News - Fitzgerald Articles

New Century Zinc and Venturex among those in the cold, with share prices lagging analysts’ forecasts

The 10-year high in zinc prices has not amounted to much in the local market for the near-term developers. While the established and new producers have been rewarded with strong share price gains in response to their higher earnings, the developers have been left out in the cold. Because they are not yet in production, the argument goes that a 10-year-high metal price of $US1.55 a pound – it compares with the 2016 average of US95c and the 2017 average of $US1.29 – means nothing for them.

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Plus, little Stavely awaits drilling results in its hunt for a big copper-gold discovery

Gold’s against-the-odds push through $US1,300 an ounce fuelled a massive re-rating of the gold producers in the past couple of months. So much so that the hard-nosed types in the market reckon the leading gold producers have become too expensive on a net present value basis. None of that means much if gold continues to build above $US1,300 an ounce. But the very same reasons why gold wasn’t meant to get there in the first place (expectations of rising US rates and a stronger US dollar from tax reform) have not gone away.

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Plus, Genesis working its way on to the M&A radar as drilling highlights gold project development potential

On face value, last week’s acquisition by Bill Beament’s Northern Star juggernaught of a 16.4 per cent stake in Echo Resources (80 million shares at an average price of 29c each) was no big deal. Northern Star’s Jundee mine sits at the northern end of the Yandal belt in Western Australia and Echo has its foot on the southern end, with its currently-mothballed Bronzewing treatment plant its centrepiece.

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Plus, Flanagan outlines Battery Minerals’ low-cost, fast-track route to graphite production and cashflow

Breaker Resources’ (BRB) executive chairman Tom Sanders reckons that the 50c stock is dirt cheap. The “Colonel” said as much when addressing more than 400 investors yesterday at the Brisbane leg of Resources Rising Stars’ “Summer Series”. There is nothing unusual in that kind of statement being made by a company man, particularly when the company involved is “laying the foundations for a large new greenfields gold mine, 100km from Kalgoorlie”.

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Plus, Encounter dangles the carrot with results imminent from drilling near Telfer and the prospect of news on its alliance with Newcrest

Mineral sands prices have bounced back from the pummelling they took between 2013-2016. The 40% share price gain for the industry leader in this market Iluka since March is ample demonstration of the recovery underway. Zircon is in tight supply, with Iluka having announced a couple of reference price increases during the year. Prices have also improved for rutile but the urgency for restocking by the pigment end users is not as severe.

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Plus, unloved Cassini tipped to bounce back as investors digest Oz Minerals deal

Plenty of CEOs think their company’s shares are undervalued. Some have a point, most don’t. Mel Palancian, managing director of the ASX’s only pure (producing) zinc play, Red River (RVR), is in the former category, and he made his case at the Melbourne Mining Club’s Cutting Edge series during the week. There was some emotion to it too, with Palancian saying he feared a low-ball takeover bid as he sees a lot more value for shareholders than the current $135m market capitalisation (28c a share) implies.

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Plus, strong drilling results for Zinc of Ireland worthy of more investor attention

Finding some upside in the ASX-listed zinc stocks has become a big ask of late. Pretty much all of them have had a mighty run on the back of zinc’s massive price recovery in response to the closure of same big-name mines after they were mined out, Glencore’s pulling of 500,000 tonnes of annual production from the market pending the return of higher price and China’s environmental crackdown on its domestic industry. Zinc is now fetching $US1.46/lb. The 54% price gain on last (calendar) year’s average of US95c/lb puts the metal at 10-year highs.

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And will Perseus’ forecast production increases get the stock out of the sin bin?

Cobalt is a key metal in the dominant lithium-ion battery chemistries, meaning demand for the stuff is being swept along by the biggest disruptive industrial event since Henry Ford’s Model T hit the roads in the early 1900s – the electric vehicle revolution. The problem is that 65% of the world’s cobalt is sourced from the Democratic Republic of the Congo, with the artisinally-produced component of that – think child labour and shocking working conditions – accounting for some 15%.

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