Australia

• Rio Tinto Ltd (RIO AU) shareholders will vote on Palliser’s AGM resolution to conduct an independent review on whether the potential unification is in the best interests of shareholders. 
• Palliser and the Board’s arguments for and against unification focus on five factors: tax costs, post-unification share price, lack of scrip M&A, wastage of franking credits, and shareholder support.
• A Grant Thornton report supports unification. The board’s case is strong primarily on tax costs, while Palliser’s case is strong on post-unification share price, M&A, and franking credits.

Alkane’s Q225 quarterly activities report demonstrated production of 14,852oz Au via the processing of 269kt ore (cf guidance of 260–290kt) at a head grade of 2.25g/t (2.1–2.3g/t) and 84.2% metallurgical recovery (82–87%). While production was 2,148oz below target, 1,700oz of this could be attributed to an increase in gold-in-circuit as a result of reduced elution stripping over the Christmas period and was, to a large extent, offset by a 1,724oz over-sale of gold relative to production (ie gold sales of 16,576oz closely approximated what production would have been in the absence of the gold-in-circuit inventory effect). With the gold price remaining high and the Australian dollar notably weak against the US dollar, in the aftermath of its Q225 operational results, we have increased our Alkane basic adjusted EPS estimate by 43.7% since the time of our last note and our valuation by a similar order of magnitude. In the meantime, ongoing exploration drilling (eg 5.03g/t over 2m, see announcement of 21 January) suggests potential new mineable extensions to existing underground operations.

Canyon Resources has announced that Camalco, its wholly owned in-country subsidiary, has entered into two agreements to acquire a 9.1% combined interest in Camrail, Cameroon’s rail operator. The transaction was approved by Camrail’s board and will see the company paying A$3.4m in cash for the stake. Canyon will nominate one director to Camrail’s board. This is a strategic investment that will allow the company to exercise more control over the rail infrastructure upgrade in Cameroon required to bring the Minim Martap bauxite project into production, therefore further de-risking the project.

Canyon Resources is an ASX-listed bauxite developer advancing its 100%-owned Minim Martap project in Cameroon. Minim Martap is a large-scale, high-grade, direct shipping ore bauxite deposit with a clear path to production. Having secured a mining licence and a significant portion of project funding, Canyon is gearing towards the initial production start in 2026, with subsequent ramp-up to full capacity once infrastructure upgrades are completed. This should allow it to capitalise on the favourable bauxite market fundamentals driven by strong underlying aluminium demand and supply constraints. We value Minim Martap at US$566m (A$877m) and see additional upside from the project’s large resource base.

Freelancer reported FY24 results that confirmed that the core Freelancer marketplace saw improved customer acquisition and retention in Q424, providing positive momentum going into FY25. With a streamlined cost base and a focus on using AI to deliver a wider range of quality services at a lower cost, management is targeting double-digit revenue growth and sustainable profitability in FY25. We have revised up our FY25 forecasts to reflect the better performance in Q424.

Recce has reported positive results from its open-label Phase II study assessing RECCE® 327 topical gel (R327G) in patients with acute bacterial skin and skin structure infections (ABSSSI), including patients with diabetic foot infections (DFIs). In 29 evaluable patients, the company reported a 93% primary efficacy endpoint with R327G treatment over 14 days. In our view, these results bode well for the company’s Phase III registrational study in Indonesia assessing R327G as a treatment for DFIs. We expect patient dosing and recruitment to start imminently given the late CY24 approval for the study to commence from the Indonesian Drug and Food Regulatory Authority, Badan POM. If the results are positive, Recce could potentially launch R327G in South-East Asia in H2 CY26, marking the company’s transition to commercial stage.

Actinogen Medical continues to make progress with its 36-week XanaMIA Phase IIb/III study assessing Xanamem in patients with biomarker-positive mild-to-moderate Alzheimer’s disease (AD). The company recently announced it has randomised and treated 40 patients (out of the 220 target). Actinogen now expects to report interim (24-week) results from the first 100 patients in Q4 CY25 (vs Q3 CY25 previously), which could be a material catalyst and support licensing and/or value realisation opportunities. Full study results are guided for H2 CY26. Our risk-adjusted net present value is A$673.8m (vs A$619.8m previously).

