Base Metals Archives - Page 23 of 97

LONDON, May 28, 2024–(BUSINESS WIRE)–

FORM 8.3

PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY

A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE

Rule 8.3 of the Takeover Code (the "Code")

1. KEY INFORMATION

(a) Full name of discloser:	Elliott Investment Management, L.P
(b) Owner or controller of interests and short positions disclosed, if different from 1(a): The naming of nominee or vehicle companies is insufficient. For a trust, the trustee(s), settlor and beneficiaries must be named.	Elliott International, L.P. Elliott Associates, L.P The Liverpool Limited Partnership
(c) Name of offeror/offeree in relation to whose relevant securities this form relates: Use a separate form for each offeror/offeree	Anglo American Plc
(d) If an exempt fund manager connected with an offeror/offeree, state this and specify identity of offeror/offeree:
(e) Date position held/dealing undertaken: For an opening position disclosure, state the latest practicable date prior to the disclosure	24th May 2024
(f) In addition to the company in 1(c) above, is the discloser making disclosures in respect of any other party to the offer? If it is a cash offer or possible cash offer, state "N/A"	BHP Group Limited

2. POSITIONS OF THE PERSON MAKING THE DISCLOSURE

If there are positions or rights to subscribe to disclose in more than one class of relevant securities of the offeror or offeree named in 1(c), copy table 2(a) or (b) (as appropriate) for each additional class of relevant security.

(a) Interests and short positions in the relevant securities of the offeror or offeree to which the disclosure relates following the dealing (if any)

Class of relevant security:	Ordinary
	Interests		Short positions
	Number	%	Number	%
(1) Relevant securities owned and/or controlled:
(2) Cash-settled derivatives:	46,164,443	3.4514%
(3) Stock-settled derivatives (including options) and agreements to purchase/sell:
TOTAL:	46,164,443	3.4514%

All interests and all short positions should be disclosed.

Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).

(b) Rights to subscribe for new securities (including directors’ and other employee options)

Class of relevant security in relation to which subscription right exists:
Details, including nature of the rights concerned and relevant percentages:

3. DEALINGS (IF ANY) BY THE PERSON MAKING THE DISCLOSURE

Where there have been dealings in more than one class of relevant securities of the offeror or offeree named in 1(c), copy table 3(a), (b), (c) or (d) (as appropriate) for each additional class of relevant security dealt in.

The currency of all prices and other monetary amounts should be stated.

(a) Purchases and sales

Class of relevant security	Purchase/sale	Number of securities	Price per unit

(b) Cash-settled derivative transactions

Class of relevant security	Product description e.g. CFD	Nature of dealing e.g. opening/closing a long/short position, increasing/reducing a long/short position	Number of reference securities	Price per unit
Ordinary	Equity swap	Increasing a long position	100,000	£26.4557

(i) Writing, selling, purchasing or varying

Class of relevant security

Product description e.g. call option

Writing, purchasing, selling, varying etc.

Number of securities to which option relates

Exercise price per unit

Type

e.g. American, European etc.

Expiry date

Option money paid/ received per unit

(ii) Exercise

Class of relevant security

Product description

e.g. call option

Exercising/ exercised against

Number of securities

Exercise price per unit

(d) Other dealings (including subscribing for new securities)

Class of relevant security

Nature of dealing

e.g. subscription, conversion

Details

Price per unit (if applicable)

4. OTHER INFORMATION

(a) Indemnity and other dealing arrangements

Details of any indemnity or option arrangement, or any agreement or understanding, formal or informal, relating to relevant securities which may be an inducement to deal or refrain from dealing entered into by the person making the disclosure and any party to the offer or any person acting in concert with a party to the offer:

Irrevocable commitments and letters of intent should not be included. If there are no such agreements, arrangements or understandings, state "none"

None

(b) Agreements, arrangements or understandings relating to options or derivatives

Details of any agreement, arrangement or understanding, formal or informal, between the person making the disclosure and any other person relating to:

(i) the voting rights of any relevant securities under any option; or

(ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:

If there are no such agreements, arrangements or understandings, state "none"

None

Is a Supplemental Form 8 (Open Positions) attached?

Date of disclosure:	28th May 2024
Contact name:	Michael Cross
Telephone number:	0203 009 1306

Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.

The Panel’s Market Surveillance Unit is available for consultation in relation to the Code’s disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel’s website at www.thetakeoverpanel.org.uk.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240528223480/en/

Contacts

Elliott Advisors (UK) Limited

(Bloomberg) — A successful takeover of Anglo American Plc under the arrangements BHP Group has offered could lead to outflows of $4.3 billion from South Africa, according to a JPMorgan Chase & Co. analysis.

Most Read from Bloomberg

Such an outflow, if a deal goes ahead, could weaken the rand, which has gained 4.4% against the dollar, the most of 16 major currencies tracked by Bloomberg, over the last five weeks.

The deal, proposed by BHP and rejected by Anglo, would involve Anglo distributing its holdings in its South African iron ore and platinum units to shareholders. That, according to JPMorgan’s South African mining analyst Catherine Cunningham, would lead to developed-market investor index funds selling the unbundled stocks, resulting in the outflow.

While Anglo has spurned BHP’s $49 billion bid, it has agreed to talk to the company, which must now make a firm offer by May 29. A successful deal could also affect the share prices of the units, Anglo American Platinum Ltd. and Kumba Iron Ore Ltd., Cunningham said.

“There is now a materially higher probability that BHP will reach an agreed deal,”she wrote in the May 23 note to clients. “We see downside risk to the share prices of both Amplats and Kumba.”

Cunningham didn’t assess the potential impact on the rand.

According to her analysis, developed-market funds would sell $9.4 billion in stock and $5.1 billion would be bought by emerging-market investors, resulting in the net outflow. JPMorgan estimated the index fund holdings in Anglo American based on publicly available data.

“Locals will not sell anything, developed market index funds will sell every share they receive and DM active and others will sell 90% of what they receive,” Cunningham estimated. “EM active funds will buy 50% of what’s for sale.”

Amplats, which has a market value of 192 billion rand ($10.5 billion), is nearly 80% owned by Anglo American. Kumba, which has a capitalization of 170 billion rand, is almost 70% held by Anglo American.

Developed-market index funds would need to sell their shares as Johannesburg-listed stocks wouldn’t fit their investment mandate. Active investors are likely to want to limit their exposure to single-commodity and -country stocks. Kumba’s mines are all in South Africa while Anglo Platinum has one small operation in Zimbabwe, with the rest in South Africa.

Spinning off the companies would also add $14.2 billion to the market capitalization of the MSCI South Africa index, or about 6%, Cunningham wrote.

In response to BHP’s approach Anglo rushed out its own plan to streamline its business. That would include spinning off Anglo Platinum while retaining control of Kumba.

(Updates with Anglo American’s own plans in last paragraph)

Most Read from Bloomberg Businessweek

There may be more pots of gold at the end of this market's rainbow.

The commodity frenzy took a breather last week as cooling demand from China and hawkish Fed commentary prompted investors to cash in on the recent surge in prices.

But despite recent declines, Wall Street pros remain focused on the long-term story in commodities, telling Yahoo Finance that the fundamentals are still strong and they’re confident the record-setting rally will resume.

“There’s reason to believe the 'Great Reflation trade' has more room to run,” Jonathan Krinsky, BTIG's chief market technician, told Yahoo Finance.

Krinsky pointed to the recent outperformance of silver relative to gold as an indication of a “strong, healthy, precious metal bull market.” He remains bullish and thinks gold has yet to reach its final high, noting, “There's nothing in the price chart of gold that suggests a final top is in.”

So far this year, gold futures have jumped 12%, compared with silver's 27% gain.

And copper, which has outperformed both silver and gold in 2024, pushed above $11,000 a ton for the first time ever last week. The metal has caught fire with investors amid bets it will play a pivotal role in the transition to renewables and EVs, along with data center buildouts due to AI.

“What you really have is a commodity supercycle that started four years ago … and you probably have another six to 10 years left of really strong performance,” Wells Fargo head of real asset strategy John LaForge said.

That bullish sentiment appears to be gaining traction on Wall Street.

Bank of America’s head of metals research, Michael Widmer, told Yahoo Finance that copper looks “very strong” on a fundamental basis and investors should use any consolidation as a buying opportunity.

“I think the structural bull case for the copper market remains in place," Widmer said. "This is firmly a buy-the-dip market."

Widmer and his team see copper prices rallying more than 25% from current levels in 2025 to reach an average of $12,000 per ton.

For investors looking to jump in and play the bullish calls on metals, Bank of America named Antofagasta (ANTO.L), Freeport-McMoRan (FCX), and Teck Resources (TECK) among its top copper picks, alongside Franco Nevada (FNV) and Wheaton Precious (WPM) as its recommended ways to play gold.

Economic growth in the US also remains supportive to commodities demand. Deutsche Bank chief US economist Matthew Luzzetti shared his economic outlook on the latest episode of the Opening Bid podcast. Listen in below.

Seana Smith is an anchor at Yahoo Finance. Follow Smith on Twitter @SeanaNSmith. Tips on deals, mergers, activist situations, or anything else? Email seanasmith@yahooinc.com.

Click here for in-depth analysis of the latest stock market news and events moving stock prices.

Read the latest financial and business news from Yahoo Finance

Written by Brian Paradza, CFA at The Motley Fool Canada

Canadian materials sector stocks are rising in 2024. The S&P/TSX Composite Index Metals & Mining (Industry) Index is up 21.8% year to date as the TSX materials sector significantly outperformed the TSX Composite’s 5.9% gain so far this year. Investors looking for the best materials stocks to buy could gain exposure through a sector index exchange-traded fund (ETF), or take a closer look into greening stocks like Teck Resources (TSX:TECK.B) or an undervalued copper miner Ero Copper (TSX:ERO) today.

Why are Canadian materials sector stocks rising?

Canadian materials sector stocks have risen in 2024 as gold prices – which reached record highs – and copper prices soared, and the commodities market remained resilient. Global demand for materials like copper and aluminum has risen with sustained construction growth and firm copper demand in electrification projects. Industries and governments are investing heavily in copper-hungry green energy solutions.

Rumours of potential copper shortages are spreading through markets, sending copper futures 22.6% high year to date. Gold is up 13.3% and aluminum prices have clocked double-digit gains so far this year, and producers (materials and mining stocks) may benefit from revenue growth and earnings margin expansions this year.

