The best performance on the market came from low profile Codrus Minerals which doubled from 7c to 14c after reporting a rare earth and niobium farm-in deal over the Karloning project 260 kilometres north-east of Perth in WA’s wheatbelt.

A true micro-cap with a market value of just $4.9 million, the sharp price move underlined the high level of investor interest in the rare earth sector with Lynas the local leader adding 21c to $8.65.

A more important move was a 78c (17%) rise by Chalice Mining to $5.38 after it reported excellent high grade assays from the latest drilling to the north of its Julimar discovery on the outskirts of Perth.

The best hit of 157.5 metres at 1.7 grams a tonne of 3E (platinum, palladium, and gold), plus useful grades of copper, cobalt and nickel prompted Macquarie Bank to refresh its Chalice buy tip, setting a 12-month price target of $7.50.

Rounding off a good week for Chalice was news that its team of explorers had won a major award for the Julimar discovery, the Thayer Lindsley trophy from the Canada’s Prospectors and Developers Association with the presentation set for the PDAC conference in early March.

Galileo Mining and Mitre Mining were two other stocks to benefit from discovery news. Galileo rose by 5.5c to $1.10 after reporting its best ever rhodium assays from drilling at Callisto project in WA, while Mitre put on 4c to 22c after reporting the acquisition of tenements prospective for lithium in the Pilbara region of WA.

Other lithium-exposed stocks also continued to ride the battery-metals theme with Global Lithium adding 16c to $2.44. Core Lithium added 5.5c to $1.45 and Pilbara rose by 4c to $4.86.

Graphite stocks, the often-overlooked flipside of the battery sector, had a mixed week but did receive a boost at mining conference in Los Angeles were the battery anode material was said to be poised to replicate the extreme price increase of its cathode cousin, lithium.

That claim from Andy Miller, chief operating officer of Benchmark Mineral Intelligence, helped Talga Resources rise by 25c (19%) to $1.57 and lifted Syrah Resources by 19c (8%) to $2.47, and will probably reinstate graphite stocks on the watch list of investors.

Overall, the Australian market performed well, up 1.4% as measured by the all ordinaries index, but against a background of worrying economic news and the latest interest rate developments which point to a period of slower increases but heading for a higher terminal rate sometime next year.

The interest rate roller coaster started the week with an aggressive 0.75% increase from the New Zealand central bank with its governor, Adrian Orr, promising more next year to try to crush inflation.

Australia’s central bank is now almost 1.5% below the official rate in NZ and while Reserve Bank governor Philip Lowe is keen to catch up, he is also being subjected to political attacks from backbench members of the government who claim that because Lowe got it wrong last year with his inflation forecast, he’s getting it wrong again with his interest rate policy.

When those attacks on the government are layered on top of an aggressive push to boost the power of unions in the Australian economy and demands for industry-wide wage rises, the scene is being set for a bruising showdown next year.

Other important news affecting financial markets this week include:

  • The continued melt-down of cryptocurrencies with the collapse of the FTX crypto exchange amid reports of a massive shortfall in funds, possibly the result of theft. The good news with the crypto crisis is that it has not caused any problems in the genuine banking sector.
  • Further evidence of instability in the executives ranks of Fortescue Metals Group with high profile recruit and former senior Reserve Bank official Guy Debelle stepping back because of a bicycle accident.
  • Ongoing uncertainty about when China might lift its Covid-zero policy which is slowing the country’s economy, and
  • Strong support for local capital raisings from investors keen to get a slice of ongoing strong demand for minerals and metals.

Among the latest share issues and placements is a $20 million initial public offering by VHM, a rare earth and mineral sands company strongly backed by iron ore and lithium producer Mineral Resources.

Gina Rinehart is also reported to have lent her financial support to a $21 million raising by Brazilian Rare Earths. Musgrave Minerals is reported to be seeking a fresh $8 million. Troubled Gascoyne Resources is said to be seeking up to $80 million, and Southern Gold is raising $16 million after reporting high grade gold intersections at its Sunday Creek project in Victoria.

Gold had a better week, clawing back a US$20 an ounce rise to US$1755/oz after dropping as low as US$1734/oz on Monday.

UBS, an investment bank, added its weight to the case for gold with a research note which tipped a price of US$1900/oz by the end of next year, partly because it expects the global economy to stall under the weight of rising interest rates.

Gold companies news and markets moves included:

  • St Barbara rising by 5c to 66c as interest grows in an expected asset shake-out in WA’s Leonora goldfield. Shaw and Partners reckons St Barbara is heading for $1.80.
  • Orecorp added 1.5c to 40c after reporting that it had received debt funding proposals for its Nyanzaga project in Tanzania.
  • Auteco Minerals crept 0.5c higher to 6c after reporting spectacular drill hits at its Pickle Crow project in Canada with a best intersection of 1020 grams a tonne over a thin 0.4 metres. Shaw is tipping a future price for the stock of 21c while Canaccord sees 15c as the target, and
  • Gold sector leader Northern Star rose by 59c to $10.61 while emerging producers Bellevue and De Grey moved higher. Bellevue put on 5.5c to 96 and De Grey added 5c to $1.28.

Iron ore stocks had a mixed week and with both Fortescue Metals and Mineral Resources morphing into energy plays it is becoming harder to work out what’s driving them.

The price of high-grade iron ore edged closer to US$100 a tonne thanks to improved demand from Chinese steel mills though Macquarie thinks that might be as far as it goes while uncertainty remains about the direction of China’s economy.

Fortescue, which was initially buoyed by a full-on sales spiel at its annual meeting by chairman Andrew Forrest, faded from a five-month high of $20.02 in late trading last Friday to $19.38 with Macquarie holding firm on a sell tip and price target of $14.50.

Mineral Resources did better with a rise of $5.05 to $86.83 while CZR caught the eye of investors with news of expanding its mineral footprint on the Robe Mesa which lifted the stock by 0.1c to 1.5c.

Other news and markets moves of interest this week included:

  • Coda Minerals released a positive mining study into its Elizabeth Creek copper project in South Australia with a more detail scoping report to follow. On the market, Coda slipped 1.5c lower to 25c but Canaccord sees 90c as the target price.
  • The saga of SolGold continued with the Australian-backed copper and gold explorer with its best assets in Ecuador attracting a major Chinese copper producer, Jiangxi, which has injected US$36 million into SolGold for a 6.3% stake. The company already has BHP, Newcrest and DGR Global among its biggest shareholders. SolGold slipped 8% lower on the London stock exchange, and
  • Magnetic Resources added 4c to 82c after reporting promising rare earth assays from scout drilling at its Trayning project in WA. The best hit reported this week was 52 metres at 1343 parts per million (0.1343%) total rare earth oxides from a depth of 12m.