Daily Brief Energy/Materials: Anglo American, Panoro Energy ASA, Itaconix , Sirius Minerals, Nutrien , Trigon Metals , Celanese Corp Series A and more

• On 22 May, Anglo American rejected the last offer (0.8860) from BHP on execution risks, potential negative value impacts and additional approvals needed in South Africa. PUSU extended 29 May.
• I update my SOTP to 2938p. Copper Fair Value, in my opinion, is £17.70 per share. This contrasts with BHP’s current offer of £21.32/share for the entirety of Anglo’s rump.
• There is now a ~20.1% difference between the implied value of BHP’s offer and the share price of Anglo. The market assumes a lower likelihood of an agreed deal

• The 1Q24 production of 9,605 bbl/d, the cash position of US$22.4 mm and the debt position of US$80.6 mm had been reported previously.
• The 1Q24 operating cash flow of US$25 mm was impacted by US$5.4 mm of negative working capital movement and US$3.6 mm negative inventory movement.
• This suggests an underlying operating cash flow of US$34 mm for the period.

• Itaconix Plc’s (AIM: ITX.L, OTC: ITXXF) vision – safer chemicals in consumer goods.
• ITX makes IP protected innovative bio-polymers that replace acrylic acid and styrene based polymers (US$ 20bn market) in consumer products.
• IA polymers have commercial applications in consumer and specialty chemicals markets including detergents markets as water softeners and dispersants; odour capture markets and hair products markets for hold, texture and flexibility.

• Woodsmith project is a novel mine in the UK owned by Sirius Minerals, later acquired by Anglo.
• The project involves extracting polyhalite, a nutrient-rich mineral, from a deep underground seam.
• Local residents became shareholders in the project, with 85,000 retail shareholders, 10,000 of which were from the York area.

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• Ionic Rare Earths Ltd (ASX:IXR) is a rare earths mining explorer (Uganda) and REO magnet recycling company (Belfast, UK).
• We have excluded Belfast recycling from our valuation at this stage.
• Since ACF’s IXR Initiation note published on 05 Dec 2023 IXR’s ownership in the Makuutu project has increased to 94% up 34pp from 60%.

• Ionic Rare Earths Ltd (ASX:IXR) is a rare earths mining explorer (Uganda) and REO magnet recycling company (Belfast, UK).
• We have excluded Belfast recycling from our valuation.
• IXR appears significantly undervalued on an intrinsic and EV/M+I basis compared to its peers.

• Ionic Rare Earths Ltd (ASX:IXR) is a rare earths mining explorer (Uganda) and REO magnet recycling company (Belfast, UK).
• We have excluded Belfast recycling from our valuation at this stage.
• IXR is currently ahead of its most recently published schedule.

• Nutrien reported an adjusted EBITDA of $1.1 billion for Q1 2024, attributed to higher margins in crop inputs, increased fertiliser production, greater sales volumes, and lowered operating costs.
• The company’s Ag Solutions division reported a 15% increase per tonne margins compared to Q1 2023, supported by robust grower demand and a return to standardised margins in North America.
• In relation to operational and market developments, Nutrien increased crop protection inventory in Brazil to manage high inventory levels and reduce operating costs.

• Trigon announced it has achieved commercial production from the underground operations at its Kombat Mine.
• TM also announced production results for January through April, showing substantial improvement both in grade and produced copper in the month of April, the first month of operations from the underground.
• We are impressed by today’s results and excited for future production and financial results as TM begins its first full fiscal year of copper production and starts mining the much higher grade underground

• In the Q1 2024 earnings, Celanese Corporation addressed a range of issues including their outlook on market trends and company-specific activities.
• Starting with the macroeconomic outlook, CEO Lori Ryerkerk stated that the environment remains broadly unchanged from previous expectations.
• Notably, they have not identified any significant positives or negatives in the quarter, with destocking trends appearing to be ending and order books stabilizing.