Best materials stocks to buy: The iShares S&P/TSX Capped Materials Index ETF

Investors with limited time to research individual stocks to buy to gain exposure to the Canadian materials sector could simply buy a materials index ETF and gain diversified broad sector exposure in one go.

The iShares S&P/TSX Capped Materials Index ETF (TSX:XMA) has gained 19.8% so far this year. The low-cost ETF tracks the performance of the S&P/TSX Capped Materials Index, a diversified gauge of the materials sector stocks within the TSX Composite Index. Investors could use the ETF to express their bullish views on the materials sector, without concentrating their capital on a few tickers. The ETF offers diversification benefits across 50 portfolio holdings in a single investment.

Managed by Blackrock (NYSE:BLK), one of the largest ETF fund managers globally, the XMA ETF’s $172 million portfolio provides 55.5% exposure to gold stocks, 12.7% exposure to diversified metals and mining stocks, and 10.3% exposure to fertilizers and agricultural chemicals producers while copper stocks and silver stocks comprise 8% and 4.4% of the portfolio’s weights. The portfolio’s biggest holdings include Agnico Eagle Mines comprising 11.7% of the portfolio, Barrick Gold (10.4%), Nutrien (10.3%), Wheaton Precious Metals (8.8%), Franco Nevada Corp (8.2%), and Teck Resources stock at 8.1%.

The low-cost materials sector index ETF offers cheap exposure to a professionally managed portfolio. It has a management expense ratio (MER) of 0.61%, meaning investors will pay as little as $6.10 per year in management fees and expenses for every $1,000 invested in the ETF.

That said, the materials sector is broad and highly volatile. Stock investors with more refined opinions may wish to avoid expected poor performers in an attempt to outperform the materials index.

Teck Resources stock: Going green with a copper upside

Teck Resources stock has gained 25% in value year to date and more than doubled during the past three years with a 163% return. The company recently disposed of oils ands assets, and its planned disposal of metallurgical coal assets provides ample liquidity to invest in copper assets and repurchase stock.

Copper and zinc are the company’s future revenue and earnings drivers. Copper production increased 74% year over year last quarter and zinc concentrate production was up 10% during the first quarter of 2024. Teck Resources has pivoted away from metallurgical coal to green its operations and could gain some ESG valuation points.

Ero Copper: An organic growth-focused materials sector stock to hold

Ero Copper is a $3.2 billion base metals producer with copper mining assets in Brazil. The miner sells gold and silver as bi-products. ERO stock has gained 48.4% in value so far this year, and could rise some more as plans to earn a 60% interest in Vale Base Metals’ Furnas copper project come to fruition. The plan could double its copper production.

Bay Street analysts project potential 51% sales growth for Ero Copper over the next year. The company maintains a strong balance sheet. It focuses on organically funded growth, which minimizes shareholder dilution.

Ero Copper stock appears too cheap to ignore with a forward price-to-earnings multiple of 6.6 in an industry with an average PE of 107. A forward price-earnings-to-growth (PEG) ratio of 0.2 implies ERO stock is grossly undervalued given its potential earnings growth potential over the long term.

The post Best Stocks to Buy in May 2024: TSX Materials Sector appeared first on The Motley Fool Canada.

Should you invest $1,000 in Ero Copper Corp. right now?

Before you buy stock in Ero Copper Corp., consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ero Copper Corp. wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $18,271.97!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 32 percentage points since 2013*.

See the 10 stocks * Returns as of 5/21/24

Most Read from Bloomberg

BHP has one week to convince its target of the value of its $49 billion acquisition plan, after Anglo announced on Wednesday it had rebuffed a third bid and agreed to extend a regulatory deadline. With the clock reset, discussions will center around BHP’s insistence that Anglo spin off majority stakes in South African platinum and iron ore units before the takeover can proceed.

The two sides are now closer to each other in their views on a valuation for a deal, Bloomberg reported late Wednesday. However, Anglo continues to dismiss the structure as too complicated – laden with risks and costs to be borne by its own investors, who will receive the offloaded shares in the subsidiaries under BHP’s plan.

That was a view echoed by several major investors in private conversations since the latest announcements. Five top-20 Anglo shareholders said they were open to the prospect of a deal, while four of those agreed with Anglo’s approach to press BHP for changes to resolve uncertainty created by the proposed multi-phase approach.

Most of the shareholders said they would want BHP to further increase its offer, particularly if the structure were to remain unchanged. Under BHP’s current plan, Anglo’s investors would need to wait for the South African spinoffs to be completed — which some estimated could take up to two years — before they would realize the value of the bid.

Anglo’s main reservation about BHP’s current approach is the uncertainty over concessions that may be demanded by South African regulators in order to approve the demergers of Johannesburg-listed Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. The country is home to some of Anglo’s biggest operations and the firm has deep ties there that date back to its founding more than a century ago.

South Africa’s Competition Tribunal assesses both antitrust impacts as well as “public interest” factors, including how a change of ownership will affect employment levels and historically disadvantaged people — making it extremely difficult to estimate the eventual cost to the companies. Previous approvals have hinged on conditions such as guaranteed local procurement, increased employee ownership and even permanent restrictions on job cuts.

South Africa’s state-owned Public Investment Corp., which is Anglo’s second-largest shareholder with 7.4%, issued a statement on Wednesday before the latest BHP and Anglo announcements, calling for “meaningful revision” to the takeover proposal at the time. It has yet to publicly comment on BHP’s third bid or the ongoing negotiations.

BlackRock Inc., which owns 10.5%, has not commented publicly on its position. Nor has activist investor Elliott Investment Management, which has emerged as one of Anglo’s biggest shareholders.

Of the investors that Bloomberg spoke to this week, some suggested that BHP should provide a commitment to cover any lost value suffered by the subsidiaries’ new owners as a result of the spinoff process, or alternatively sweeten the all-share offer with a cash component.

Two of the shareholders – who want changes to the deal’s structure – also said that BHP walking away on May 29 could still produce a positive outcome.

Under its own turnaround strategy, announced last week, Anglo is planning to exit platinum, diamond and coal mining to focus on iron ore and copper operations – a streamlining that investors were already urging upon the company and say could create a more valuable asset if Anglo is able to execute the plans.

Anglo American was trading at £26.46 a share at 11:07 a.m. in London on Friday — about 11% below the current value of the latest BHP proposal.

Most Read from Bloomberg Businessweek

Fed officials on rate cuts, stalling home sales, Anglo American warms to BHP deal and other news to start your day.

(Bloomberg) — Shareholders in BHP Group say they see the world’s largest miner moving one step closer to a $49 billion takeover, after Anglo American Plc rejected a third approach but agreed to talks and granted its suitor an extra week to commit to a binding bid.

Most Read from Bloomberg

As a deadline approached on Wednesday, BHP again sweetened its all-share proposal — but stopped short of altering a structure that would oblige the target to spin off its South African iron ore and platinum businesses before the remainder is bought up.

“Anglo is now showing signs of capitulation with the extension,” said Prasad Patkar, head of qualitative investments at Platypus Asset Management in Sydney, which owns BHP stock. “At a price, Anglo is a seller, and at any price, BHP is a buyer. So I think that deal will get done.”

The two sides are now closer to each other in their view on the valuation, according to people familiar with the matter. But the complexity of BHP’s plan remains a key sticking point in a blockbuster deal to create the world’s biggest copper miner, investors pointed out.

“I would argue with the one-week extension, there is greater likelihood of a deal getting across the line, as Anglo’s board are finally talking,” said Ben Cleary, portfolio manager at Tribeca Investment Partners.

The focus now is on whether BHP’s executives can use the coming week to convince Anglo’s board and its shareholders that they can get the deal to the finish line, without excessive regulatory or social turbulence. That could include making employment or other commitments in South Africa to ease concerns there.

Read More: BHP Has a Week to Convince Anglo Its South African Plan Can Work

“It’s clear that Anglo must accept BHP’s much-improved offer,” said Tim Elliott, who manages almost $2 billion across Regal Funds Management Pty’s global resources funds, including BHP and Anglo shares. “Not only do Anglo shareholders now receive a strong premium, but they receive BHP shares that are deeply undervalued and deliver ongoing exposure to many of the highest quality mines in the world, as well as substantial synergies from the combined group.”

“While there may be a degree of value leakage regarding the listed South African assets, Anglo’s own plan involves similar value leakage through the sale of high quality coking coal mines at what no-doubt will be a deep discount to fundamental value based on coal transactions in recent years,” Elliott said.

Market moves still suggest lingering investor skepticism around the latest offer. At current prices, Wednesday’s informal approach from BHP values Anglo at roughly £30.24 ($38.48) a share, while Anglo’s stock closed on Wednesday at just under £27 in London.

“We do understand the strategic rationale and we think even at the revised price overnight, there’s potentially maybe even a little bit more wiggle room for them to negotiate,” said Dominic Mlcek, portfolio manager at Infinity Asset Management Pty. “We wouldn’t be displeased with them getting it at or a little bit above the current offer.”

But even if investors believe a deal is now more likely to succeed, it doesn’t mean they necessarily support it. BHP shares in Sydney were down around 3% in afternoon trade at A$44.84.

“We’re not happy about the deal, we’re not happy about the price,” said Pratkar from Platypus Asset Management. “Even the price is almost a secondary thing – the size of the deal and the complications that are associated with trying to extract value out something as big as this is. History is against these guys.”

Why BHP Is Targeting Anglo in Mining Mega Deal: QuickTake

–With assistance from Paul-Alain Hunt and Martin Ritchie.

Most Read from Bloomberg Businessweek

Investing.com – Anglo American (JO:AGLJ) rejected a third bid from rival BHP Group (NYSE:BHP), but Anglo agreeing to a one-week extension for a binding takeover offer, is encouraging, according to Jefferies, suggesting a deal is now more likely.

BHP, the world's biggest listed mining group, now has until May 29, after the one-week extension, to make a firm bid for Anglo American or it will be forced to walk away for at least six months under the UK's takeover rules.

BHP's approach is still conditional on Anglo unbundling its platinum and iron ore assets in South Africa, and it’s the fate of these businesses which remain a major stumbling block given Anglo’s deep roots in that part of the world.

“Our base case now is that discussions between BHP and Anglo will lead to a recommended deal,” said analysts at Jefferies, in a note dated May 22.

“We think it is possible that BHP either raises its offer again (albeit modestly) or agrees to changes in structure, or does both to satisfy the Anglo Board.”

The bank noted that BHP probably cannot own both Kumba and Minas Rio due to antitrust issues in iron ore, and BHP is unlikely to agree to own Amplats due to safety issues in PGM mining.

