Group 1 - Auto makers experienced a decline in stock prices as investors reacted negatively to President Donald Trump's proposal to acquire Greenland [1] - In contrast, defense and mining stocks saw a rally, indicating a shift in investor sentiment towards these sectors amid geopolitical concerns [1] Group 2 - The market's reaction highlights the volatility in the automotive industry, which is sensitive to political developments and international relations [1] - The defense and mining sectors are perceived as safer investments during times of uncertainty, leading to increased demand for their stocks [1]

Market Overview - U.S. stock futures declined on Tuesday, continuing the negative momentum from Friday's declines, influenced by President Trump's tariff threats against Europe [1] - Major indices showed significant losses: Dow Jones down 1.66%, S&P 500 down 1.79%, Nasdaq 100 down 2.23%, and Russell 2000 down 2.17% [2] Company Performance - United Airlines Holdings Inc. (NASDAQ:UAL) fell 2.26%, with projected quarterly earnings of $2.94 per share on revenue of $15.40 billion [6] - BHP Group Ltd. (NYSE:BHP) decreased by 1.65% despite raising copper production guidance and setting operational records [7] - Alibaba Group Holding Ltd. (NYSE:BABA) dropped 2.35% as ByteDance challenges its dominance in China's cloud market [7] - Taiwan Semiconductor Manufacturing Co. Ltd. (NYSE:TSM) declined 1.21% despite plans for a significant U.S. manufacturing expansion [7] - Netflix Inc. (NASDAQ:NFLX) shares rose 0.15% ahead of earnings, with expectations of $0.55 per share on revenue of $11.97 billion [15] Economic Indicators - The 10-year Treasury bond yielded 4.28%, while the two-year bond was at 3.57%, with a 95% likelihood of the Federal Reserve maintaining current interest rates in January [2] - Upcoming economic data includes construction spending, pending home sales, jobless claims, GDP revisions, and consumer sentiment [16]

Core Viewpoint - The Australian IPO market is currently facing challenges, with a lack of new listings and a recent withdrawal of Barkly Rare Earths from its planned IPO, indicating a continued struggle for new company listings despite some optimism in the metals market [1][2][5]. Group 1: IPO Market Status - Unity Metals recently listed on the ASX, marking the first IPO of the calendar year 2026 [1]. - Barkly Rare Earths has postponed its listing from January 22 to an indefinite status, contributing to a bleak outlook for new IPOs [1][5]. - The easing of ASX IPO listing rules last year has not significantly improved the situation, as the market still resembles the IPO drought experienced in late CY23 [2][3]. Group 2: Upcoming Listings - Two upcoming IPOs are scheduled for February: Eastern Gas Corporation aiming to raise $5.5 million and Macallum New Energy targeting $9 million, both categorized as smaller listings [6]. - There is a notable absence of larger, high-profile companies looking to list, with Canva confirming it will not pursue an ASX IPO, leaving investors awaiting a significant listing [6]. Group 3: Market Sentiment - Despite the recent enthusiasm in metals prices, the overall sentiment in the IPO market remains cautious, with stockbrokers returning from holidays in anticipation of new listings [2][4]. - The current environment suggests that investors who favor IPOs may find limited opportunities in the near term [5].

Summary of Key Points from the Conference Call Industry Overview - The focus is on the **Aluminium** and **Copper** sectors within the **Australia Materials** industry, particularly in the context of the global mining sector [1][2]. Core Insights and Arguments - The **copper-aluminium ratio** is currently at approximately **4.1x**, which is two standard deviations above its 10-year average of **3.5x**. This is the highest level since February 2021, when it peaked at **4.3x** [2][3]. - Over the past period, aluminium prices have increased by around **80%**, while copper prices have risen by about **15%**. The rise in prices has been influenced by the **Russia-Ukraine conflict** [2]. - Recent strength in copper due to **supply disruptions**, **US stockpiling**, and **tight inventories** outside the US suggests that aluminium may also see price increases through **substitution** if copper demand remains strong. Substituting copper with aluminium becomes economically viable when the ratio exceeds **3.5-4.0x**, particularly in applications like **heating**, **air conditioning**, and **power transmission** for **electric vehicles (EVs)** [2]. - The commodity team projects aluminium prices to reach **US$3,250/t** by **2Q26**, driven by demand outpacing supply, with China's production cap of **45Mtpa** remaining in place and Indonesian smelters expected to ramp up production slower than consensus due to **power constraints** [2]. - **South32 (S32)** is highlighted as the most preferred investment with approximately **32% FY26e Aluminium EBITDA exposure** at spot prices, and it has moved to the 1 position in overall preference [2]. - **Rio Tinto (RIO.AX)** is rated as **Equal Weight (EW)** with an **18% spot CY26e Aluminium EBITDA exposure**, but is considered fully valued compared to **BHP**, which is rated **Outperform (OW)** [2]. Additional Important Insights - The **FY27/FY28e Free Cash Flow (FCF) yields** for South32 are projected at **3.8%** and **9.7%**, respectively, despite significant capital expenditures at its Hermosa and SG projects [2]. - Production at the **Mozal** facility is expected to continue at approximately **560kt**, counter to consensus expectations, although higher electricity costs are anticipated [2]. - The report includes a detailed **ASX Miners Relative Preference Table**, ranking various companies based on their investment thesis, upside/downside potential, and financial metrics [9]. Financial Metrics and Valuation - The report provides a comprehensive overview of **valuation multiples** and key metrics for ASX miners, including **Market Cap**, **EV**, **P/E**, **EV/EBITDA**, **FCF Yield**, and **Dividend Yield** for various companies [12][14]. - **BHP** and **Rio Tinto** are noted for their strong balance sheets and attractive commodity mixes, with BHP having a projected **P/E** of **14.1** and **Rio Tinto** at **13.5** for FY26 [12][14]. Conclusion - The aluminium sector is poised for potential growth driven by substitution dynamics and supply constraints, while specific companies like South32 are positioned favorably for investment. The overall outlook for the mining sector remains attractive, with various companies showing strong financial metrics and growth potential.

