In today’s briefing:
- MV Australia Resources Index Rebalance: Two Adds, Float & Capping Changes
- MV Global Rare Earth/Strategic Metals Index Rebalance: One Add, One Delete & Other Changes
- [Quiddity Index] MV Junior Gold Miners Jun25 Rebalance Results: Flow Expectations
- Newmont Corporation (NYSE: NEM) – Strong Q1, Tier 1 Growth Ahead, Significant Upside if Gold Holds
- Harmony Gold (HAR SJ / HMY US): Strong Results, Copper Diversification, Attractive Valuation
- Ovintiv Inc.: An Enhanced Well Performance & Technological Integration in Montney Are Critical Growth Levers!
MV Australia Resources Index Rebalance: Two Adds, Float & Capping Changes
- Capricorn Metals (CMM AU) and Genesis Minerals (GMD AU) will be added to the Vaneck Vectors Australian Re (MVR AU) in June.
- Constituent changes, float changes and capping changes result in an estimated one-way turnover of 8% and a round-trip trade of A$49m.
- There has been short covering in both adds over the last couple of years. While short interest is relatively smaller in Capricorn Metals, it is much higher in Genesis Minerals.
MV Global Rare Earth/Strategic Metals Index Rebalance: One Add, One Delete & Other Changes
- IperionX Limited (IPX AU) will be added to the VanEck Rare Earth/Strategic Me (REMX US) and Patriot Battery Metals (PMT CN) will be deleted.
- The constituent changes, float changes and capping changes result in an estimated one-way turnover of 6.3% and in a round-trip trade of US$48m.
- The largest inflows will be in IperionX, Iluka Resources and Albemarle, while the largest outflows will be from Patriot Battery Metals, AMG Critical Materials, Shenghe Resources and Lithium Americas.
[Quiddity Index] MV Junior Gold Miners Jun25 Rebalance Results: Flow Expectations
- The MV Global J-Gold Miners index represents the performance small-cap gold and silver mining companies listed around the world.
- There will be no index changes for the June 2025 rebal event.
- We expect one-way flow of US$271mm for the June 2025 rebal, which is a bit lower than normal for a June rebal.
Newmont Corporation (NYSE: NEM) – Strong Q1, Tier 1 Growth Ahead, Significant Upside if Gold Holds
- Recent Results: Newmont delivered a strong Q1 2025 performance with record free cash flow of $1.2 billion, driven by higher gold prices and increased production from Tier 1 assets.
- Future Plans: The company plans to ramp up Tier 1 output to ~6.7 Moz by 2028, led by projects like Ahafo North, Tanami Expansion 2, and Cadia block-cave development.
- Valuation Upside: If current gold prices around $3,400/oz persist, Newmont’s earnings could double vs. consensus, unlocking over 50% potential upside from current share levels.
Harmony Gold (HAR SJ / HMY US): Strong Results, Copper Diversification, Attractive Valuation
- Harmony Gold delivered strong earnings and margin expansion, driven by higher gold prices and improved grades across key underground assets.
- The company is expanding into copper via CSA Mine and Eva, aiming to diversify production and enhance long-term cash flows.
- Valuations remain attractive, though risks include commodity price volatility, South African exposure, and integration of new international assets.
Ovintiv Inc.: An Enhanced Well Performance & Technological Integration in Montney Are Critical Growth Levers!
- Ovintiv’s recent earnings for the first quarter of 2025 presented a landscape of both strengths and challenges facing the company.
- The macroeconomic backdrop, characterized by lower oil prices, has impacted expectations significantly.
- The company had initially projected about $2.1 billion in free cash flow for the year at $70 WTI and $4 NYMEX gas prices, but has now revised that to $1.5 billion with a more conservative $60 WTI for the remainder of the year.
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