IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Event-Driven

<ul>
<li>
<a href="https://www.smartkarma.com/entities/silver-lake-resources-ltd" target="_blank" data-smartkarma-citation="entities:6529:1" rel="noopener">Silver Lake Resources (SLR AU)</a> and <a href="https://www.smartkarma.com/entities/red-5-ltd" target="_blank" data-smartkarma-citation="entities:7940:1" rel="noopener">Red 5 Ltd (RED AU)</a> will merge. SLR shareholders receive 3.434 RED shares per SLR share, implying A$1.133, a 10.4% discount to the undisturbed price. </li>
<li>The merger is strategically sensible as the combined entity should re-rate due to scale, diversification and better cash flow generation.</li>
<li>The merger terms are more favourable for RED shareholders than SLR shareholders, posing a risk for the vote. The merger may draw out rival suitors.  </li>
</ul>



Silver Lake Resources (SLR AU) and Red 5 Ltd (RED AU) will merge. SLR shareholders receive 3.434 RED shares per SLR share, implying A$1.133, a 10.4% discount to the undisturbed price. 
The merger is strategically sensible as the combined entity should re-rate due to scale, diversification and better cash flow generation.
The merger terms are more favourable for RED shareholders than SLR shareholders, posing a risk for the vote. The merger may draw out rival suitors.  


Silver Lake (SLR AU): Merger Terms Favour Red 5 (RED AU)

External broker reports(aggregated public sources), Ord Minnett

Ord Minnett

External broker reports(aggregated public sources)

Ord Minnett is a leading Australian wealth management group, incorporating full-service stockbroking, financial planning and funds management. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

Equity Bottom-Up

<ul>
<li>GMD produced a solid 2Q24 result – coming broadly in-line with our estimates despite a seismic event at Gwalia (proximal to the 1729 level).</li>
<li>Although early days since Leonora ownership (30 June 2023), early signs (~140Koz pa at ~A$2,115/oz AISC) are positive compared to recent historical production (120-130koz pa at ~A$2,521/oz).</li>
<li>We retain our Hold Recommendation on valuation grounds (1.1x P/NAV vs 0.9x peers and 9.9x EV/EBITDA vs 4.3x peers) and await the 5-year outlook (~March 2024), which should outline a more granular path towards the Company’s growth ambitions (+300koz).</li>
</ul>
Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.


GMD produced a solid 2Q24 result – coming broadly in-line with our estimates despite a seismic event at Gwalia (proximal to the 1729 level).
Although early days since Leonora ownership (30 June 2023), early signs (~140Koz pa at ~A$2,115/oz AISC) are positive compared to recent historical production (120-130koz pa at ~A$2,521/oz).
We retain our Hold Recommendation on valuation grounds (1.1x P/NAV vs 0.9x peers and 9.9x EV/EBITDA vs 4.3x peers) and await the 5-year outlook (~March 2024), which should outline a more granular path towards the Company’s growth ambitions (+300koz).

Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Genesis Minerals Limited - 2Q24: Solid – Awaiting 5-Year Outlook in March

<ul><li>We initiate coverage on Genesis (GMD), as part of an expansion of our coverage within the Gold Mining Sector, with a Hold Recommendation and A$1.70/sh Target Price.</li><li>We understand investor optimism towards GMD, given management quality/reputation, strength of balance sheet (A$160m cash, no debt) and strong organic growth pipeline (~290koz by FY28).</li><li>However, we temper this against a high valuation, where the Company trades at a significant premium to its peer cohort (1.3x P/NAV vs 1x peers and 12.4x EV/EBITDA vs 6.1x peers). </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

We initiate coverage on Genesis (GMD), as part of an expansion of our coverage within the Gold Mining Sector, with a Hold Recommendation and A$1.70/sh Target Price.We understand investor optimism towards GMD, given management quality/reputation, strength of balance sheet (A$160m cash, no debt) and strong organic growth pipeline (~290koz by FY28).However, we temper this against a high valuation, where the Company trades at a significant premium to its peer cohort (1.3x P/NAV vs 1x peers and 12.4x EV/EBITDA vs 6.1x peers). Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Genesis Minerals Limited - Initiate with Hold: Good Foundation with Organic Growth, but Fully Priced

Pan-Asia Index Rebalances/ Events/ Delta One, Periscope Analytics

Brian Freitas

Pan-Asia Index Rebalances/ Events/ Delta One

Periscope Analytics

Periscope Analytics focuses on event-driven trades across Asia Pacific and provides comprehensive, timely and systematic coverage of index changes to major Asia Pacific indices in a structured manner.