SenSen’s financial performance and commercial progress in H1 indicate that the business is well-placed to deliver scalable, cash-generative growth. Financially, the company has delivered three consecutive quarters of positive cash generation and moved to a net cash position. Significant H1 wins with Calgary and Montreal provide good visibility of an acceleration in growth and a move to profitability in H2. A healthy pipeline, progress with channel partners and scope for upselling into the enlarged customer base support prospects for a continuation of operationally geared growth beyond this.

• Palliser Capital, which reportedly holds ~$300mn in Rio Tinto Ltd (RIO AU/LN) shares across its dual-head structure, has campaigned for near-on a year to unify the primary listing in Australia.
• Palliser’s reasonings (and others) to unify make sense, such as access to stock-based mergers and eliminating franking wastage. A recent independent assessment from Grant Thornton is also supportive of unification.
• Shareholders will vote on the resolution on 3rd April  for UK-listed shares and 1st May for Australian-listed shares. The UK line holds the key to the vote outcome.

• At the upcoming AGM, Rio Tinto Ltd and Rio Tinto PLC shareholders will vote on the company commencing a review on the benefits vs costs of Unification.
• Palliser Capital has been pushing for Unification while the Rio Tinto Board has recommended that shareholders vote against Resolution 21/24 citing tax costs among other reasons.
• If the Unification completes, S&P/ASX trackers will need to buy Rio Tinto Ltd (RIO AU) while UKX Index (UKX INDEX) trackers will sell Rio Tinto PLC (RIO LN). Net positive.

• Back on the 11th November 2024, Silk Logistics (SLH AU) entered into an Offer by way of a Scheme with Dubai-based DP World, Australia’s biggest ports operator.
• DP World offered A$2.14/share (less any dividends), a 45.6% premium to last close. The Offer has the backing of Silk’s board, and co-founders (holding ~46% of the shares out).
• This looked all stitched up. Potentially a delay for ACCC/FIRB, but it felt like one that should get approved. But the ACCC has now detailed a comprehensive list of concerns.

• Taking advantage of a doubling in its share price over the last year, Austal is tapping the market to fund the expansion of its US facilities to fulfil US Navy contracts.
• Austal is placing out 52.6mn new shares (non-underwritten) at A$3.80/share – ~A$200mn all-in – a 15.6% discount to last close, and effectively tapping out its annual placement capacity.
• Provided the placement is squared away, founder John Rothwell will unload $50mn of his own stock. As such, any M&A activity is now firmly on the backburner. 

• The De Grey Mining (DEG AU) IE considers Northern Star Resources (NST AU)’s offer fair and reasonable. The offer is 0.119 NST shares per DEG share.
• The key condition is DEG shareholder approval. Due to the lack of a competing bid, Gold Road Resources (GOR AU), which holds a potentially blocking stake, should support it.
• The offer is attractive compared to historical trading ranges. At the last close and for a 5 May payment, the gross/annualised spread is 2.4%/18.2%.

• Back on the 2nd Dec 2024, De Grey Mining (DEG AU), which boasts one of Australia’s largest undeveloped gold projects, announced a merger with Northern Star Resources (NST AU).
• Northern Star offered 0.119 new shares for every De Grey share, and will hold ~80.1% of the combined entity upon a successful Scheme, with De Grey shareholders the remaining ~19.9%.
• The Scheme Booklet is now out, with a Scheme Meeting on the 16th April. Expected implementation on the 5th May. The IE (KPMG) says fair & reasonable.

• Austal Ltd (ASB AU)  is looking to raise US$157m, with US$125m from a primary placement and the remainder, a secondary placement contingent on the primary being fully subscribed.
• The deal will be a large one to digest at 58 days of the stock’s three month ADV, representing 15.3% of its shares outstanding.
• In this note, we will talk about the placement and run the deal through our ECM framework.

