Anglo Rolls the Changes to Evade BHP

Aus government dishes out incentives, Biden bans Russian nuclear reactor fuel imports

G’day GC #

The Pre-Start

  • Anglo is rolling the changes, simplifying its asset portfolio to copper, iron ore & crop nutrients. It will exit coking coal, platinum, nickel & diamonds (AAL.l) Personally we think Anglo needs to acknowledge Woodsmith is a massive dud too. We’ll have more to say about this in the future.

Anglo Strategy

From Anglo’s latest strategy update

  • NexGen’s quarterly call last night was entertaining, especially Leigh’s reference to “anonymous people on social media” - we all know they read the tweets as the ASX CDIs settle today (NXG)

  • Capricorn Metals has appointed a new COO and CFO (CMM)

  • Black Cat shared a scoping study update for Coyote, estimating it’ll hit a max cash drawdown of $56m, produce gold within 7 months of restart, have an AISC of $1,613/oz and produce 200koz at 46kozpa (BC8) Are $3,500 gold cashflow assumptions the new norm?

  • AIC Mines announced drill results from Eloise, including hits such as 18.5m at 3.2% Cu and 0.7g/t Au, drilling from 115m below surface. This should supplement primary production over the next 18 months (A1M)

High Grade It

  • Joe Biden signed into law the ban on Russian nuclear reactor fuel imports (Reuters)

  • Anglo is making big changes to shrug off BHP, selling their coking coal assets and exiting platinum, nickel and diamonds. The refreshed Anglo will focus on copper, iron ore & polyhalite (AFR)

  • BHP responded to Anglo’s strategy, stating it vindicated the takeover structure & proved the offer is manageable (AFR)

  • The government announced a $22.7 billion package to boost manufacturing & renewable energy. ~$7b in incentives have been awarded to mineral processing & hydrogen production each (Reuters)

  • The Albanese government is trying to unlock $50b in private spending with incentives to turbocharge critical minerals processing & hydrogen production (The Australian)

We are perplexed at how the centrepiece policy is “yet to be developed”

  • Amplats shares dipped as much as 10% following Anglo revealing its plans to divest (Bloomberg)

  • BHP has one week, or it’s sidelined for 6 months in its chase for Anglo, as the M&A game of chess heats up (AFR)

  • The Congress of South African Trade Unions, the country’s biggest federation of labour groups, said it welcomed Anglo’s commitment to the country (Bloomberg)

  • The Karoon CEO declared a target of 50k barrels per day, while investor Fred Wollard said the company needed to explain why an acquisition to achieve this would improve shareholder returns (The Australian)

  • Anglo’s decision to ditch diamonds puts the industry under further stress, with lab-grown gems among numerous pressures (Bloomberg)

  • CBMM sold 600 tons of niobium oxide for batteries in scooters and other small vehicles last year as part of a test project (mining.com)

Wheelin’ n Dealin’

  • Stellantis (owner of Fiat, Jeep, Chrysler & more) is in talks with Vale and Huayou Cobalt to invest in an Indonesia nickel smelter (FT)

Rattlin’ the Tin

  • SolGold secured a US$10m loan facility for its Cascabel copper-gold project (SOLG.l) A shocking detail light announcement

  • ASX debutant, Sun Silver, commences trading today following a $13 million IPO (SS1)

Word on the Decline

  • While the public messaging surrounding Glencore’s Isa smelter has suggested the major intends to shut it down by end of 2025, we are led to believe that Glencore is more likely to run the smelter until at least 2030. Eyes on the ground in Mount Isa tell us that Glencore is currently drilling beneath the town’s golf course, suggesting to some that they are getting ready to super-pit the town resource.

  • Couple this observation with the recent acquisition of the secured debt in Austral - we think Glencore’s plan will be to have a controlling stake in the pro-forma post recapitalisation, but the main game is of course feed.

  • The state government is no doubt expected to play a role in keeping the piece of infrastructure running. Remember, the agricultural industry depends on the byproduct sulphuric acid from the smelter which is sold to Incitec Pivot.

In the Weeds

  • Howard Marks memos are always worth a read, & his latest on “The Impact of Debt” is no different (written, audio)

  • Libyan authorities arrested several high-ranking customs officials in connection with a foiled attempt to smuggle about US$2 billion worth of gold (Bloomberg)

  • Reuters wrote up a look through the latest US tariffs on China, covering batteries, EVs, semis, solar cells and a host of critical minerals

  • Former Goldman Sachs head commodity strategist Jeff Currie has declared copper the new oil, whilst still bullish energy

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Today’s Top Tweet

Devil’s in the Detail

Reading Street Talk’s recent column on the Karoon Energy activist saga, as the company’s AGM approaches, the comment that the four major proxy firms (ISS, Ownership Matters, ACSI and Glass Lewis) intend to tell their clients to vote in favour of the board’s recommendations stood out to us.

The company raised US$350m in debt with no purpose (paying US$40m pa for the luxury), downgraded production one month after acquiring the Gulf assets, launched a disastrous capital raising that destroyed shareholder value last year and now wants to do more M&A!

With all the under its belt, the board wants a pay rise through its misaligned remuneration report and NED fee pool.

With the influence that proxy firms have in their role as advisers to institutional money, we can’t help but think they need to take a closer look and stick up for shareholders here.

Disclaimer

All information in this newsletter is for education and entertainment purposes only and is of general nature only. The hosts of Money of Mine are not financial professionals. Money of Mine are not aware of your personal financial circumstances. Before making any investment decision, you should consult a licensed financial, legal or tax professional, along with considering any relevant Product Disclosure Statement. Money of Mine does not operate under an Australian financial services licence and relies on the exemption available under the Corporations Act 2001 (Cth) in respect of any information or advice given. Money of Mine strives to ensure the accuracy and currency of the information contained in this newsletter but we do not make any representation or warranty that it is accurate, reliable or up to date. Any views expressed by the hosts of Money of Mine are their opinion only and may contain forward looking statements that may not eventuate. Money of Mine will not accept any liability whatsoever for any direct, indirect, consequential or other loss arising from any use of information in this newsletter.

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