“A separation of Kumba and Amplats will be necessary, in our view. The question is whether this will be done by Anglo as part of this transaction or by BHP sometime soon thereafter,” Jefferies added.

At 05:00 ET (09:00 GMT), Anglo stock traded 0.1% lower at £26.95, while BHP stock fell 0.7% to £23.13.

BHP-Anglo American deal now more likely – Jefferies

Goldman Sachs picks insiders to co-run German, Austrian investment banking

China push on company dividends should attract investment, says regulator

By Melanie Burton and Scott Murdoch

PERTH/HONG KONG (Reuters) -BHP will stand firm on the structure and value of its latest takeover proposal for Anglo American, focusing instead on allaying its target's concerns around execution risks over the coming week, sources said on Thursday.

The world's biggest listed mining group now has until May 29 to make a firm bid for Anglo American or it will be forced to walk away for at least six months under the UK's takeover rules after it was granted a one-week extension on Wednesday.

Two sources who have been in talks with the miner and its advisers said they expect BHP management will spend the next week properly understanding Anglo's concerns on an asset-by-asset basis with a goal to convince it on the merits of the deal.

Baden Moore, analyst at broker CLSA in Sydney, said BHP's goal will be to get Anglo American to agree to open its books and allow a further extension.

"They are gradually, gradually getting closer to a deal," he said.

Anglo chairman Stuart Chambers highlighted concerns on Wednesday about completion and execution risks in BHP's proposal, meaning the structure of any deal and the fate of Anglo's businesses in South Africa remain big obstacles.

One solution that BHP has already offered is to foot the bill to demerge Kumba Iron Ore which is expected to net the South African government $2 billion of much needed capital gains tax, according to a pre-due-diligence BHP estimate, said one of the sources.

Last week, Anglo announced plans to either spin-off or sell its less profitable nickel, diamond and platinum businesses to refocus on copper, and to also sell its coal businesses.

In that plan Anglo would need to bear those substantial spin-out costs itself, which would ultimately be borne by its shareholders.

If the deal does not go ahead, Anglo boss Duncan Wanblad will be under pressure to get top dollar for its diamonds business in particular and ensure its demergers proceed without any hiccups, two investors said. One foot wrong and BHP will be ready to pounce, they said.

"Anglo does not exist in a year's time, one way or the other, in my mind," one of the investors said.

BHP and Anglo are having joint meetings with UK and Australian regulators this week, a separate source told Reuters.

BHP's latest 29.34 pounds per share approach, based on undisturbed share prices at market close on April 23, valued London-listed Anglo at 38.6 billion pounds (about $49.1 billion). The offer was still conditional on Anglo unbundling its platinum and iron ore assets in South Africa.

The May 29 deadline coincides with general elections in South Africa, where Anglo was formed and is still of significant national importance.

Shares of BHP fell 3.8% to A$44.47 on Thursday.

Anglo's shares closed up 0.4% at 26.98 pounds on the London bourse on Wednesday.

($1 = 0.7864 pounds)

(Editing by Editing by Muralikumar Anantharaman)

Just because a business does not make any money, does not mean that the stock will go down. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Nonetheless, only a fool would ignore the risk that a loss making company burns through its cash too quickly.

So, the natural question for Wallbridge Mining (TSE:WM) shareholders is whether they should be concerned by its rate of cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. Let's start with an examination of the business' cash, relative to its cash burn.

Check out our latest analysis for Wallbridge Mining

When Might Wallbridge Mining Run Out Of Money?

A company's cash runway is the amount of time it would take to burn through its cash reserves at its current cash burn rate. As at March 2024, Wallbridge Mining had cash of CA$25m and no debt. Looking at the last year, the company burnt through CA$30m. That means it had a cash runway of around 10 months as of March 2024. To be frank, this kind of short runway puts us on edge, as it indicates the company must reduce its cash burn significantly, or else raise cash imminently. Depicted below, you can see how its cash holdings have changed over time.

debt-equity-history-analysisHow Is Wallbridge Mining's Cash Burn Changing Over Time?

Wallbridge Mining didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. So while we can't look to sales to understand growth, we can look at how the cash burn is changing to understand how expenditure is trending over time. As it happens, the company's cash burn reduced by 45% over the last year, which suggests that management are mindful of the possibility of running out of cash. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.

Can Wallbridge Mining Raise More Cash Easily?

While Wallbridge Mining is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).

Since it has a market capitalisation of CA$102m, Wallbridge Mining's CA$30m in cash burn equates to about 30% of its market value. That's not insignificant, and if the company had to sell enough shares to fund another year's growth at the current share price, you'd likely witness fairly costly dilution.

How Risky Is Wallbridge Mining's Cash Burn Situation?

On this analysis of Wallbridge Mining's cash burn, we think its cash burn reduction was reassuring, while its cash runway has us a bit worried. Summing up, we think the Wallbridge Mining's cash burn is a risk, based on the factors we mentioned in this article. On another note, we conducted an in-depth investigation of the company, and identified 5 warning signs for Wallbridge Mining (3 are concerning!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

(Bloomberg) — BHP Group just won an extra week to convince Anglo American Plc on its $49 billion takeover plan. But the world’s biggest miner still must resolve the deal’s most intractable obstacle: What to do about South Africa?

Most Read from Bloomberg

After a month of rising tensions, the companies are holding discussions after BHP raised the value of its proposal for a third time on Monday. Anglo has rejected the latest bid, but agreed to extend a deadline for BHP to commit to a binding offer so that talks can continue.

Read More: Anglo Opens Talks With BHP After Rejecting $49 Billion Offer

The two sides are now closer to each other in their views on valuation for a deal, according to people familiar with the matter. However, the main sticking point for Anglo is BHP’s continued insistence that the London-based company must spin off its majority stakes in two South African miners to its own shareholders before the takeover can proceed.

Anglo still views the structure as too complicated, and is particularly concerned about who will cover the cost of any conditions imposed by South Africa’s government to approve the multi-step transaction, said the people, who asked not to be identified discussing private information.

A successful takeover would represent one of the biggest-ever mining deals and a defining moment for BHP Chief Executive Officer Mike Henry, who has spent years positioning the commodities giant for a return to large-scale M&A. The combined company would be the biggest copper producer — with about 10% of global mine supply — just as renewable energy demand is projected to surge in the coming years.

Read More: BHP’s $39 Billion Bid for Anglo American Was Years in the Making

But while the agreement to extend the deadline and continue talks suggests progress, people with knowledge of BHP’s position were noticeably more optimistic that a deal is possible than those with insight into Anglo’s current views.

Anglo is concerned BHP’s demand that it first exit Anglo American Platinum Ltd. and Kumba Iron Ore Ltd. could leave the newly independent Johannesburg-listed companies to carry the cost of any concessions imposed by South Africa, reducing their value and ultimately penalizing the current Anglo investors who would receive the shares in the spin offs. Anglo itself may also face conditions to complete the deal as proposed by BHP.

Anglo wants BHP to cover any such costs — either up front or in the future — and those discussions are likely to be a key focus of negotiations over the coming week, the people said.

Spokespeople for BHP and Anglo declined to comment.

From the moment BHP’s takeover approach first became public, South Africa has loomed front and center of a potential deal. It is home to some of Anglo’s biggest operations, employing tens of thousands of employees, and the company has deep political and social ties to the country with a history dating back to its founding in more than a century ago.

BHP by contrast does not have any operations in South Africa, and has at times appeared wrongfooted in its approach, with Henry and other senior officials scrambling to meet shareholders and officials in South Africa days after the news broke. The company also published a belated statement emphasizing that its proposal that Anglo exit the Amplats and Kumba stakes wasn’t a reflection on its views about the country as an investment destination.

And the deal comes at a particularly awkward time, as South Africa heads toward what is expected to be the tightest election in the country’s democratic era — in fact, the new deadline for BHP to commit to a firm offer has been set for May 29, the same day as the national vote.

The approvals required for any deal would likely include South Africa’s competition authorities, as well as the central bank and finance ministry. Anglo is concerned that authorities could impose conditions that range from job guarantees to social and investment commitments, which could affect the value of the two South African units, and therefore the value of the shares to be received by Anglo’s investors in the spinoff.

Read More: BHP CEO Flies to South Africa to Push $39 Billion Takeover

Governments have a long history of using corporate deals to extract more favorable terms, and South Africa is grappling with widening inequality and one of the world’s worst unemployment rate, adding to the pressure to extract concessions.

Anglo’s second-biggest shareholder is the South African state-controlled pension fund, which on Wednesday issued a statement raising concerns about the previous BHP offer, just hours before the latest announcements.

“This would require a meaningful revision of the current BHP proposal that should take into consideration the material risks that current shareholders of both Anglo and its subsidiaries would have to assume over an extended time frame,” the Public Investment Corp. said at the time.

While one senior ruling party politician – Mines Minister Gwede Mantashe – has expressed personal opposition to BHP taking over Anglo, the government has refrained from commenting publicly on the proposed deal, let alone suggesting a preferred outcome.

Dealmakers Confident

But if South Africa’s Competition Tribunal does come to scrutinize the spinoff of Amplats and Kumba, the body will evaluate antitrust impacts but also “public interest” factors, including how a proposed change of ownership will affect employment levels and historically disadvantaged people.

BHP’s dealmakers are confident these obstacles can be addressed, according to the people. The company also sees the issue of price for a takeover as largely settled and does not intend to increase its offer, the people said.

Still, people close to Anglo continue to see significant gaps in how the scale of the South Africa problem is being perceived by the two sides.

Anglo shares swung after Wednesday’s announcements before closing 0.4% higher in London, still trading well below the value of BHP’s latest offer.

In conversations with five of Anglo’s top-20 shareholders on Wednesday, most said the latest news suggested the companies are getting closer to an acceptable price for Anglo and an agreement could be in reach. They said, however, that the major stumbling block remains BHP’s refusal so far to budge on the deal’s structure.

By undertaking to acquire Kumba – Anglo itself plans to spin off Amplats under its alternative plan – BHP could go a significant way to overcoming resistance to its existing proposal, some of the shareholders said.

“The companies believe that they’re getting closer,” said James Whiteside, metals and mining corporate research director at Wood Mackenzie, a consultancy. “Anglo has probably signposted what needs to happen to get it over the line.”

–With assistance from Loni Prinsloo.

Most Read from Bloomberg Businessweek

Anglo American has rebuffed a third takeover attempt by BHP after the Australian company sweetened its offer in an attempt to create a global mining titan.

