News

Bargain hunters rushed back into the stock market after this week’s well telegraphed rise of 0.75% in official U.S. interest rates, but whether they got a bargain is yet to be seen because the latest rate rise will not be the last in the cycle.

Better buying could lie ahead as the turmoil created by the co-called “bondcano” (a sharp jump in interest rates) is supercharged by the Ukraine war and the price of oil, which are the keys to a bruising outbreak of inflation.

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A fundamental restructuring of global uranium supply and pricing presents an “incredible’’ opportunity for producers and late-stage explorers, analysts say (reports The Australian).

The Russian invasion of Ukraine, which has thrown fossil fuel markets into chaos particularly across Europe, has also affected the uranium sector, with nuclear energy producers historically sourcing a lot of material from Russia and Kazakhstan. While sanctions on Russian supply have not been put in place to date, US officials have indicated it is seeking $US4.3bn ($6.1bn) to buy domestically produced uranium, which it would then contract and sell to US buyers. Legislation to establish the strategic uranium reserve was introduced to the US Congress in April.

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The ASX-listed uranium sector has come in from the bitter cold of the last 11 years, buoyed by the relentless global decarbonisation push and security of supply concerns caused by Russia’s invasion of Ukraine (writes Barry FitzGerald on MiningNews).

The sector was forced into hibernation 11 years ago when the Fukushima nuclear power plant in Japan suffered a meltdown and radioactive release after being hit by an earthquake and a subsequent tsunami. Uranium prices collapsed to less than US$20/lb for a time as much of the world turned its back on nuclear power, forcing mine closures and the deferment of mine development plans. But the rise of the decarbonisation thematic in more recent years has turned the tide.

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You know it’s been a bad month when a 4% share price fall is considered a good result, but that’s one way of looking at the uranium sector where declines of that size, and less, stand out against double digit drops elsewhere (Tim Treadgold on Small Caps).

No one needs reminding that the past four weeks have been among the toughest for investors in two years, though a handful of industries have held up reasonably well, especially those exposed to energy, as a simple test demonstrates. Over the past month, as the overall Australian stock market (as measured by the All Ordinaries Index) has lost 6.5%, the energy index has risen by 3.5% and while much of that increase is a result of higher prices for oil and gas, it also reflects the latest uptick in the uranium price.

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There is a fight brewing in the lithium market, after a controversial forecast from Goldman Sachs Group analysts set off a backlash among some of the industry’s most prominent experts (reports Bloomberg).

Lithium is a vital component of electric vehicle batteries, which means the outlook for supply, demand and pricing is increasingly consequential. For years, a small group of niche consultants has dominated the conversation in a commodity that some say will become as important as oil in the coming century. Now, with prices surging and demand booming, they’re increasingly sharing the stage with Wall Street titans like Goldman.

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Stavely Minerals has announced a “very robust” maiden resource for the Cayley Lode discovery in Victoria (reports MiningNews).

The initial resource is 9.3 million tonnes at 1.2% copper, 0.2 grams per tonne gold and 7.1gpt silver for 252 million pounds of contained copper, 65,000 ounces of gold and 2.1 million ounces of silver. The estimate comprises 5.87Mt at 1.04% copper, 0.23gpt gold and 7gpt silver in the indicated category. Almost three quarters of the contained copper in the resource is constrained in an open pit optimisation in the indicated category. The resource includes an underground component of 1.7Mt at 1.8% copper, 0.2gpt gold and 6gpt silver.

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The global commodity business can get a whole lot more expensive — and dirtier, too (reports Bloomberg).

The war — and pandemic-fuelled shortage of raw materials appears poised to fuel what’s already the biggest surge in commodity prices in decades, according to the latest MLIV Pulse survey conducted June 6-10. At the same time, demand for fossil fuels is only expected to rise as Europe seeks to shift away from Russian energy, dashing any immediate hopes that high prices will foster a shift to cleaner renewable sources.

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Plus, Bellevue Gold set for juicy cashflow on low costs and 200,000oz a year, Inca gets pulses racing with some good-looking core from the NT and Josh Pitt’s $6m Traka works up its porphyry targets.

The primer for this year’s Resources Rising Stars two-day investor conference at Royal Pines on the Gold Coast was for the 650 investors and miners/explorers in attendance to “be on the right side of the BOOM”. Strandline (STA) boss Luke Graham provided a road map to do just that, outlining a case in his understandably pumped day-one presentation for a major re-rating of the company as it approaches first production and cash flow from its $340 million Coburn mineral sands project in WA’s mid-west.

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7th - 8th Jun 2022

RRS 2022 Gold Coast Conference

We're delighted to be returning to the RACV Royal Pines Resort on the Gold Coast in 2022 for our 19th annual Resources Rising Stars Investor Conference.

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