JPMorgan Lowers Piedmont Lithium Price Target; This IPO Is Oversubscribed; Nexa Reports Results; Compass Refocuses

1. JPMorgan Chase analyst Bill Peterson maintained a Neutral rating on Piedmont Lithium Inc. PLL and lowered his price target from $25 to $15.

2. Metals Acquisition Limited MTAL announced its initial public offering of CHESS depository interests in Australia was oversubscribed, receiving strong demand from both new investors and existing institutional shareholders.

Due to the higher demand, the company determined that the proceeds raised will be upsized by A$25 million (~$16.44 million) to A$325 million (~$214 million), and the final price of the offer is set at A$17.00 (~$11.18) per CHESS depository interest.

The CHESS depository interests are expected to begin trading on February 20, 2024, and the proceeds will partly be used to repay Glencore Plc’s GLEN deferred consideration facility related to the acquisition of the CSA Copper Mine in New South Wales, Australia.

The funds will also be used to enhance working capital for operational flexibility and potential production growth, support exploration and mine development at the CSA Copper Mine and cover the offer's costs and other administrative expenses.

3. Nexa Resources S.A. NEXA reported fourth-quarter and full-year 2023 exploration and assay results.

In 2023, Nexa's drilling strategy concentrated on expansion and infill drilling at projects like Aripuanã, as well as exploration in new areas to achieve a total of 257,482 meters drilled. 

The company also executed significant exploratory drilling in Peru, Brazil and Namibia, with plans for further exploration in these countries in early 2024.

Senior Vice President Jones Belther commented, “During 2023 we achieved 97% of the planned activities with the execution of 85,199 meters of exploratory drilling out of the planned 88,196 meters."

4. Compass Minerals International Inc. CMP reported first-quarter results for fiscal 2024.

The company reported adjusted EBITDA of $59.4 million and similar year-over-year margins, with its salt business seeing a 7% and 8% year-over-year increase in operating earnings and adjusted EBITDA.

Compass Minerals’ Plant Nutrition sales jumped 67% year-over-year to 75,000 tons due to a normalization of demand in West Coast markets.

The company also announced a 6% expected reduction in 2024 capital expenditure as it adjusts its investment priorities to improve returns on invested capital.

President and CEO Edward Dowling commented, “We are refocusing our efforts on improving cash flow generation and returns on capital in our core salt and plant nutrition businesses through rigorous cost management and reduced capital intensity."

Dowling added: "I am confident that by executing on a strategy that emphasizes getting back to the basics in our core businesses while nurturing the growth of our emerging fire retardants business, we will increase the cash generation capability of our enterprise, drive higher returns on capital and unlock the intrinsic value of our business for our shareholders over time.”

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