BHP said it had submitted an “increased and final” bid of £31.11 a share for Anglo, which values the FTSE 100 company at £38.6bn, earlier this week.

Anglo had already rejected two previous offers from BHP: the first, in April, valued it at £31bn and the second, which was snubbed last week, put it at £34bn.

The attempted BHP takeover, the largest ever in the mining sector, would create a global player in markets for commodities including copper, iron ore, potash and metallurgical coal used for steelmaking.

Copper in particular is in high demand as a raw material in the transition to low-carbon energy as it is used in manufacturing components for electric vehicles and renewable energy projects. Anglo’s key assets are copper mines in Chile and Peru.

After the two previous rejections, BHP said it had been “engaging with Anglo American and its advisers” to allay concerns over the deal and that it was hopeful that resolution would be reached in the next seven days.

Mike Henry, the chief executive of BHP, said: “The revised proposal is underpinned by BHP’s disciplined approach to mergers and acquisition and our focus on delivering long term fundamental value.

“BHP’s revised proposal will offer immediate value for Anglo American shareholders and allow them to benefit from the long-term value generation of the combined group.”

BHP’s attempt to snap up Anglo could still be gatecrashed by a rival. The Swiss mining company Glencore has reportedly been considering its own approach.

BHP’s terms require that Anglo sells its stakes in Anglo American Platinum and Kumba Iron Ore, returning cash to shareholders as part of the deal.

Even if BHP is unsuccessful, Anglo’s chief executive, Duncan Wanblad, has pledged to break up the business and sell its platinum division and its De Beers diamond arm.

Stuart Chambers, the chair of Anglo American, said: “The board considered BHP’s latest proposal carefully, concluded it does not meet expectations of value delivered to Anglo American’s shareholders, and has unanimously rejected it.”

Chambers said its board was “confident in Anglo American’s standalone future prospects” and that BHP had not addressed the board’s concerns about the complex terms of the takeover.

“Multiple engagements with the BHP team have not yet been able to resolve the concerns on these issues,” he said.

Anglo received a boost this week when one of its largest shareholders, Legal & General Investment Management, backed the FTSE 100 miner’s break-up plan, calling it a “radical but attractive strategy”.

The South African government is Anglo’s largest shareholder through its Public Investment Corporation (PIC) and home to many of its mines. The PIC has so far been unimpressed by BHP’s takeover attempts and said on Wednesday before the latest bid was made that the previous offer needed “meaningful revision”.

BHP had until 5pm on Wednesday to make an improved offer or walk away for six months under City takeover rules. Anglo said the deadline has now been extended until 29 May.

By Clara Denina and Felix Njini

LONDON (Reuters) -Anglo American has agreed to a one-week extension for BHP Group to make a binding takeover offer, it said on Wednesday, after rejecting a third proposal from its rival that valued it at 38.6 billion pounds ($49.18 billion).

BHP, the world's biggest listed mining group, has now made three unsuccessful offers in a month for Anglo, which has itself outlined a plan to divest its less profitable coal, nickel, diamond and platinum businesses.

The structure of any deal and the fate of Anglo's businesses in South Africa remain big obstacles, with Anglo chairman Stuart Chambers highlighting concerns about completion and execution risks in BHP's proposal.

"The conclusion here appears to be clear – this new proposal was rejected by Anglo on grounds of structure rather than price," said Mark Kelly at MKP Advisors.

Nicholas Stein at top-20 Anglo shareholder Coronation Fund Managers, however, said that "investors are skeptical the BHP deal is enough to get it over the line."

BHP's 29.34 pounds per share approach, based on undisturbed share prices at market close on April 23 and raised from an initial 25.08 pounds, is still conditional on Anglo unbundling its platinum and iron ore assets in South Africa, where it was founded and still has deep roots.

Anglo said that process could take about 18 months, by which time it expects its own restructuring to be completed.

"(The proposal) consequently has the potential for material value leakage to be disproportionately suffered by Anglo American's shareholders," Chambers said.

Anglo's shares closed up 0.4% at 26.98 pounds.

BHP said the ratio of shares it is offering Anglo shareholders is "final", unless there is an offer from a third party or if the board of Anglo is "minded to recommend an offer on better terms".

"None of the conditions have been met at this point in time, and this has to be considered the 'Final Ratio', RBC Capital Markets analyst Kaan Peker said.

It may mean BHP can make a supplementary cash offer, Peker added.

The South African government has been paying close attention to BHP's proposed Anglo deal, and the new deadline of May 29 is the date of a national election there.

Anglo employs more than 40,000 people in South Africa, where mining companies have been cutting jobs and investment, as platinum especially falls out of favour.

South Africa's Public Investment Corporation had earlier said that BHP should consider revising its initial proposal.

"A meaningful revision of the current BHP proposal … should take into consideration the material risks that current shareholders of both Anglo and its subsidiaries would have to assume over an extended time frame," said Abel Sithole, the CEO for PIC, Anglo's second-largest shareholder.

Analysts at JP Morgan have said BHP would need to boost its offer by around 30% to reflect fair value for Anglo and its prized copper assets in Chile and Peru.

Artificial intelligence and automation, and the energy transition, including electric vehicles and renewables, have driven up demand prospects for copper cable used to conduct electricity.

Anglo began reviewing its assets in February following a 94% plunge in annual profit.

Activist fund Elliott Investment Management has built a 3.2% stake in Anglo, making it one of the miner's top 10 shareholders. Elliott has yet to publicly comment on its Anglo investment.

BHP has increased its advisory firepower on its bid, adding Lazard to existing advisers Barclays and UBS.

($1 = 0.7849 pounds)

(Reporting by Clara Denina and Felix Njini; additional reporting by Anousha Sakoui; Editing by Veronica Brown, Shinjini Ganguli, Kirsten Donovan and Jane Merriman)

By Melanie Burton

PERTH (Reuters) – BHP's bid for Anglo American underlines the growing appetite for energy transition metals like copper from miners who must become more aggressive to secure new projects or risk missing out, investors and mining CEOs said on Wednesday.

The bid by the world's biggest listed miner for Anglo is expected to whet appetite for more deals in the sector whether it goes ahead or not, they said.

"There is clearly a preference for buying over building because costs have ramped up so much in the past few years," said Ben Cleary of Tribeca Investment Partners, which is an investor in Anglo American.

"BHP … have been telling you for a long time that they love copper. Rio the same. In terms of their portfolio skew they are still very heavily weighted to iron ore … you are going to see more deals," he said, speaking at the AFR Mining Summit in Perth.

Anglo has twice rejected overtures by BHP, whose deadline to make a third offer expires later on Wednesday. Instead, Anglo has pledged to break up its company to lower costs.

Whether Anglo's management decide to engage with BHP on Tuesday, investors expect more interest in the sector as copper prices, which hit a record above $11,000 a tonne on Monday, climb and encourage new projects.

Rising prices will only make competition for copper assets more intense, said Brett Beatty, partner and managing director Australia, of private equity company Resource Capital Funds.

Beatty said he had faced internal questions over whether RCF had overpaid for the 11.9% stake in Botswana's Khoemecau copper mine that it bought for $70 million in 2019.

That stake was sold when China's MMG bought the mine for $1.88 billion six months ago, making it worth some $224 million, roughly a two-fold return.

“It’s a market where you have to take risk and you’ll be rewarded for it, but if you sit on the sidelines you’re going to miss out,” he said.

Given that lithium prices have begun to recover from rock bottom lows, for companies with the funding, now is a good time to buy, said Joshua Thurlow, head of lithium at Australian diversified miner Mineral Resources.

"M&A's on people’s minds. It’s at that point in the cycle. If you can be counter cyclical … you could argue this is a good time to do it," he told Reuters.

"But also sometimes it takes a lot of gusto and a major balance sheet strengthening process to be able to do it," he added.

MinRes embarked on an acquisition spree of significant stakes in Australian lithium developers last year.

“As we continue to look around the goldfield and more prospective areas we will continue to make deals if and when possible," he added.

Beyond copper and lithium, there is even interest in unloved nickel whose prices have been hit by a surge in Indonesian supply.

Wyloo Metals will in coming weeks put its Western Australian nickel operations on care and maintenance.

"For us we are trying to see beyond the next 6-12 months to the next 10-15 years," CEO Luca Giacovazzi said.

"We are always acquisitive and we are always looking for a longer term opportunity … As a family office that is really chasing assets that produce yield, it’s an interesting time for us to look at opportunities in the market."

(Reporting by Melanie Burton; Editing by Kim Coghill)

BHP Group Limited

GENT, Belgium, May 22, 2024 (GLOBE NEWSWIRE) — ArcelorMittal and partners Mitsubishi Heavy Industries, Ltd. (MHI), BHP, along with Mitsubishi Development Pty Ltd (Mitsubishi Development) have successfully started operating a pilot carbon capture unit on the blast furnace off-gas at ArcelorMittal Gent in Belgium.

The pilot carbon capture unit will operate for one to two years at Gent, to test the feasibility of progress to full-scale deployment of the technology, which would be able to capture a sizeable portion of the Gent site emissions, if successful. Engineers have been working on site since January to assemble and commission the unit.

In October 2022, the four parties announced their collaboration on a multi-year trial of MHI’s carbon capture technology (Advanced KM CDR ProcessTM) at multiple carbon dioxide (CO2) emission points, starting at the Gent steelmaking site. The pilot carbon capture unit will be testing initially with blast furnace and reheating furnace gas and has the potential to be trialled to capture other important steelmaking gases such as reformer flue gas from a Direct Reduced Iron (DRI) plant.

The development of the carbon capture solution at Gent could feed into multiple CO2 transport and storage projects under development in the North Sea region and contribute to global technological solutions required for decarbonisation of steel production. The EU has an objective to achieve an annual CO2 storage capacity of 50 million tonnes by 2030, proposed under the Net-Zero Industry Act. Moreover, the International Energy Agency (IEA) estimates CCUS technology needs to apply to more than 37 per cent of primary steel production by 2050, equivalent to 399 Mtpa of CO2, for the Net Zero Emissions scenario (Source: IEA Net Zero Roadmap – 2023 update).

To further understand how MHI’s carbon capture technology can be incorporated into existing steel plants, ArcelorMittal is facilitating the trial in Gent, Belgium, with MHI supplying its proprietary carbon capture technology and supporting the engineering studies. BHP and Mitsubishi Development, as key suppliers of high-quality steelmaking raw materials to ArcelorMittal’s European operations, are supporting trial funding.

