reaches 80% and to A$6.25/share if SVW’s aggregate shareholding reaches 90.6%.
• Seven Group Holdings (SVW AU) is an addition to a global index at the end of the month and a drop in the stock post inclusion will affect Boral Ltd.

• Globe Metals & Mining Ltd (ASX:GBE) is a Perth-based, Africa-focused resources company developing the Kanyika niobium project in Malawi, east Africa.
• GBE has been undertaking exploration and resource development activities at Kanyika since identifying niobium and tantalum mineralisation at the site back in 2007, and is now poised to bring the first niobium mine into production in more than 50 years and the first ever for Africa.
• The Kanyika niobium project has a mineral resource of 68Mt at 0.283% niobium based on approximately 33km of drilling. 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• JSW Steel Ltd

• OPEC bullish on global oil demand growth, while IEA remains negative as it lowers its forecast from the previous report.
• US commercial crude inventories see stronger-than-expected buildup as refinery utilisation levels drop.
• OPEC is optimistic about the world economic growth in 2024 and 2025, increasing growth forecasts compared to the previous report.

• The copper market has experienced significant changes in the past few months, with supply constraints and increased demand from smelters in China.
• Major incidents, such as the suspension of production at First Quantum’s Cobra Panama mine, have contributed to a deficit in the market.
• Treatment and refining charges (TCRCs) have been on a downtrend, reflecting the tight supply and increasing demand, leading to more spot transactions in the market.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• The transition to a low carbon economy, also known as the brown to green transition, involves moving from an economy based on fossil fuels with high carbon emissions to one with lower emissions.
• This transition will require a significant mobilization of capital, with estimates in the tens of trillions of dollars. Governments and the private sector are providing support and driving the change due to both funding and economic factors.
• In addition to investing in wind and solar infrastructure, the low carbon transition will require a significant amount of metals and materials. This includes steel, cement, rare earth, aluminum, silver, polysilicon, copper cabling, and more. The transition will create a more materials-intensive global economy.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.

• In the Fourth Quarter 2023 Earnings, ConocoPhillips maintained a solid execution across all aspects of its investment mandate.
• The company reported record production, marking itself as an industry leader in reserve replacement.
• It advanced its global liquified natural gas (LNG) strategy with expansion in Qatar, final investment decision (FID) at Port Arthur, and several offtake and regasification agreements.

• BP’s fourth quarter and full-year 2023 earnings call updates showcase the company’s robust growth strategy and progressive journey from an international oil company (IOC) to an integrated energy company (IEC).
• The firm shows a steadfast commitment to rendering higher margins with reduced emissions, evident from the introduction of biofuels, sustainable aviation fuel and biodiesel to customers while concurrently reducing their plants’ carbon footprints.
• Over the past four years, BP’s reputed trading organization has optimized these chains to drive returns surpassing industry standards.

• Q1-3 FY3/24 results were in line with company guidance, reflecting the strategic importance for DKK to scale its new growth initiatives.
• Ongoing positive developments related to semiconductor, secondary battery, and biomaterial applications were offset by weakness in electronics and the mature profile of the core automotive catalyst business.
• Operating a business model that is externally driven (such as FX movements and market pricing), the company has disclosed ROIC targets that coincide with its current 10- year plan for FY3/32. 

• BayCurrent Consulting, Open House, Sumitomo Chemical, Koei Tecmo Holdings, Kose Corp, Oji Holdings, Daiwa House Reit Investment and Tosoh Corp will have passive selling at the close on 29 February.
• Short interest has increased on all these stocks over the last few weeks and there has been big underperformance versus the Nikkei 225 Index and TOPIX Index.
• Cumulative excess volume has increased on the stocks and there will be short covering in the last week of the month.

• The Morattis have agreed to sell their 40% stake in Saras SpA (SRS IM) to Vitol at €1.75/share (implied equity value €1,664 million), which will trigger a mandatory takeover offer.
• Saras has only an asset, the largest refinery in Italy, based in Sardinia, which should add scale to Vitol. At 12.5x Fwd P/E, the offer represents a premium to peers.
• Considering the unimpressive stock market performance of Saras since listing, and potential Trafigura overhang, it’s a good time to cash in. Spread is 1.54%/8.58% (gross/annualised, assuming settlement by 23 April). Long.