Core Viewpoint - BHP reported a strong first half of FY26, driven by record operational performance in copper and iron ore, leading to an increase in copper production guidance and progress on long-term growth projects, particularly in copper and potash [1] Group Copper Performance - Copper emerged as the top performer, benefiting from favorable pricing and operational improvements, prompting an increase in group copper guidance for FY26 due to stronger-than-expected delivery across multiple assets [2] - Escondida, BHP's flagship copper operation in Chile, achieved record concentrator throughput, resulting in an expanded production guidance range [2] - Antamina raised its output outlook, while Spence and Copper SA are on track, with Copper SA achieving record refined gold production as a by-product [2] Iron Ore Operations - Iron ore operations delivered record results, with Western Australia Iron Ore (WAIO) achieving its highest-ever first-half production and shipments, positioning the business favorably ahead of the challenging wet season [3] - In Brazil, Samarco volumes increased following strong performance at its second concentrator, which was restarted late in the first half of FY25 [3] Strategic Transactions - BHP announced a transaction with Global Infrastructure Partners regarding WAIO's inland power network, expected to generate approximately US$2 billion in proceeds while allowing BHP to retain ownership and operational control, described as innovative and value-accretive [4] Coal Production - Steelmaking coal production rose, supported by a five-year high in stripping performance at BMA, while energy coal output increased by 10% year on year, contributing to the group's diversified earnings base [5] Growth Projects - BHP confirmed that the Jansen potash project in Canada is on track for first production in mid-2027, expected to be a long-life, low-cost, and scalable asset aligned with global food security trends [6] - An updated cost estimate for Jansen Stage 1 was released alongside the operational update [6] Global Demand Environment - BHP's performance occurs amid a mixed but resilient global demand environment, with China's commodity demand supported by targeted policy measures and solid exports, although momentum has moderated in the second half of calendar 2025, particularly in construction and infrastructure [7] - India is emerging as a key demand driver, with robust domestic growth supporting rising steel consumption and accelerating copper demand [7]

ab 16 January 2026 Global Research Sector Keys Copper Crunch - the Bull Market accelerates Equities Global Basic Materials Myles Allsop Analyst myles.allsop@ubs.com +44-20-7568 1693 Daniel Major Ethan Hong Associate Analyst ethan.hong@ubs.com +1-212-649 8258 UK Takeover Panel Disclosure: Analyst daniel.major@ubs.com +44-20-7568 3472 Amy Yi Li Analyst amy-yi.li@ubs.com +44-20-7568 2064 George Eadie Analyst george.eadie@ubs.com +1-646-996 4596 Alex Stansbury, CFA Associate Analyst alex.stansbury@ubs.com +1-21 ...

Core Viewpoint - BHP Group Ltd has reported its December update, highlighting mixed production results across its key commodities, with a notable increase in iron ore production and a decrease in copper and coal production [1][2][3]. Production Performance - Copper production for the December quarter was 490.5kt, down 1% quarter on quarter and down 4% year on year [2]. - Iron ore production reached 69.7mt, showing a 9% increase quarter on quarter and a 5% increase year on year [2]. - Steelmaking coal production fell to 4.3mt, reflecting a 12% decline quarter on quarter and a 3% drop year on year [3]. - Energy coal production was 4.6mt, marking a 31% increase quarter on quarter and a 25% increase year on year [3]. Cost and Guidance Updates - The estimated cost for the Jansen stage 1 project has risen to US$8.4 billion, up from previous estimates of US$7 billion to US$7.4 billion [3]. - BHP has increased its FY26 copper production guidance to capitalize on record copper prices driven by strong demand and supply disruptions among competitors [4]. Growth Initiatives - BHP is advancing its copper growth options, including the Vicuna project in Argentina, which is on track to complete its integrated technical report in Q1 2026 [5]. - The environmental impact declaration for the Escondida new concentrator in Chile is expected to be submitted in the second half of FY26 [5]. Market Context - Demand for commodities remains strong, particularly from China and India, with global growth forecasted at around 3% for 2026, supporting commodity demand [10][11]. - BHP is positioned to benefit from this demand, with a significant copper growth pipeline aimed at achieving approximately 2 Mt of attributable copper production in the 2030s [11]. Management Insights - CEO Mike Henry emphasized BHP's strong operational performance in copper and iron ore, with copper prices up 32% and iron ore prices up 4% year on year [7]. - A transaction with Global Infrastructure Partners is expected to generate proceeds of approximately US$2 billion while maintaining ownership and operational control [8]. Future Outlook - The Jansen potash project in Canada is on track for mid-2027 production, expected to add a new commodity to BHP's portfolio [9]. - The company is investing for long-term growth, focusing on production increases that benefit current shareholders [12].