Speaking in Gent at the consortium meeting, ArcelorMittal Belgium’s CEO, Manfred Van Vlierberghe, said: “ArcelorMittal Belgium's decarbonisation efforts can be summarized in three axes. The first axis focuses on energy efficiency: reuse of waste heat and renewable energy. In our second axis, we are replacing coal with a combination of gas and electrification. And finally, the third axis, is based on circular use of carbon – CCU and CCS. Here, the installation of the carbon capture unit on our Gent blast furnace is a great example. The main ambition is to achieve completely carbon-free processes. A radical change is difficult, so we embrace every step that takes us towards our goal.”

MHI’s Senior Vice President (CCUS) of GX (Green Transformation) Solutions, Tatsuto Nagayasu, said: “The launch of this pilot carbon capture unit marks a significant milestone on the iron and steel industry’s journey toward net-zero emissions. As a provider of innovative technologies, we are thrilled to witness our solutions in action, helping to decarbonize existing assets. We eagerly anticipate further deploying our technologies to achieve this goal.”

BHP Group Sales & Marketing Officer Michiel Hovers said “This represents real progress in proving up the feasibility of carbon capture for steel production, and BHP is delighted to be part of this consortium working on the pilot plant. This work could help develop a technology that may significantly lower CO2 emissions intensity from the blast furnace which remains critical to meet steel demand, and while other pathways are further matured.”

Mitsubishi Development Chief Executive Officer, Kenichiro Tauchi said “This pilot is a significant step towards advancement of carbon capture technology as a potential solution to achieve solid emission reductions in the steel sector. We will continue to demonstrate our commitment to advancing confidence in reducing emissions in hard to abate industries as we move towards achieving a carbon neutral society.”

The trial at Gent will have two phases. The first phase involves separating and capturing the CO2 from the top gas from the blast furnace at a rate of around 300kg of CO2 a day – a technical challenge due to the differing levels of contaminants in the top gas. The second phase involves testing the separating and capturing of CO2 in the off-gases in the hot strip mill reheating furnace, which burns a mixture of industrial gases including coke gas, blast furnace gases and natural gas.

CONTACT: Josie Brophy, BHP Media Relations Tel +61 417 622 839

(Bloomberg) — BHP Group Ltd. has just hours to launch a blockbuster bid to buy smaller mining rival Anglo American Plc. — or put its audacious takeover plan on the shelf.

Most Read from Bloomberg

The proposal by the world’s biggest miner to spin off two units and then buy the remainder of Anglo would create a global copper behemoth, heralding the industry’s return to mega—deals after more than a decade. Anglo has already rejected two non-binding offers from BHP — the last worth $43 billion — and unveiled its own plans for a radical restructuring.

Under UK takeover rules, BHP now faces a deadline of 5 p.m. London time on Wednesday to announce a firm intention to make an offer. If Chief Executive Officer Mike Henry instead decides against, he will have to stay away for at least six months.

Read More: BHP Debates Improved Anglo Bid as Time Runs Out in Takeover Saga

The catch is that Anglo’s Chief Executive Officer Duncan Wanblad has so far refused talks with BHP, criticizing a plan the target company feels is too complex and undervalues its stock.

BHP’s discussions over the past days have focused on whether it can table an offer attractive enough to get Anglo’s shareholders to push the company toward talks, people familiar with the matter said at the weekend. Ditching the proposal remained a strong possibility, the people said, with BHP wary of bidding against itself in a vacuum.

“It makes so much sense for these companies to get together,” Matthew Haupt, portfolio manager at Wilson Asset Management in Sydney, which is underweight BHP, said by phone. “So that’s where you’d think that BHP will be having another crack.”

Mining Discipline

The swoop on Anglo has shaken up a global industry that’s in the midst of complex shifts as China’s economy slows and the world’s green transition sparks growing demand for metals geared toward new-energy sectors.

Henry has made no secret of BHP’s desire to expand in copper, and Anglo’s copper mines have long been viewed as prize assets in a sprawling portfolio. The metal’s rally in recent weeks to a record has lent a dramatic backdrop to the public tussle between the two mining giants. BHP rivals including Rio Tinto Group are also expanding in copper.

Top miners were still “incredibly capital-disciplined” and would likely stick to a strategy of buying rather than building new copper mines, Ben Cleary, portfolio manager at Tribeca Investment Partners, said at a major mining conference in Perth, Western Australia. That’s “going to end in bigger deficits” for most commodities, he said.

Breaking Up

At current prices, the latest informal approach from BHP values Anglo at roughly £29.49 a share. Yet Anglo’s stock closed on Tuesday at £26.87 in London — suggesting investors remain skeptical that the current deal will reach the finish line.

BHP wants Anglo to first spin off its South African platinum and iron ore businesses before proceeding with a takeover. Under Anglo’s alternative plan, the firm would focus on copper and iron ore by exiting platinum, diamonds and coal, and slowing a fertilizer project.

The Sydney-listed shares of BHP have risen for six consecutive sessions, and were trading up 0.6% on Wednesday as of 2:37 p.m. local time to A$46.32.

–With assistance from Sybilla Gross and Paul-Alain Hunt.

(Updates with comments in 6th, 9th paragraphs)

Most Read from Bloomberg Businessweek

Key Insights

The projected fair value for Teck Resources is CA$77.86 based on 2 Stage Free Cash Flow to Equity
With CA$72.87 share price, Teck Resources appears to be trading close to its estimated fair value
Analyst price target for TECK.B is CA$71.69 which is 7.9% below our fair value estimate

Does the May share price for Teck Resources Limited (TSE:TECK.B) reflect what it's really worth? Today, we will estimate the stock's intrinsic value by projecting its future cash flows and then discounting them to today's value. Our analysis will employ the Discounted Cash Flow (DCF) model. Models like these may appear beyond the comprehension of a lay person, but they're fairly easy to follow.

We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you still have some burning questions about this type of valuation, take a look at the Simply Wall St analysis model.

View our latest analysis for Teck Resources

The Model

We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. To start off with, we need to estimate the next ten years of cash flows. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years.

A DCF is all about the idea that a dollar in the future is less valuable than a dollar today, so we need to discount the sum of these future cash flows to arrive at a present value estimate:

10-year free cash flow (FCF) forecast

	2024	2025	2026	2027	2028	2029	2030	2031	2032	2033
Levered FCF (CA$, Millions)	-CA$51.5m	CA$1.04b	CA$1.57b	CA$2.35b	CA$2.63b	CA$2.84b	CA$3.02b	CA$3.17b	CA$3.30b	CA$3.41b
Growth Rate Estimate Source	Analyst x2	Analyst x3	Analyst x2	Analyst x1	Analyst x1	Est @ 7.96%	Est @ 6.19%	Est @ 4.96%	Est @ 4.10%	Est @ 3.49%
Present Value (CA$, Millions) Discounted @ 8.1%	-CA$47.6	CA$886	CA$1.2k	CA$1.7k	CA$1.8k	CA$1.8k	CA$1.7k	CA$1.7k	CA$1.6k	CA$1.6k

("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = CA$14b

We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. For a number of reasons a very conservative growth rate is used that cannot exceed that of a country's GDP growth. In this case we have used the 5-year average of the 10-year government bond yield (2.1%) to estimate future growth. In the same way as with the 10-year 'growth' period, we discount future cash flows to today's value, using a cost of equity of 8.1%.

Terminal Value (TV)= FCF2033 × (1 + g) ÷ (r – g) = CA$3.4b× (1 + 2.1%) ÷ (8.1%– 2.1%) = CA$58b

Present Value of Terminal Value (PVTV)= TV / (1 + r)10= CA$58b÷ ( 1 + 8.1%)10= CA$26b

The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is CA$40b. The last step is to then divide the equity value by the number of shares outstanding. Compared to the current share price of CA$72.9, the company appears about fair value at a 6.4% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.

dcfThe Assumptions

The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Teck Resources as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 8.1%, which is based on a levered beta of 1.312. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.

SWOT Analysis for Teck Resources

Strength

Debt is not viewed as a risk.

Weakness

Earnings declined over the past year.

Dividend is low compared to the top 25% of dividend payers in the Metals and Mining market.

Opportunity

Annual earnings are forecast to grow for the next 3 years.

Current share price is below our estimate of fair value.

Threat

Annual earnings are forecast to grow slower than the Canadian market.

Moving On:

Whilst important, the DCF calculation is only one of many factors that you need to assess for a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Teck Resources, we've compiled three essential factors you should further examine:

Risks: You should be aware of the 2 warning signs for Teck Resources we've uncovered before considering an investment in the company.

Management:Have insiders been ramping up their shares to take advantage of the market's sentiment for TECK.B's future outlook? Check out our management and board analysis with insights on CEO compensation and governance factors.

Other Solid Businesses: Low debt, high returns on equity and good past performance are fundamental to a strong business. Why not explore our interactive list of stocks with solid business fundamentals to see if there are other companies you may not have considered!

PS. Simply Wall St updates its DCF calculation for every Canadian stock every day, so if you want to find the intrinsic value of any other stock just search here.

LONDON, May 21, 2024–(BUSINESS WIRE)–

FORM 8.3

PUBLIC OPENING POSITION DISCLOSURE/DEALING DISCLOSURE BY

A PERSON WITH INTERESTS IN RELEVANT SECURITIES REPRESENTING 1% OR MORE

Rule 8.3 of the Takeover Code (the "Code")

1. KEY INFORMATION

(a) Full name of discloser:	Elliott Investment Management, L.P
(b) Owner or controller of interests and short positions disclosed, if different from 1(a): The naming of nominee or vehicle companies is insufficient. For a trust, the trustee(s), settlor and beneficiaries must be named.	Elliott International, L.P. Elliott Associates, L.P The Liverpool Limited Partnership
(c) Name of offeror/offeree in relation to whose relevant securities this form relates: Use a separate form for each offeror/offeree	BHP Group Limited
(d) If an exempt fund manager connected with an offeror/offeree, state this and specify identity of offeror/offeree:
(e) Date position held/dealing undertaken: For an opening position disclosure, state the latest practicable date prior to the disclosure	16th May 2024
(f) In addition to the company in 1(c) above, is the discloser making disclosures in respect of any other party to the offer? If it is a cash offer or possible cash offer, state "N/A"	Anglo American Plc

2. POSITIONS OF THE PERSON MAKING THE DISCLOSURE

(a) Interests and short positions in the relevant securities of the offeror or offeree to which the disclosure relates following the dealing (if any)

Class of relevant security: Ordinary shs : AU000000BHP4	Ordinary
	Interests		Short positions
	Number	%	Number	%
(1) Relevant securities owned and/or controlled:	10,000	0.0002%	6,636,224	0.1309%
(2) Cash-settled derivatives:			8,508,361	0.1678%
(3) Stock-settled derivatives (including options) and agreements to purchase/sell:	5,000,000	0.0986%
TOTAL:	5,010,000	0.0988%	15,144,585	0.2986%

All interests and all short positions should be disclosed.