• Ring’s 4Q23 production averaged ~19,400 BOE/d, near the high end of management’s 18,900-19,500 BOE/d guidance range.
• Average production increased 11% from 3Q23, reflecting the full-quarter inclusion of  volumes acquired in the Founders acquisition, which closed in August 2023, and from volumes added from the completion of the 2023 development program in the quarter.
• Management expects 1Q24 production to average 18,000-18,500 BOE/d. 1Q24 volumes were adversely affected by winter weather disruptions in January, which deferred ~1,900 BOE/d for 10 days and natural declines from wells completed during 2H23.

• HighPeak declared a quarterly common stock dividend of $0.04 per share on February 5, 2024, a 60% increase from the prior dividend of $0.025 per share.
• The 1Q24 dividend will be paid on March 25, 2024, to shareholders of record as of March 1, 2024.
• The board also authorized a $75-million common stock repurchase program effective through December 31, 2024.

• OceanaGold Philippines (OGCP000D PM) is looking to raise up to US$140m in its upcoming Philippines IPO. The deal will be run by BDO Capital and CLSA.
• OceanaGold Philippines (OGPI) is a producer of gold and copper in the Philippines, and a subsidiary of OceanaGold Corporation, a Toronto Stock Exchange (TSX) listed gold mining and exploration company. 
• Based on the Mines and Geosciences Bureau (MGB), OGPI was the second largest producer of gold and copper in the Philippines for FY22 and 9M23.

• 12 days ago, JSR Corp (4185 JP) announced that former research collaboration partner Research Foundation of the State University of New York had sued in an intellectual property ownership dispute.
• I wrote about it here to the extent I could. Since then, more information has become available, or available to me.  Some details on the case. Some on lawyers. 
• Since then JSR has reported earnings with unchanged forecast, and major pure play comp Tokyo Ohka Kogyo (4186 JP) today reported earnings; the stock popped 10+% to an all-time high.

• With two days left in the review period, there could be 28 adds/deletes across the S&P/ASX family of indices in March.
• There is nearly A$1bn to sell in Newmont (NEM AU) due to the potential S&P/ASX 20 Index deletion and a large decrease in the number of shares held in Australia.
• There could be 2-41 days of ADV to buy in the index inclusions while the impact on the deletions will range between 0.7-24 days of ADV.

• CSI 300 represents the 300 largest stocks by market capitalization and liquidity from the entire universe of Shanghai and Shenzhen Stock Exchanges. CSI 500 represents the next largest 500 names.
• In this insight, we take a look at the potential ADDs/DELs for the CSI 300 and CSI 500 rebalance in June 2024.
• I currently see 11 changes for the CSI 300 index and 50 changes for the CSI 500 index.

• The first two wells of the Wassana drilling programme have exceeded the company’s expectations with production from the field now over 4,000 bbl/d.
• With a third well expected to boost production further in the next few days, production from the field could be higher than the target of 4.5 mbbl/d.
• The company has decided to extend the current drilling programme at Wassana by adding two wells (from 3 to 5).

• The Ball Corporation’s earnings for the fourth quarter highlighted several of its strategic decisions, performance outcomes, and upcoming developments.
• The company had strong operating results in the fourth quarter and throughout 2023 which generated a free cash flow of $818 million.
• The company’s strategic decisions ranged from the sale of its aerospace business to adjustments in its manufacturing footprint.

In its post-Indaba release of 13 February, KEFI announced that the multi-party, subsidiary-level financing of its Tulu Kapi gold project in Ethiopia is now advancing on the back of Ethiopian federal government commitments finally received in October 2023. As a result, the lead lender quickly processed its approval in December 2023 and now all other stakeholders are triggering their respective flow-on processes. At the same time, the Federal Government of Ethiopia has confirmed that its equity capital investment has been fully documented, committed and already partly invested, while the contractors to the project have reaffirmed their intention and readiness to enter into the already drafted agreements to enable full project launch in H124 (as previously indicated by KEFI).

• The review period for the March rebalance of the MVIS Australia Equal Weight Index ends on 29 February with results announced on 8 March and implemented on 15 March.
• Lendlease Group (LLC AU), IDP Education (IEL AU) and IGO Ltd (IGO AU) are very close to deletion zone and price moves over the next couple of weeks are important.
• IGO Ltd (IGO AU) is also a deletion from a global index in February and a lower stock price could lead to deletion from this index too.

• Flotek’s suite of chemical solutions, which can help customers increase economic returns on their capital investment, helped the company gain market share during FY23 despite headwinds created by a declining US rig count.
• The company’s prescriptive chemistry solutions, combined with its proprietary Complex nano Fluid (CnF)® technologies, have demonstrated improved production performance over a large population of wells completed in the Permian Basin.
• Customer efforts to improve their returns on capital could continue to provide a buffer against headwinds and result in further market share gains in 2024. 

