Daily Brief Energy/Materials: Arcadium Lithium , Straits Trading, Gold, Solaris Resources , Vicat, Ovintiv , Sintana Energy , Petroleo Brasileiro and more

• The Arcadium Lithium (ALTM US) scheme meeting relating to Rio Tinto Ltd (RIO AU)’s US$5.85 offer is on 23 December. The transaction is expected to close in mid-2025.
• The high current 12.3% spread reflects risk related to regulatory and shareholder approvals. The numerous required regulatory approvals pose a risk to completion and/or timing.  
• Despite depressed lithium prices, the offer remains unattractive on several fronts. Blackwattle, which opposes the offer, could rally others to force a bump. Rio conceding to a bump is uncertain. 

• Straits Trading (STRTR SP) is a conglomerate-investment company with diversified investments in resources, real estate and hospitality.
• Straits Trading’s key growth engine is its real-estate arm – Straits Real Estate (SRE) which has a diversified property portfolio across different geographies and various sectors.
• Despite fluctuations in STC’s earnings, the company continues to pay stable dividends to its shareholders. As at the end of June 30, 2024, Straits Trading generated cash and bank balances of SGD476.4m. STC continues to generate positive cash from operations.

• Back on the 9th October, Rio Tinto Ltd (RIO AU) reached an agreement to buy Arcadium Lithium (LTM AU/ALTM US) for US$5.85/share (~A$8.70/share), a ~90% premium to undisturbed.
• The proxy statement is now out, with a Scheme Meeting scheduled for 23 December. The transaction is expected to close in mid-2025. The long stop is the 9th October 2025.
• Trading wide-ish at a gross spread of 11.9%, reflecting the timing to secure regulatory approvals – notably from China – as opposed the Offer Price being viewed as opportunistic.

• The Drill: Could nuclear be the next Trump bet?
• This week’s The Drill examines commodities in the aftermath of Trump’s election, where calm has begun to return as risks were initially overestimated.
• Nuclear energy is likely an underappreciated theme in the new Trump administration, while tariff threats appear overblown.

• Solaris Resources (SLS CN) announced sweeping changes to its management and ties to Canada. It will also spin-off some of its exploration targets in a new company.
• While its listing will remain in Canada for now, its physical presence in the country will cease and operations will be run out of Switzerland, Ecuador and Peru.
• The shake-up is an answer to the Canadian government’s decision earlier this year blocking Chinese Zijin Mining Group Co Ltd H (2899 HK) from making an investment in Solaris.

• Vicat is a mid-sized global cement, aggregates, and ready-mix concrete operator with operations in 12 countries, primarily in developed markets.
• Despite its strong presence in the industry, Vicat has traditionally traded at a discount compared to its European peers, but the discount has widened significantly in recent years.
• With a solid balance sheet and attractive valuation metrics, Vicat’s equity is currently trading at historically cheap levels, presenting a potential investment opportunity for investors.

This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only. This article was originally published 3 months ago on Value Investors Club.

• Ovintiv Inc. showcased robust operational and financial performance in its 2024 third-quarter results, underscoring both strengths and areas for cautious consideration.
• The company reported net earnings of $507 million, equivalent to $1.92 per share, along with cash flow of $978 million, or $3.70 per share, which surpassed consensus expectations.
• This was primarily attributed to production exceeding the upper end of guidance ranges for all product categories, coupled with cost efficiency driving performance.

• ~11 high impact appraisal/exploration wells will be drilled on various licences in Namibia over the coming months.
• This is very material and is expected to attract the attention of investors.
• Sintana provides exposure to three out of the six licences with high impact drilling.

• Petroleo Brasileiro S.A., commonly known as Petrobras, has reported its Q3 2024 results, outlining several key operational and financial highlights.
• On the operational front, Petrobras continues to make significant strides in its exploration and production activities.
• The company has successfully started operations on two FPSOs (Floating Production Storage and Offloading), namely Maria Quitéria and Marechal Duque de Caxias, with further developments expected in the Búzios field through the Almirante Tamandaré FPSO.