Details of any open stock-settled derivative positions (including traded options), or agreements to purchase or sell relevant securities, should be given on a Supplemental Form 8 (Open Positions).

(b) Rights to subscribe for new securities (including directors’ and other employee options)

Class of relevant security in relation to which subscription right exists:
Details, including nature of the rights concerned and relevant percentages:

3. DEALINGS (IF ANY) BY THE PERSON MAKING THE DISCLOSURE

The currency of all prices and other monetary amounts should be stated.

(a) Purchases and sales

Class of relevant security	Purchase/sale	Number of securities	Price per unit

(b) Cash-settled derivative transactions

Class of relevant security

Product description

e.g. CFD

Nature of dealing

e.g. opening/closing a long/short position, increasing/reducing a long/short position

Number of reference securities

Price per unit

(i) Writing, selling, purchasing or varying

Class of relevant security

Product descriptione.g. call option

Writing, purchasing, selling, varying etc.

Number of securities to which option relates

Exercise price per unit

Type

e.g. American, European etc.

Expiry date

Option money paid/ received per unit

DR (US0886061086)

Call option

Purchase

2,500,000

US$62.5

American

19/07/24

US$ 1.64583

(ii) Exercise

Class of relevant security

Product description

e.g. call option

Exercising/ exercised against

Number of securities

Exercise price per unit

(d) Other dealings (including subscribing for new securities)

Class of relevant security

Nature of dealing

e.g. subscription, conversion

Details

Price per unit (if applicable)

4. OTHER INFORMATION

(a) Indemnity and other dealing arrangements

Irrevocable commitments and letters of intent should not be included. If there are no such agreements, arrangements or understandings, state "none"

None

(b) Agreements, arrangements or understandings relating to options or derivatives

Details of any agreement, arrangement or understanding, formal or informal, between the person making the disclosure and any other person relating to:

(i) the voting rights of any relevant securities under any option; or

(ii) the voting rights or future acquisition or disposal of any relevant securities to which any derivative is referenced:

If there are no such agreements, arrangements or understandings, state "none"

None

Is a Supplemental Form 8 (Open Positions) attached?

Date of disclosure:	17th May 2024
Contact name:	Michael Cross
Telephone number:	0203 009 1306

Public disclosures under Rule 8 of the Code must be made to a Regulatory Information Service.

The Panel’s Market Surveillance Unit is available for consultation in relation to the Code’s disclosure requirements on +44 (0)20 7638 0129.

The Code can be viewed on the Panel’s website at www.thetakeoverpanel.org.uk.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240520106053/en/

Contacts

Elliott Advisors (UK) Limited

By Melanie Burton and Lewis Jackson

PERTH (Reuters) -Shares of BHP Group touched a three-month high on Tuesday about 36 hours ahead of a deadline to lodge a formal bid for rival miner Anglo American, which last week rejected a sweetened $43 billion takeover proposal.

The world's largest listed miner's shares are benefiting from good news including fresh stimulus for China's property sector, copper prices reaching record highs and a growing view that BHP will not make another tilt at Anglo, according to Andy Forster, senior investment officer at Argo Investments, a BHP shareholder.

"We saw last week that they had a bit of a bounce after rejection by Anglo," he said. "I think they're going to stay disciplined. I'd be surprised if they'd come back at this late stage given the lukewarm response from Anglo's board to the previous offers."

Under UK takeover rules, BHP has until 1600 GMT on Wednesday to make a binding bid for Anglo American or it will be forced to walk away for at least six months. If the companies reach an agreement in the meantime, an extension can be granted.

BHP declined to comment on Tuesday. Its shares were up 0.5% to A$45.93 in afternoon trading. Anglo's London-listed shares closed 0.1% higher at 26.80 pounds on Monday.

Anglo's board has already knocked back two all-share proposals from BHP as inadequate and too difficult to execute and last week unveiled plans for a break-up to focus on energy transition metal copper while spinning out or selling its coal, nickel, diamond and platinum businesses.

The copper assets make strategic sense for BHP but the longer the deal takes to close, the more likely it is a competitor lobs a rival bid for some of Anglo's assets, according to Hayden Bairstow, an analyst at Australian stockbroker Argonaut.

"The risk of waiting is that Anglo's metallurgical coal assets go to someone else or an interloper like Glencore comes in with a more compelling deal," he said.

It would take Anglo a minimum of six to 12 months to run a sales process for the coal assets, according to an Australia-based investment banker who spoke on condition of anonymity.

Bankers are now jostling to get business from potential buyers, the person added.

Jefferies analysts said last week that BHP could be interested in the coal assets if it did not succeed in its bid for Anglo, given it owns nearby mines.

BHP would need to boost its latest offer by about 30% to reflect fair value for Anglo and its key copper assets, JPMorgan analysts said in a note last week.

Both of BHP's offers required Anglo divest its platinum and iron ore assets in South Africa, where it employs more than 40,000 people.

BHP has told investors it will not drop its requirement for Anglo to demerge those businesses as a condition of the deal.

($1 = 0.7869 pounds)

(Reporting by Melanie Burton in Perth, Lewis Jackson in Sydney and Himanshi Akhand in Bengaluru; Editing by Praveen Menon and Jamie Freed)

Investing.com — Shares in BHP Group (ASX:BHP) reached a three-month high in Australian trading on Tuesday as the deadline approached for the world's largest miner to sumbit a new formal bid for rival Anglo American (JO:AGLJ).

Analysts cited by Reuters said that BHP shares have been boosted in part by growing predictions that the company will not make another offer for Anglo. Surging copper prices and fresh stimulus for China's ailing property sector were also seen as a catalysts for the stock.

BHP has until 1600 GMT on Wednesday to put forward another proposal for Anglo American. An extension can be established if the two firms reach an agreement. If not, BHP will need to wait for at least six months before unveiling a fresh bid.

Anglo's board of directors has already rejected two all-share offers from BHP, including an improved $43 billion offer submitted last week, saying they were inadequate and difficult to execute.

Shares in BHP touch three-month high as deadline for Anglo bid nears

Eagle Materials reports Q4 earnings, revenue miss

Lowe's net sales top Wall Street estimates in the first quarter

Written by Amy Legate-Wolfe at The Motley Fool Canada

It can feel a bit risky to get in on an investment as the price rises. Take gold, for example. The price is rising right now as investors look to hedge inflation. However, investors are likely to withdraw their cash from gold to put back in the market in a bull market once more.

However, the same theory doesn’t hold for copper stocks. That’s because, overall, the global economy is doing well, particularly in large countries like China and the United States. This is driving up demand for copper across many industries. But an even bigger factor is the demand for copper in the green energy sector. Copper is a key component in things like electric vehicles and renewable energy infrastructure, and the push toward these technologies is creating a long-term increase in demand.

Add to this, it’s getting harder to produce more copper. Existing mines are aging and struggling to increase output, and there aren’t enough new mines being developed to keep up with demand. This imbalance between supply and demand is pushing prices up. So, let’s look at three copper stocks to get in on the action.

Teck stock

While not a solely copper-focused company, Teck Resources (TSX:TECK.B) is a strong investment to consider. Teck stock is a diversified resource company with operations in various commodities, including copper, zinc, and steelmaking coal. This diversification can help mitigate risks associated with fluctuations in copper prices.

However, the company is still heavily invested in copper. Teck stock is one of the largest copper producers in North America. Its established market position, along with its operational expertise, allows it to benefit from economies of scale and maintain competitive advantages.

What’s more, Teck stock has been investing in expanding its copper production capacity and exploring new copper deposits. These growth initiatives can potentially enhance the company’s revenue and profitability in the long run, especially considering the projected increase in demand for copper. And right now, shares are rising by 24% in the last year alone.

Taskeko Mines

Another strong company to consider is Taseko Mines (TSX:TKO). Taseko Mines is primarily focused on copper mining, with its flagship asset being the Gibraltar Mine in British Columbia, Canada. As a copper-focused company, Taseko’s performance is closely tied to copper prices and demand.

Their primary asset, the Gibraltar Mine, is a producing copper mine with strong copper grades expected for 2024. If copper prices continue to climb, Taseko could benefit significantly. Plus, Taseko recently acquired the remaining ownership of the Gibraltar Mine, giving them full control of the project. This could streamline decision-making and potentially improve efficiency.

Overall, Taseko stock offers the potential for significant growth if copper prices keep rising and the Florence Copper project is successful. And shares are already surging, up 95% in the last year alone.

First Quantum

Finally, if you want in on copper stocks then First Quantum (TSX:FM) is also a solid choice. First Quantum has a presence in multiple countries, including Zambia, Panama, Mauritania, and Argentina. This spread reduces risk compared to companies reliant on a single mine. Their biggest mine, Kansanshi in Zambia, is a high-volume producer.

Furthermore, First Quantum has a history of increasing copper production, and they have plans for continued expansion at their Kansanshi mine. This could lead to significant future growth in copper output.

Then there’s the potential resolution in Panama. A major hurdle for First Quantum was a dispute with the Panamanian government regarding their Cobre Panama mine. While not fully resolved, there have been signs of progress in reaching an agreement. Settling this dispute could unlock significant future copper production from this mine. Shares are down 41%, so this is certainly a recovery stock. However, it’s already doubled in share price since 52-week lows.

The post 3 Copper Stocks to Buy as the Commodity Continues to Soar appeared first on The Motley Fool Canada.

Just Released! 5 Stocks Under $50 (FREE REPORT)

Motley Fool Canada's market-beating team has just released a brand-new FREE report revealing 5 "dirt cheap" stocks that you can buy today for under $50 a share.

Our team thinks these 5 stocks are critically undervalued, but more importantly, could potentially make Canadian investors who act quickly a fortune.

Don't miss out! Simply click the link below to grab your free copy and discover all 5 of these stocks now.

Claim your FREE 5-stock report now!

Most Read from Bloomberg

BHP’s plan to partially break up and then acquire Anglo has transfixed the mining industry by pitting two of its biggest names against each other in a public tussle. Anglo has already rejected two non-binding proposals from BHP — criticizing both the valuation and complexity — and instead rushed out a dramatic restructuring plan of its own.