• Iron ore majors guide flattish growth for 2025, while China continues to have strong iron ore imports (4.2% YoY for CY24), despite weak steel production (-1.1% YoY). 
• Significant capacity growth commences in CY26 with the ramp-up of Rio Tinto Ltd (RIO AU)’s Simandou project, equivalent to 6% of global seaborne trade ~100 million tons.  
• We believe the iron ore price will be rangebound until 2026 (between 100-120 USD/ton), after which it is highly probable that it will decline to 80-90 USD/ton.

• Iron ore futures declined by USD 1.75/ton last week, closing at USD 100.45/ton on March 7, trading within a narrower USD 3.90/ton range.
• Technical indicators confirm bearish momentum, with a death cross, MACD signaling weakness, and RSI nearing oversold conditions at 36.61.
• Market sentiment remains fragile due to China’s steel production cuts, declining imports, and escalating U.S.-China trade tensions, despite potential stimulus measures.

• The WTR Sustainable Index was down 1.2% W/W versus the S&P 500 Index (down 3.1%), the Russell 2000 Index (down 4.0%), and the Nasdaq Index (down 3.3%).
• Energy Technology (12.8% of the index) was down 1.6%, while Industrial Climate and Ag Technology (46.2% of the index) was down 0.6%, ClimateTech Mining was down 0.2%, and Advanced Transportation Solutions (21.7% of the index) was down 4.0%.
• Top 10 Performers: LCFS, ALTA, ALLIF, LBNK, GIP, TGEN, PEGY, SX, LICY, HCNWF

• On 7 March, Insignia Financial (IFL AU) disclosed a revised non-binding privatisation offer from Bain and CC Capital at A$5.00, an 8.7% premium to their previous A$4.60 offer.
• The exclusive due diligence period ends on 17 April (six weeks from signing the exclusivity deed). The Board will recommend a binding offer of at least A$5.00. 
• The offer is attractive compared to historical trading ranges, peer multiples and precedent transactions. Therefore, a binding offer would gain shareholder support.

• The S&P/ASX 200 (AS51 INDEX) has suffered a continuous sell-off for the past 3 weeks. The index is deeply oversold, our model predicts an imminent reversal.
• The reversal could lift the index to the 8091-8208 price area, but the index may start to fall again after that.
• As posted by Brian Freitas there has been 7 changes for the S&P/ASX 200 (index rebalance), read his insight for further details on this.

• There are 2 changes for the S&P/ASX50 Index, 2 changes for the S&P/ASX100 Index, 7 changes for the S&P/ASX200 Index and 11 adds/ 7 deletes for the S&P/ASX300 Index.
• There is a huge increase in the number of index shares for Sigma Healthcare (SIG AU), triggering passive buying of nearly A$1.4bn at the close on 21 March.
• The adds have outperformed the deletes across all indices. Positioning varies across stocks and there could be some big movers over the next few days.

• The ADDs/DELs for the ASX index family for the March 2025 index rebal event were announced after market close on Friday 7th March 2025.
• There are 22 ADDs and 18 DELs collectively for ASX 50, ASX 100, ASX 200, and ASX 300.
• In this insight, we take a final look at the flow expectations for each of these index changes.

• BHP stock affected by fat finger incident causing rapid drop in share price
• Ex dividend date for BHP, investors may miss out on dividend payment if purchased on or after ex dividend date
• Order for 750,000 BHP shares at higher price causes market disruption, shows impact of large trades on stock price fluctuations.

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• Cochlear Ltd (COH AU) now expects FY25 underlying net profit to be at the lower end of A$410–430M guidance range due to lower services revenue and higher cloud-related investment.
• Despite 5% growth in H1FY25, Cochlear reiterated that “solid market growth rates to drive cochlear implant unit growth of around 10% in FY25.”
• Cochlear is expected to release next-generation cochlear implant in mid-2025. The introduction of the new off-the-ear Nucleus Kanso 3 sound processor is expected to contribute to services revenue from FY26.

• Bain Capital and CC Capital have both bumped indicative terms to $5/share,  a 63% premium to Insignia Financial (IFL AU)’s undisturbed closing share price of $3.06 on December 11 2024.
• Both suitors have been granted four weeks of exclusivity. Confirmatory due diligence is expected to be completed within six weeks. IFL’s board is supportive at A$5/share or more. 
• Where’s Brookfield on all this? A local media source previously reported that at least one suitor was losing interest. 

