Daily Brief Australia: Rio Tinto Ltd, Alkane Resources, Canyon Resources, Freelancer Ltd, Recce Ltd, Actinogen Medical, SenSen Networks and more

• 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.