Now, all eyes are on BHP: By 5pm London on Wednesday, the world’s biggest miner must either announce a firm intention to make an offer, or walk away for six months under UK takeover rules.

BHP is considering whether to make an improved proposal, but had yet to do so, according to people familiar with the matter. The world’s biggest miner would like some sign of engagement from Anglo to make a firm offer, some of the people said, and one way to achieve that could be with a proposal attractive enough to convince Anglo’s own investors to push the company to enter talks.

Still, BHP is wary of bidding against itself in a vacuum, and walking away remains a strong possibility. The company currently has no intention of going hostile with an offer to Anglo’s shareholders if the board refuses to engage with it.

Spokespeople for BHP and Anglo declined to comment.

BHP CEO Mike Henry is trying to get his hands on Anglo’s copper assets, which are the envy of the industry, but wants Anglo to first spin off its South African platinum and iron ore businesses before proceeding with a takeover. The acquisition would be the industry’s biggest deal in over a decade and would create the world’s biggest copper producer — accounting for roughly 10% of global supply — at a time when mining companies and their investors are positioning to benefit from a looming supply deficit.

The approaching deadline follows a drama-filled week, in which BHP revealed that it been rebuffed for a second time after increasing the number of shares it was offering for the rest of Anglo. A day later, Anglo CEO Duncan Wanblad unveiled his own plan to reshape its business by exiting platinum, diamonds and coal and slowing an unpopular fertilizer project.

Read More: Anglo-BHP Battle Is Between Two CEOs Fighting Over Same Vision

BHP has been emboldened by Anglo’s announcement given the similarities to its own plan — particularly the proposal to spin off the platinum business — and the company is now weighing how it might draw Anglo shareholders into the fray to pressure the smaller miner to begin discussions.

Technically, Anglo could ask for an extension to the deadline, but as things stand it has no intention to do so, people familiar with the matter said.

And while some shareholders have warmed to Anglo’s plan this week, its two biggest holders, BlackRock Inc. and South Africa’s Public Investment Corp., have yet to express a public view on which approach they would favor. The pair will be pivotal, holding about 18% of Anglo’s stock between them.

Meanwhile, activist Elliott Investment Management has also built a stake in Anglo and is currently assessing its options, another person said.

Speaking privately, several of Anglo’s other large shareholders said that they had not been convinced by BHP’s latest proposal. They also indicated a lack of urgency, saying that Anglo’s plan to slim itself down and focus on copper increased the likelihood that BHP or one of its rivals would target the company for a takeover in the future, if the current attempt doesn’t succeed.

However, BHP’s own shareholders may be skeptical if a restructured Anglo demands a better valuation.

Read More: BHP’s Bid for Anglo American Was Years in the Making

“The problem is, if they take out that risk, they come back in a year’s time, they have to pay a higher 30% premium on Anglo share prices in a years’ time when it’s in a better situation,” said Hugh Dive, chief investment officer of Atlas Funds Management in Sydney, which owns BHP shares.

BHP’s current offer values Anglo — including the majority stakes it holds in the listed South African companies — at £29.45 a share. Anglo closed on Friday at £26.775 in London, suggesting investors are pricing in a lower likelihood of a deal, but remains about 27% higher than the day before the BHP approach was first reported by Bloomberg.

In conversations with five of Anglo’s top-20 shareholders, most said they thought that Anglo’s plan has put the company on a surer footing, at least for the immediate goal of fending off BHP’s current takeover attempt. Several said that they particularly welcomed the belt-tightening promised at the UK fertilizer project.

Read More: Anglo Goes for Bold Breakup Plan in Move to Fend Off BHP

If Anglo’s management can achieve its ambitious portfolio overhaul, the shareholders agreed that the leaner copper and iron ore business will be a much more attractive target than the sprawling company is today – something they said won’t be lost on Rio Tinto Group and Glencore Plc. For now, however, most of the investors said that neither of the visions for Anglo outlined so far by Henry or Wanblad is clearly superior, and they could be persuaded by both sides.

BHP currently has no intention of taking its offer directly to Anglo’s investors in a hostile bid, several of the people said. Such a move would not allow for BHP to conduct due diligence on Anglo’s assets and would risk invoking the ire of its own shareholders, who have demanded the company stays disciplined. It would also require it to bid for all of Anglo — including the parts it’s insisting Anglo hive off as a prerequisite for a deal.

That means BHP needs Anglo to engage and agree to talks. But the clock is running down.

–With assistance from Clara Ferreira Marques, Sybilla Gross, Simon Casey, Yvonne Yue Li, Jacob Lorinc and Swetha Gopinath.

Most Read from Bloomberg Businessweek

By Anousha Sakoui

LONDON (Reuters) – BHP Group would need to boost its latest offer around 30% to reflect fair value for Anglo American and its key copper assets, JPMorgan analysts said in a note.

They raised their price target for London-listed Anglo to 27.75 pounds a share after reexamining the value of its copper assets, and said the discount for the shares to the implied value of BHP's offer was at its greatest level, implying the market sees a deal as unlikely.

WHY IT'S IMPORTANT

Anglo has rejected two bid proposals from BHP. Under UK takeover rules BHP must make a firm offer by May 22, or walk away. BHP's latest proposal was 27.53 pounds per share, up from 25.08 previously.

KEY QUOTES

"Anglo’s shares now trade at the greatest discount (-13.6%) to the implied value of BHP’s offer, implying that the market assigns a low probability to BHP’s ability to raise its offer and achieve an agreed deal," JP Morgan analysts said.

"In a 20% (change of control) scenario, we estimate Anglo American plc at ~£32/sh (~$50bn), or Anglo plc Rump (the entity BHP is seeking to acquire) at $39bn (£24.79), ~30% higher than the value of BHP’s current offer."

BY THE NUMBERS

The analysts increased their December 2025 fair value for Anglo Copper by 25% to $27 billion (17.47 pounds per share) and increased their Anglo price target to 27.75 pounds per share from 26 pounds previously. That factored in their copper reassessment, as well as $4 billion lower capital spending (capex) forecast over 2025 due to the cessation of development capex at the Woodsmith crop nutrient project.

CONTEXT

On Monday, Anglo rejected an improved 34 billion pound ($43 billion) proposal from BHP, saying BHP "continues to significantly undervalue" its business. BHP has proposed Anglo divest its South African platinum and iron ore assets as a pre-condition to an offer for the rest of the company.

THE RESPONSE

Anglo and BHP did not immediately comment on the report.

(Reporting by Anousha Sakoui; Editing by Mark Potter)

By Clara Denina and Felix Njini

LONDON (Reuters) – Anglo American has been looking for partners for its fertiliser project in North Yorkshire for around six months, Chief Executive Duncan Wanblad told Reuters, reiterating the business will be one of three pillars of the revamped miner, even as work there stalls.

The London-listed miner outlined a radical plan on Tuesday to shrink by divesting less profitable coal, nickel, diamond and platinum businesses, as it moves to fend off BHP Group's $43 billion takeover offer.

As part of the plan, Anglo said it would slow the development of its Woodsmith fertiliser project in northeast England, pushing back first production from 2027.

"We have been in the market looking for partners for the better part of six months now and we have to stall to get the partners to the point where they are prepared to invest," Wanblad said in an interview with Reuters on Thursday.

Woodsmith, on which the miner announced a $1.7 billion writedown a year ago, has the world's largest known deposit of polyhalite, a naturally-occurring mineral containing nutrients including potassium, calcium, magnesium and sulphur, which it is marketing as POLY4.

A feasibility study for the project is only expected to be ready by the beginning of 2025. This would have been followed by a board full notice to proceed in the first half of the year if the wider assets restructuring had not got in the way.

"(When) we're delevered materially compared to where we are now, we're going to be in a much stronger position to move this forward and that's the plan," Wanblad said.

The company's net debt swelled to $10.6 billion by the end of 2023, from $6.9 billion a year earlier.

Analysts estimated total spending on Woodsmith at around $9 billion.

Wanblad also said a plan to spin off the company's platinum unit in South Africa, sell off or demerge the diamonds and coking coal businesses wasn't rushed by the takeover threat from BHP.

Anglo last week rejected a second proposal from the world's No. 1 miner.

"I started an operational restructure last year …in May, it was completed in December," Wanblad told Reuters.

In February, Anglo announced an asset review having earlier outlined plans to implement deeper cost cuts to preserve cash.

"None of this is a response that we've caught up or concocted up in the last 10 days," Wanblad added.

"You can see the clarity of the thinking and the depth of the thinking that's gone into this, it's not days' worth of work, it's many months' worth of work."

(Reporting by Clara Denina and Felix Njini; Editing by Susan Fenton)

White Rock, British Columbia–(Newsfile Corp. – May 16, 2024) – Honey Badger Silver Inc. (TSXV: TUF) (OTCQB: HBEIF) ("Honey Badger" or the "Company") announces that Mr. Chad Williams has purchased 4,431,000 common shares of Honey Badger Silver Inc. ("TUF" or the "Company") (TSXV: TUF) at a price of $0.06 per common share.

Immediately prior to the purchase, Mr. Williams held 12,065,924 common shares representing approximately 19.50% of the Company's issued and outstanding common shares and would have held 28.57% if all of the 3,510,167 share purchase warrants and 2,100,158 stock options held by him were exercised.

As a result of his purchase of 4,431,000 common shares today, Mr. Williams now holds 16,496,924 common shares, representing approximately 26.66% of TUF's issued and outstanding common shares, and would hold 35.73% if all of his share purchase warrants and stock options were exercised.

Mr. Williams acquired the common shares described herein for investment purposes and subject to applicable securities laws, may increase or decrease his ownership of securities of the Company from time to time depending on market conditions and/or other relevant factors.

A copy of the early warning report to be filed by Mr. Williams in connection with the purchase of common shares described above will be available on SEDAR+ under the Company's profile.

About Honey Badger Silver Inc.