• Fluence Corporation (ASX:FLC) specialises in the delivery of water and wastewater solutions in industrial, municipal and commercial industries across the globe.
• The company has released its FY24 full year result which is in line with previously amended guidance.
• The Q4 cashflow statement and a Q4 financial and operating update was released in January 2025 and included significant detail and guidance for FY25.

• Neuren Pharmaceuticals (NEU AU) received A$56M U.S. royalty income from Daybue in 2024 up 110% from A$27M in 2023. Cumulative income from Daybue reached to A$445M over 2023 and 2024. 
• Assuming Daybue U.S. sales guidance is met and an exchange rate of 0.65, Neuren anticipates earning U.S. royalties of A$62–67M, up 15% YoY at mid-point in 2025.
• Daybue will be launched in Canada in 3Q25. European approval is expected in 1Q26. For Japan, Acadia plans to initiate small clinical study by 3Q25 to support a marketing application.

• Cash Converters International (ASX:CCV) is a consumer finance company operating as a service provider, owner and franchisor of second-hand goods and financial services stores in Australia and internationally.
• CCV has released a strong H1 25 result, delivering operating EBITDA growth of 12% over the previous corresponding period (pcp) to $36.5m (directly in-line with the RaaS forecast of $36.5m but with some changes in mix) and operating NPAT growth of 24% to $12.2m (a strong 8.9% beat over the RaaS forecast of $11.1m driven largely by reduced interest expense on lower-than-forecast debt balance and mix change).
• The result clearly illustrates the impact of the changed strategy of the business with the loan book transitioning away from legacy products and into medium-sized loans and the new line-of-credit (LoC) product.

• Iron ore futures fell 6% last week, closing at USD 102.00/ton on Feb 28, below key support levels, with bearish momentum confirmed by technical indicators.
• Global trade tariffs pressured sentiment, as U.S., Vietnam, and South Korea imposed levies on Chinese steel, impacting an estimated USD 7 billion market and dampening demand.
• China’s Two Sessions could drive volatility, with historical patterns showing pre-meeting gains followed by post-policy declines, potentially influencing iron ore price recovery.

• Verbrec Limited (ASX:VBC) provides engineering, asset management, infrastructure services and training to the energy, mining, infrastructure and defence industries in Australia, New Zealand, PNG and the Pacific Islands.
• The company has released its H1 FY25 results delivering a profitable outcome for the third consecutive period, albeit below RaaS forecasts predominantly due to macro headwinds resulting in lower-than-forecast revenue on the back of project delays.
• Management cited that client feedback suggests “inflationary pressures, uncertainty prior to election results (both international and domestic) and shortage of qualified engineering resources caused deferrals of several notable prospective project opportunities that were expected to commence in H1 FY2025”.

• On 26 February, PointsBet Holdings (PBH AU) entered a scheme implementation deed with Mixi Inc (2121 JP) at A$1.06, a 27.7% premium to the undisturbed price of A$0.83 (25 February).
• Subsequently, BlueBet Holdings (BBT AU) disclosed a competing non-binding cash-and-scrip offer worth a combined equity value of A$340-360 million or A$1.02-1.09 per PBT share.  
• BlueBet has limited headroom to engage in a bidding war, particularly as its share price weakens. The share price already factors in a potential bump from Mixi. 

• Discounts to NAV of covered holdcos didn’t follow a clear trend during February 2025. Discounts to NAV: C.F.Alba, 14.1% (vs. 12.9% as of 31 January 2025); GBL, 38.7% (vs. 40%);
• Heineken Holding, 13% (vs. 13.2%); Industrivärden C, 5.1% (vs. 3.0%); Investor B, 2.3% (vs. 4.5%); Porsche Automobile Holding, 38.1% (vs. 36%). Rio DLC spread tightened to 17% (vs. 20.3%).
• What seems interesting (unchanged views): Porsche SE vs. listed assets and the Rio DLC (long RIO LN/short RIO AU).