Daily Brief Energy/Materials: Pi Industries, Lyondellbasell Indu Cl A, VAALCO Energy, Planet Gas Ltd, Trigon Metals , Alkane Resources, Vulcan Materials Co, Egdon Resources PLC, Pan American Silver and more

• There are five changes for the NSE Nifty Next 50 Index (NIFTYJR INDEX) that will be implemented at the close on 27 March. Changes are on expected lines.
• Estimated one-way turnover for the NSE Nifty Next 50 Index (NIFTYJR INDEX) is 10.1% resulting in a one-way trade of INR 22.2bn (US$268m).
• Apart from the impact on the adds and deletes, there will be a big impact on some of the non-F&O stocks due to capping and funding flows.

• Upon evaluation of LyondellBasell’s Q4 and full-year 2023 results, a finely balanced investment thesis can be derived, considering the company’s strategic initiatives, performance, and the broader economic environment.
• LyondellBasell safely navigated a challenging year, as illustrated in its outcome of earning $8.65 per share and a robust EBITDA of $5.2 billion.
• The company’s cash generation was commendable, marked at $4.9 billion from operations, validating its efficient cash conversion ratio of 98%.

• VAALCO is in discussions with Svenska Petroleum Exploration regarding a possible corporate transaction to acquire Svenska, whose primary asset is a 27.39% interest in Block CI-40, offshore Cote d’Ivoire.
• Current working interest production is approximately 4,500 boe/d net to Svenska.
• In 2022, Svenska generated after tax cashflow (before changes in working capital) of ~US$115 mm.

• Sky Metals Limited (ASX:SKY) is an ASX-listed base metals explorer focused on a portfolio of assets in New South Wales with the most advanced being the Tallebung tin project in central NSW. The company recently made material progress on the expansion of the mineral resource estimate (MRE) at Tallebung which positions it to be scoped for a bulk-mining operation.
• SKY says it is now planning a further drilling programme on a defined exploration target of approximately 23Mt-32Mt at a grade of between 0.14%-0.17% tin to build out the indicated resource for the mine scoping studies.
• The cash balance of $1.12m at the end of December 2023 suggests to us that the company may need to raise capital to complete its programme.

• TM announced its operational highlights for Q3 ending Dec 31st.
• The Company reported its first operational profit, albeit small, setting itself up for a big year in 2024 as the underground comes online.
• TM announced plans to spin-out its Moroccan assets, namely the Silver Hill and Addana projects.

• Alkane Resources Limited (ASX:ALK) is an ASX-listed gold producer and explorer with a focus on central west New South Wales.
• The Perth-headquartered company owns and operates the Tomingley gold mine and processing facilities, south-west of Dubbo and the Northern Molong porphyry project in central west NSW which includes the highly prospective Boda and Kaiser deposits.
• ALK recently announced high-grade results from the Kaiser resource upgrade drilling programme and upgraded the Boda resource to 6.6mn ounces of gold equivalent (AuEq), with 4.4Moz AuEq inferred.

• Vulcan Materials is America’s largest producer of construction aggregates, providing the foundation for buildings, roads, and infrastructure.
• The company owns over 400 quarries located within 60% of the US population, producing aggregates used in asphalt and concrete.
• The industry structure involves owning quarries and crushing rocks down to create materials used in various construction projects, with a market size of around $35 billion.

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Edison Investment Research is terminating coverage on Egdon Resources (EDR). Please note you should no longer rely on any previous research or estimates for this company. All forecasts should now be considered redundant. Previously published reports can still be accessed via our website.

Pan American Silver (PAAS) has released its FY23 financial results, which are in line with our estimates at the EBITDA level, an encouraging outcome given the operationally challenging year. While the bottom line was once again affected by non-cash one-offs, cash flow generation was robust, with FY23 operating cash flow of US$450m. We have slightly adjusted our FY24 estimates and rolled the model forward, resulting in a marginally updated valuation of US$22.2/share. The company’s decision to launch a buyback should partly compensate for the weak share price performance, which we believe does not reflect supportive gold market fundamentals and what is likely to be a year of more consistent operating performance.