• Continued strong asset performance across VAALCO’s portfolio in Gabon, Egypt, and Canada contributed to 4Q23 production and sales at, or above, the high end of management’s November 7, 2023, updated outlook.
• 4Q23 working interest (WI) production and sales fell to 23.1-23.5 MBOE/d and 27.4-27.6 MBOE/d, compared with guidance of 22.9- 24.6 MBOE/d and 25.3-27.6 MBOE/d, respectively.
• 4Q23 net revenue interest (NRI) production and sales volumes averaged 17.9-18.2 MBOE/d and 21.725-22.125 MBOE/d, compared with guidance of 17.6-19.4 MBOE/d and 19.8-22.0 MBOE/d, respectively.

• Observable crude inventories in key regions have steadily drawn down, reaching 40 million barrels below December levels.
• Global onshore crude inventory is at a record low of 4.4 billion barrels, signaling increased demand.
• Refinery runs and healthy refinery cracks and margins are drawing down on crude inventories, supported by strong gasoline cracks.

This podcast is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only.

• We summarise the latest spreads and newsflow of merger arb situations we cover across Hong Kong, Australia, New Zealand, Singapore, Japan, Indonesia, Malaysia, Philippines, Thailand and Chinese ADRs.
• Highest spreads – Welbe Inc (6556 JP), Probiotec Ltd (PBP AU), JSR Corp (4185 JP), Shinko Electric Industries (6967 JP), Genetron Holdings Ltd (GTH US), Lithium Power International (LPI AU). 
• Lowest spreads – Tietto Minerals Ltd (TIE AU), Orecorp Ltd (ORR AU), QV Equities Ltd (QVE AU), Pact Group Holdings (PGH AU), CPMC Holdings (906 HK), Irc Ltd (1029 HK). 

Key points (machine generated)

• Maithan Alloys is a leading manufacturer of Manganese (Mn) alloys used in the production of hardened steel.
• The company operates three plants in India and recently acquired a fourth, indicating its growth and expansion in the industry.
• India, where Maithan Alloys is based, is the largest exporter of Mn alloys in the world, providing 25% of global imports, and maintains its position as a low-cost supplier despite structural disadvantages.

This article is sourced from an online content aggregator through publicly available sources and is displayed below for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Gold platinum ratio (“GPR”) measures the price of gold relative to platinum. it is affected by recessions, monetary policy, and stock market returns.
• GPR has been rising since 2008, it has outperformed gold and platinum individually since 2006 and other gold spreads (gold-silver, gold-palladium, gold-copper) since 2000. 
• The outlook for both gold and platinum remains uncertain. A bullish view of the GPR looks more favorable.

• YE23 1P, 2P and 3P reserves were estimated at 48 mmbbl, 100 mmbbl and 200 mmbbl respectively.
• This represents an increase of 6%, 4% and 19% respectively compared to YE22.
• The YE23 1P and 2P reserves estimates imply a Reserves Replacement Ratio of 150% and 167% during 2023.

• Exxon Mobil Corporation concluded its fourth quarter of 2023 with strong results, emphasizing the execution excellence of its business units throughout the year.
• These results were primarily driven by the company’s commitment to its employees’ operation and safety standards alongside significant strides in project building, technology deployment, supply-chain management, and trading.
• Baptista Research looks to evaluate the different factors that could influence the company’s price in the near future and attempts to carry out an independent valuation of the company using a Discounted Cash Flow (DCF) methodology.

• International Paper Company’s financial performance for the fourth quarter of 2023 was largely influenced by challenging market conditions.
• Demand for the company’s products was notably lower throughout the bulk of the year.
• This change in demand was driven by consumers choosing to focus their spending on services and essential goods.

• Based on the third fiscal quarter 2023 earnings, it becomes clear that WestRock is focused on improving business outcomes and delivering value to shareholders even in a challenging market environment.
• Net sales for the quarter stood at $5.1 billion, with consolidated adjusted EBITDA at $802 million.
• The company exceeded its guidance owing to strong execution, productivity gains, and moderating input costs.

• Southern Copper Corporation’s earnings centered around its 2023 results and offered insight into the company’s financial outlook.
• The company reported net sales of $9,896 million in 2023, which was lower by 1.5% compared to 2022.
• Despite the reduction, the company considers the results satisfactory, owing to higher sales volumes for copper and molybdenum, as well as better prices for molybdenum and silver.