Core Thesis - United States Antimony Corporation (UAMY) is undergoing a strategic transition to become a fully vertically integrated domestic producer, which is expected to significantly enhance profit margins from 20% to approximately 60% [2][4] Financial Performance - UAMY's share price was $8.29 as of January 16th, with trailing and forward P/E ratios of 33.93 and 30.67 respectively [1] - The company's revenue guidance for 2026 has been raised to $125 million, driven by the expansion of the Thompson Falls smelter, which will increase output fivefold [2] Market Sentiment - Wall Street maintains a consensus "Strong Buy" rating for UAMY, with an average price target range of $9.86 to $17, indicating a potential upside of 30% to 120% from current levels [3] - The stock has a short interest of 17.86%, but institutional accumulation suggests that maintaining price levels in the $7–$8 range could lead to a gamma- or short-squeeze scenario, potentially pushing shares above $11 [3] Strategic Positioning - UAMY benefits from a constrained supply of Western Antimony, making it a strategically important domestic player, especially for defense applications where U.S. regulations require non-Chinese sourced antimony [4] - The company operates the only active smelter and refiner in the U.S., providing a significant competitive advantage and reinforcing long-term upside potential [4]

Core Viewpoint - McFarlane Lake Mining Limited is participating in the Vancouver Resource Investment Conference (VRIC) and has engaged marketing firms for digital marketing services to enhance investor awareness and engagement [1][4][5]. Group 1: Conference Participation - The Vancouver Resource Investment Conference (VRIC) is a prominent event in North America focused on the global resource sector, attracting mining companies, institutional investors, analysts, and retail investors [2]. - McFarlane Lake's management team will be present at the conference to discuss developments and objectives related to the Juby Gold Project [3]. Group 2: Marketing Engagements - McFarlane has signed a four-month agreement with The Market Link for an advertising campaign, which includes various digital marketing services [4]. - The Company has also engaged Emerging Markets Consulting for digital marketing and investor awareness campaigns, with a total cash compensation of US$100,000 [5]. Group 3: Juby Gold Project Overview - McFarlane Lake Mining is focused on its flagship Juby Gold Project, which has a Mineral Resource Estimate of 1.01 million ounces of gold in the Indicated category and 3.17 million ounces in the Inferred category, based on a long-term gold price of US$2,500 per ounce [6]. - A sensitivity analysis at a higher gold price of US$3,750 per ounce indicates an increase in the Indicated Mineral Resource to 1.20 million ounces and Inferred Mineral Resource to 4.23 million ounces [7]. Group 4: Additional Assets - In addition to the Juby Gold Project, McFarlane holds a portfolio of 100%-owned gold assets in Ontario, including the past-producing McMillan Gold Mine and Mongowin properties [10].

Core Insights - Kinross Gold Corporation (KGC) is advancing three organic growth projects in the U.S. to enhance its portfolio, aiming for mine life extension and cost optimization [1][8] Project Details - The three projects include Round Mountain Phase X and Bald Mountain Redbird 2 in Nevada, and the Kettle River–Curlew project in Washington, expected to significantly boost KGC's U.S. production profile with a combined Internal Rate of Return (IRR) of 55% and a post-tax Net Present Value (NPV) of $4.1 billion [2][8] - Round Mountain Phase X is projected to add 1.4 million gold equivalent ounces (Au eq. oz.) to its life-of-mine production, with promising mineralization discovered [3] - The Kettle River mill will restart to process high-grade mineralization, targeting approximately 100,000 gold ounces (Au oz.) annually for the first five years, with an initial mine life of 11 years starting in 2028 [4] - Bald Mountain Redbird 2 and five satellite pits are expected to contribute 643,000 Au oz. of production, extending the mine life to early 2032 [4] Financial Strategy - Kinross Gold plans to fully self-fund these growth projects from operating cash flows, reflecting a disciplined financial strategy [5] - In 2025, the company repaid $700 million in debt and returned over $750 million to shareholders, ending the year with approximately $1 billion in net cash [5] - With $1.6 billion in available credit as of September 30, 2025, and no debt maturities until 2033, Kinross is well-positioned for growth while enhancing its balance sheet [5] Stock Performance - KGC stock has increased by 226.5% over the past year, outperforming the industry average growth of 153.8% [6]