Daily Brief Energy/Materials: Newcrest Mining, JSW Steel Ltd, Wheaton Precious Metals , Nanoco Group PLC and more

• Newcrest Mining (NCM AU) saw its shareholder meeting vote through the Scheme, then on teh 18th, the Special Div went ex-. 
• Since then, as gold has rebounded sharply, Newmont Mining (NEM US) has underperformed peers and juniors (VanEck Gold Miners ETF/USA (GDX US)) since gold has spiked.
• Thursday is the last day of trading and there is a LOT of NEM to trade.

JSW Steel has delivered strong Q2/23-24 results in our view, driven by higher volumes and a recovery in steel prices. The numbers were in line with management’s earlier guidance for an improvement in operating environment and steel prices. The financial risk profile is improving, and liquidity is adequate.

Steel prices remained the key credit driver. A small price increase has resulted in a significant EBITDA increment, due to the high operating leverage. Based on management’s guidance for an improvement in the operating environment and steel prices, we expect better H2/23-24 numbers, with revenues inching up and a larger earnings improvement. Debt will likely remain stable following the merger with JISPL (completed in Q2), and the leverage profile should continue improving on the back of higher earnings.

Wheaton Precious Metals’ (WPM’s) Q323 results are scheduled for 9 November. This note adjusts our forecasts – principally for Q3 – for metals prices ( 0.3% simple average for the quarter since our last note), Penasquito (returning to production from mid October, rather than end August), a new life of mine production profile at Constancia (in the aftermath of a site visit in late September) and production at Salobo, Sudbury and Voisey’s Bay (in the aftermath of Vale’s production and sales report on 17 October). We have also re-phased capital payments for Salobo III from FY23 to FY24 and FY25.

FY23 was a turbulent but ultimately pivotal year for Nanoco. The US$150m Samsung settlement (US$90m net costs) will fund the planned £33–40m return to shareholders with the retained c £20m providing good support to make the transition from development to commercial production. The company’s first commercial order is expected this calendar year. While volumes are expected to be relatively modest, this is a key milestone, and successful delivery should ease the pathway to follow-on orders and new customers. The partnership with an Asian chemicals company provides a second channel into the sensing market, while management also expects to add a third development partner potentially focusing on the display market over the course of FY24. In the longer term, pursuing other potential IP infringers could open other commercial opportunities, royalties or compensation payments.