Honey Badger Silver is a silver company. The company is led by a highly experienced leadership team with a track record of value creation backed by a skilled technical team. Our projects are located in areas with a long history of mining, including the Sunrise Lake project with a historic resource of 12.8 Moz of silver (and 201.3 million pounds of zinc) Indicated and 13.9 Moz of silver (and 247.8 million pounds of zinc) Inferred (1)(3) located in the Northwest Territories and the Plata high grade silver project located 165 km east of Yukon's prolific Keno Hill and adjacent to Snowline Gold's Rogue discovery. The Company's Clear Lake Project in the Yukon Territory has a historic resource of 5.5 Moz of silver and 1.3 billion pounds of zinc (2)(3). The Company also has a significant land holding at the Nanisivik Mine Area located in Nunavut, Canada that produced over 20 Moz of silver between 1976 and 2002. (2,3) A qualified person has not done sufficient work to classify the foregoing historic resources as current mineral resources and the Company is not treating the estimate as a current mineral resource. The historic resource estimates cannot be relied upon. Additional work, including verification drilling / sampling, will be required to verify the estimate as a current mineral resource.

(1) Sunrise Lake 2003 RPA historic resource: Indicated 1.522 million tonnes grading 262 grams/tonne silver, 6.0% zinc, 2.4% lead, 0.08% copper, and 0.67 grams/tonne gold and Inferred 2.555 million tonnes grading 169 grams/tonne silver, 4.4% zinc, 1.9% lead, 0.07% copper, and 0.51 grams/tonne gold.(2) Clear Lake 2010 SRK historic Resource: Inferred 7.76 million tonnes grading 22 grams/tonne silver, 7.6% zinc, and 1.08% lead.(3) Geological Survey of Canada, 2002-C22, "Structural and Stratigraphic Controls on Zn-Pb-Ag Mineralization at the Nanisivik Mississippi Valley type Deposit, Northern Baffin Island, Nunavut; by Patterson and Powis."

ON BEHALF OF THE BOARD

Dorian L. (Dusty) Nicol, CEO

For more information please visit our website www.honeybadgersilver.com or contact Ms. Michelle Savella for Investor Relations | msavella@honeybadgersilver.com | +1 (604) 828-5886.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Cautionary Note Regarding Forward-Looking Information

This news release contains "forward-looking information" within the meaning of the applicable Canadian securities legislation that is based on expectations, estimates, projections and interpretations as at the date of this news release. Any statement that involves discussions with respect to predictions, expectations, interpretations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected", "interpreted", "management's view", "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts", "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking information and are intended to identify forward-looking information. This forward-looking information is based on reasonable assumptions and estimates of management of the Company at the time such assumptions and estimates were made, and involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Honey Badger to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information.

Such factors include, but are not limited to, risks relating to capital and operating costs varying significantly from estimates; delays in obtaining or failures to obtain required governmental, environmental or other project approvals; uncertainties relating to the availability and costs of financing needed in the future; changes in equity markets; inflation; fluctuations in commodity prices; delays in the development of projects; other risks involved in the mineral exploration and development industry; and those risks set out in the Company's public documents filed on SEDAR+ (www.sedarplus.ca) under Honey Badger's issuer profile. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed timeframes or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/209594

(Bloomberg) — Shareholders in BHP Group Ltd. and takeover target Anglo American Plc expect the world’s largest miner to come back with a third and improved proposal before a regulatory deadline next week, even after the smaller company laid out a bold restructuring plan of its own on Tuesday.

Most Read from Bloomberg

Anglo has twice rejected all-share approaches from BHP that would require it to spin off listed South African businesses, arguing the proposal created “significant uncertainty” for shareholders. Instead, to counter the latest $43 billion move, it has said it will itself exit diamonds, platinum and coal, turning into a miner focused on copper and iron ore — crown jewels for the group.

BHP has said it will remain disciplined in its pursuit and the market is signaling at least some investors remain skeptical, with Anglo American shares trading around £26.40 in the London morning — well below the latest bid, equivalent to £27.53 per share.

Yet shareholders in both companies interviewed by Bloomberg, some of whom declined to be named as they are not authorized to speak to the media, said there was still likely to be some room for a sweetened offer before a May 22 cut-off.

“I reckon they’ll go back to Anglo and say – look, we’re going to come back with 5% more,” said Daniel Sullivan, head of global natural resources at Janus Henderson, which holds both BHP and Anglo stock. “That’ll be it, and we’re going to take it straight to the shareholders. And the shareholders will rush at it faster than you’ve ever seen.”

Why BHP Is Targeting Anglo in Mining Mega Deal: QuickTake

In remarks to a mining conference this week, BHP Chief Executive Officer Mike Henry argued shareholders should now determine which of the two teams had a better chance of delivering the overhaul, signaling he would not yet cede.

Anglo’s decision not to hold discussions with BHP seemed “super aggressive,” Sullivan said, as the company raised concerns about carve-outs of its South African platinum and iron ore businesses but then chose to at least partly pursue a similarly complex strategy itself.

“I’m quite surprised that Anglo’s decided to blow up the company, rather than engage,” Sullivan said. “They’re probably scaring their own shareholders a bit by now. Those statements and decisions look quite erratic. And that’s not a good thing for anybody.”

–With assistance from William Clowes and Paul-Alain Hunt.

Most Read from Bloomberg Businessweek

By Melanie Burton and Scott Murdoch

MELBOURNE (Reuters) – BHP Group's options for its pursuit of rival miner Anglo American include sweetening its $42.7 billion buyout offer, making a hostile bid or walking away for now as it approaches a May 22 deadline to lodge a binding offer.

As BHP weighs its next move, CEO Mike Henry and his team have been making the case for the mega-deal on the sidelines of an investor conference in Miami and elsewhere to its investors, a large proportion of whom also hold shares in Anglo.

"At this stage I think it is up to BHP to try to convince enough of Anglo's institutional shareholders over the coming week that it's worthwhile pressuring their board to engage with BHP, with a potentially even higher offer on the table should this occur," Morningstar analyst Jon Mills said.

Anglo's board has already knocked back two all-share proposals from BHP as inadequate and too difficult to execute and on Tuesday unveiled plans for a break-up to focus on energy transition metal copper while spinning out or selling its less profitable coal, nickel, diamond and platinum businesses.

That plan met with a mildly supportive response from Anglo investors, who said it provided a strategy but was short on details.

With the exception of Anglo keeping its South African iron ore assets and selling its Australian coal mines, it was also similar to BHP's own plans for its takeover target.

"It would seem to me that they (Anglo) need to demonstrate why the bird in the hand is not better than two in the bush," Anglo investor Todd Warren at Tribeca Investment Partners said.

A top 25 Anglo investor said that there was nothing compelling about the company's restructuring proposal, which resulted in shares closing 3.2% lower at 26.195 pounds on Tuesday, below BHP's latest offer of about 27.53 pounds per share.

"Anglo management need to push for a bump. An additional 10%. And then wait for Glencore," said the investor who declined to be identified due to the sensitivity of the matter.

Swiss commodities group Glencore is studying a possible rival bid for Anglo, Reuters reported this month.

"We retain our view that interloper risk remains high," JPMorgan analyst Lyndon Fagan wrote in a note published on Tuesday before Anglo's restructure was announced.

Rio Tinto CEO Jakob Stausholm said on Tuesday that his company was not afraid of M&A, but it had strong organic growth options.

BHP, Anglo, Glencore and Rio Tinto declined to comment on Wednesday.

BHP'S OPTIONS

Under UK rules, BHP has one week left to make a binding bid for Anglo or it will be forced to walk away for at least six months.

To make its case for the buyout, BHP has pointed to its successful spin-off of South32, the demerger of its petroleum business to Woodside Energy in 2022 and coal asset sales as evidence that it is a safer pair of hands, according to slides from Henry's presentation in Miami.

It has also flagged execution risk after Anglo's management did not follow through on a 2016 vision of a "new Anglo" that would simplify the miner's structure into a core portfolio of diamonds, platinum group metals and copper.

The option of going hostile and taking its offer directly to Anglo shareholders is not new to BHP, which did so unsuccessfully in 2007 with a $140 billion all-share bid for rival Rio Tinto. It also made a $39 billion hostile bid for Canada's Potash Corp in 2010 that was blocked by the Canadian government.

But two sources familiar with the matter said BHP will not take that approach because it needs Anglo's management on board to clear regulatory hurdles in South Africa and to help it unlock the most value for shareholders. BHP also needs an agreed due diligence period to examine Anglo's books, they added.

BHP has also told investors it will not drop its requirement for Anglo to demerge South African businesses Kumba Iron Ore and Anglo American Platinum as a condition of the deal. Making a binding bid at the price already rejected by Anglo would force BHP to buy the entire company, which it is not prepared to do, said a source with knowledge of the matter.

That narrows BHP's options for a revised bid to improving the share ratio, adding some cash, or a mix of the two.

It could also decide to walk away, just as Xstrata, later bought by Glencore, did from a proposed $96 billion merger of equals that was rejected by Anglo's board in 2009.

BHP has told investors that Anglo is not a make-or-break deal and it may need to take time to reassess, a prospect increasingly being priced in with BHP shares on the rise, one investor said.

BHP shares were up 2.6% on Wednesday.

BHP could come back later once Anglo does more restructuring, though it would need to be at a higher price, the investor added.

(Reporting by Melanie Burton in Melbourne and Scott Murdoch in Sydney. Additional reporting by Greg Roumeliotis in New York and Sinead Cruise, Amy-Jo Crowley, Anousha Sakoui and Clara Denina in London; Editing by Praveen Menon and Jamie Freed)

CONNECT WITH US

Tweets

Tweet with hash tag #miningfeeds or @miningfeeds and your tweets will be displayed across this site.

Tweets by MiningFeeds

MOST ACTIVE MINING STOCKS

Daily Gainers


CMC Metals Ltd.	CMB.V	+900.00%
Eden Energy Ltd	EDE.AX	+200.00%
GoviEx Uranium Inc.	GXU.V	+42.86%
Eagle Nickel Ltd.	ENL.AX	+41.67%
Citigold Corp. Limited	CTO.AX	+33.33%
Mount Burgess Mining NL	MTB.AX	+33.33%
Exalt Resources Limited	ERD.AX	+31.94%
Casa Minerals Inc.	CASA.V	+30.00%
Cariboo Rose Resources Ltd	CRB.V	+28.57%
Belmont Resources Inc.	BEA.V	+28.57%

CONNECT WITH US

Tweets

MOST ACTIVE MINING STOCKS

Daily Gainers

Articles

FOUND POSTS

CATL Commits US$4.4 Billion to Expand Mining Business

Mark Morabito’s Intrepid Metals Secures Key Land Position at Corral Copper Project in Arizona

India Expands Access to Critical Minerals With Mining Rule Changes

Glomar and Cobalt Blue Target US Refinery for Seabed Mineral Processing

Ontario Funds 68 Early-Stage Mining Projects Through Exploration Program