Daily Brief Energy/Materials: EcoPro Materials, Sumitomo Metal Mining, Novelis Corporation, Iron Ore, Chariot Limited, Kolibri Global Energy , Geopark Ltd, Intl Flavors & Fragrances, Pan African Resources, Alkane Resources and more

• After the market close on 20 May, it was reported that Blue Run Ventures (BRV) sold 204.1 billion won (US$150 million) worth of EcoPro Materials in a block deal sale. 
• The block deal sale price was 93,000 won, a 9.7% discount to the closing price on 20 May (103,000 won).
• This block deal sale at a big discount is likely to raise overhang concerns about further block deal sales by BRV Capital in the coming years. 

• Company Forecasts extremely conservative at current and expected metal prices
• Scarcity Value for a liquid, large-cap gold miner in Japan
• Balance Sheet will allow future share buybacks and dividend in the harvesting phase

• Novelis Corporation (0620365D US) Novelis is looking to raise US$1.2bn in its upcoming US IPO. The firm is owned by Indian-listed Hindalco. The deal will consist of 100% secondary shares.
• Novelis is a global provider of aluminum solutions for the beverage packaging, automotive markets, specialties markets and aerospace.
• In this note, we look at the firm’s past performance.

• Following our initiation on Mount Gibson Iron (MGX AU) and Kumba Iron Ore (KIO SJ), recently we initiate coverage on Champion Iron (CIA AU), a pure play with Canadian assets.
• Although it is more richly priced than the other two names, it offers a 50% volume expansion opportunity in FY25/26, subject to financing availability. 
• Trading at 8.6x FY25 (March-end) PE, 4.6x EV-EBITDA, and a 6% dividend yield (subject to capex), this is not our favorite name at the current price due to production uncertainty. 

• Chariot has started to drill the Dartois prospect onshore Morocco.
• The well is targeting a different reservoir system and trapping style than the Gaufrette prospect.
• The main target at Dartois is estimated to hold 12 bcf of gross prospective resources.

Kolibri Global Energy (KEI) has reported Q124 results that saw flat EBITDA quarter-on-quarter as double-digit growth in average production to a record 3,305boepd was offset by lower commodity prices and a one-off increase in operating costs. We have updated our estimates to reflect the results and the recent well reworks, lowering our FY24 EBITDA estimate by 9%. As a result, our valuation of KEI falls from US$7.1 to US$6.9/share. The stock continues to trade at undemanding valuation multiples and, despite the increased volatility, the oil price remains generally supportive of the share price.

• 1Q24 production had been reported previously.
• GeoPark held US$151 mm in cash at the end of March.
• Adjusting for a negative working capital movement of ~US$20 mm in 1Q24, this would have been in line with our forecast.

• IFF is a major supplier to various end markets such as food and beverage, fragrance, home care, and health and wellness
• The company sources natural ingredients from sources like flowers, fruits, and marine products
• IFF is expected to meet expectations in its Q4 ’23 earnings report, with a new CEO expected to bring improvements in operating performance and stock price

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.

On 9 May, Pan African announced that it was narrowing its production guidance for the year ending 30 June 2024 to 186–190koz (cf 180–190koz previously), notwithstanding the cessation of production from surface sources at Evander in H2. Group AISC guidance was maintained at US$1,325–1,350/oz (at ZAR18.50/US$) however. Consequently, we have increased our H2 production forecast by 2.5% as well as increasing our H224 gold price by 9.2% to result in a US$20.6m positive variance in H224e revenue, only partially offset by incidental higher costs, to result in a 41.7% increase in H224e normalised EPS and a 19.1% increase in FY24e normalised EPS. Production guidance was also provided for FY25 of 215–225koz, which compares with Edison’s prior (and unchanged – and, in the event, relatively conservative) forecast of 216.6koz.

As with Boda before it, April’s resource update at Kaiser saw substantially all of its resource promoted from the inferred to the indicated category at a materially higher grade of both gold and copper. The close-spaced nature of the drilling required to achieve this will now allow these resources to be quickly and easily promoted to reserve status for the purpose of Alkane’s scoping study – or preliminary economic assessment – to be announced later this quarter.