Emerging producers like Bellevue could be on the menu for the big producers, ditto for Peel in the copper space. Stavely shareholders soak up SPP and Creasy punts on Galileo neighbour Greenstone.
There was not much to come from Diggers & Dealers during the week that could be classified as needle-moving stuff.
There was though confirmation along Elon Musk lines that being in lithium was a licence to print money and that the uranium sector (led by Paladin:PDN/Boss:BOE) was fast maturing as a serious investment destination in the critical materials space.
The overall mood of the 2,600 delegates that managed to brave Kalgoorlie’s high winds and Qantas/Virgin check-ins was said to have been mildly buoyant.
With last week’s prediction about an impending gold bounce starting to look well-timed, the likes of Bellevue and De Grey are offering significant upside while Gold Road is a pick of the producers. Plus, Strandline ‘keeping a lid’ on first mineral sands production as Coburn project revs up and Kairos’ eagerly-awaited Pilbara lithium assays due about now.
The turn-around underway at Gascoyne illustrates this upside while Ivory Coast gold mine developer Tietto is also in line for a re-rate. Plus, Bellevue Gold insulates itself against rising costs.
The 18% fall in the US dollar gold price since its high in March of $US2,078/oz in response to rising interest rates, but despite rampant inflation and emerging pressure on the greenback, has knocked the stuffing out of the Aussie gold sector.
The macro negatives come on top of the cost pressures across manpower, energy and supplies, making for a perfect storm. The only positive has been the offsetting fall in the Aussie dollar to sub-US70c.
The unprecedented outlook for the red medal is big news for the juniors, such as Sunstone, which analysts have just suggested could have up to 15Moz of gold equivalent at its two copper porphyry discoveries. Stavely chief Chris Cairns reckons a copper price of US$10/lb is on the cards and Caravel shows its WA copper project could be just what the world will need.
Promising drill hit 10km north of its world-class Gonneville nickel-copper-PGE find, and one from Caspin 30km further along, set investors’ juices flowing again. Plus, last week’s words of rare earths wisdom were bang on the money, as Australian Rare Earths proved, and iron ore junior Genmin defies the odds with US$10m in funding from Anglo American.
Middle Kingdom’s stranglehold on rare earth supplies, which are crucial components of EVs and wind turbines, highlights enormous opportunity for Aussie juniors. Australian Rare Earths, PVW and RareX are among those making action in the space. Plus, Volt raises to re-start Ukraine graphite mine.
MD Dale Henderson says “evidence at the coal face with our customers suggests demand remains incredibly strong”. Record sale comes as market prepares for news of Liontown’s third major lithium offtake deal. Plus, Mincor banks its first cheque from BHP and lots of smoke billowing from Nimy’s nickel hunt in WA.
Sell-off in nickel stocks like Centaurus, despite the metal price holding up, seen as an opportunity for longer-term investors. Ditto for lithium shares.
A disconnect has opened up between metal prices and equity values as a result of the savage reset of equity markets to sharply lower levels.
The fear around what impact the inflation-fighting moves in the major economies will have on economic growth and metals demand is fair enough.
But the reality in the here and now is that commodity prices, particularly the metals needed for global decarbonisation, have been holding up well in comparison to the broad-brush dumping of equities.