The analysis includes forecasted inclusions and exclusions to all major Asian indices that have significant amount of tracking assets, including estimates of passive buy/sell flow on the stocks. The service also provides commentary and impact of market consultations, ground rule changes, and other events (IPOs, spin-offs, M&A) that could lead to index changes and passive flow.

Periscope Analytics works with multi-strategy hedge funds, proprietary trading firms, stat arb trading groups and long-only investors that invest and trade in the Asia Pacific region with the data being used to trade index rebalances, avoid pre-positioning and passive flow, and to time entry into and exit from stocks.

Event-Driven Trades Across Asia Pacific

Index Rebalance

<ul>
<li>There are no constituent changes for the <a href="https://www.smartkarma.com/entities/vaneck-vectors-junior-gold-miners-etf" target="_blank" data-smartkarma-citation="entities:32845:1" rel="noopener">VanEck Vectors Junior Gold Miners ETF (GDXJ US)</a> in December, but there are float and capping changes for some stocks.</li>
<li>Estimated one-way turnover is 2.8% and that leads to a one-way trade of US$122m.</li>
<li>There are 13 stocks with over US$5m to trade from passive trackers, though the impact is not very big on the stocks.</li>
</ul>


There are no constituent changes for the VanEck Vectors Junior Gold Miners ETF (GDXJ US) in December, but there are float and capping changes for some stocks.
Estimated one-way turnover is 2.8% and that leads to a one-way trade of US$122m.
There are 13 stocks with over US$5m to trade from passive trackers, though the impact is not very big on the stocks.


MVIS Global Junior Gold Miners Index Rebalance: Few Large Weight Changes

Pan-Asia Catalysts/Events, Quiddity Advisors

David Blennerhassett

Pan-Asia Catalysts/Events

Quiddity Advisors

<ul>
<li>When lithium mining play <a href="https://www.smartkarma.com/entities/azure-minerals-ltd" target="_blank" data-smartkarma-citation="entities:16538:1" rel="noopener">Azure Minerals (AZS AU)</a> was halted this week "regarding a potential change of control transaction", <a href="https://www.smartkarma.com/entities/sociedad-quimica-y-minera-de-c" target="_blank" data-smartkarma-citation="entities:24555:1" rel="noopener">Sociedad Quimica y Minera (SQM/B CI)</a> was the obvious suitor.</li>
<li>This was confirmed this morning with a A$3.52/share Offer, a 44.3% premium to undisturbed, by way of a Scheme. A concurrent conditional off-market takeover at A$3.50/share is also present. </li>
<li>$3.50 is locked in, no matter what. Gina may take her stake up to 19.9%, but it won't affect the A$3.50 floor. But it may kickstart a competitive bidding situation. </li>
</ul>


When lithium mining play Azure Minerals (AZS AU) was halted this week "regarding a potential change of control transaction", Sociedad Quimica y Minera (SQM/B CI) was the obvious suitor.
This was confirmed this morning with a A$3.52/share Offer, a 44.3% premium to undisturbed, by way of a Scheme. A concurrent conditional off-market takeover at A$3.50/share is also present. 
$3.50 is locked in, no matter what. Gina may take her stake up to 19.9%, but it won't affect the A$3.50 floor. But it may kickstart a competitive bidding situation. 


Gina Can't "Liontown" SQM's Bid For Azure

Australia

Genesis Minerals Limited is an Australian-based mineral exploration company. The Company acquires commercially significant mineral deposits that can be brought into production.

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Genesis Minerals (GMD AU)

Silver Lake (SLR AU): Merger Terms Favour Red 5 (RED AU)

The merger terms are more favourable for RED shareholders than SLR shareholders, posing a risk for the vote. The merger may draw out rival suitors.

Arun George

Genesis Minerals Limited - 2Q24: Solid – Awaiting 5-Year Outlook in March

GMD produced a solid 2Q24 result – coming broadly in-line with our estimates despite a seismic event at Gwalia (proximal to the 1729 level).

Ord Minnett

Genesis Minerals Limited - Initiate with Hold: Good Foundation with Organic Growth, but Fully Priced

We initiate coverage on Genesis (GMD), as part of an expansion of our coverage within the Gold Mining Sector, with a Hold Recommendation and A$1.70...

Ord Minnett

MVIS Global Junior Gold Miners Index Rebalance: Few Large Weight Changes

There are no constituent changes for the stocks, but there are a lot of float changes and capping changes. Estimated one-way turnover is 2.8% and...

Brian Freitas

Gina Can't "Liontown" SQM's Bid For Azure

The two-pronged approach sets a clean floor going forward at a minimum A$3.50/share. Trading tight at A$3.49/share. If you think this transaction...

David Blennerhassett

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