Iluka Resources, a titanium minerals and zircon producer, led the way this week to the government cash trough, securing a $1.27 billion loan from the Australian Government for its earth refinery in WA.

Other government funding deals are expected to flow over the next few weeks, according to Iluka’s chief executive, Tom O’Leary, as pressure grows in the western world to counter China’s control of critical minerals and the Ukraine war threatens trade flows.

Investors initially welcomed the Iluka funding but their enthusiasm quickly waned, in line with skepticism among leading investment banks about the risks associated with complex mineral processing and the questionable benefits of getting into bed with government.

On the market, Iluka shares started the week with a bang, adding $1.04 (9%) in the days after the announcement to reach an all-time high of $12.60, when profit takers and doubts took over, pushing the stock back to $12.11.

Investment banks, while welcoming access to government funds to power the next phase of Iluka’s growth, are concerned about the technical hurdles ahead with rare earth refining a devilishly tricky business and for the potential for a logjam to develop as other rare earth projects also benefit from government support, including the Kalgoorlie refinery of Lynas Rare Earths.

Citi said the rare earth refinery was hard to value which is why it maintained a neutral rating on Iluka and set a price target of $10.50, down 12.7% on last sales while Morgan Stanley stuck with a price target of $9.75, down 19% on last sales.

Iluka’s rise and fall was against a background of growing uncertainty with three big negatives bearing down on financial markets:

  • Rising U.S. interest rates and a warning from the chief executive of JPMorgan Chase, Jamie Dimon, that “dramatically higher” rates are on their way as the U.S. central bank tries to crush inflation.
  • Soaring energy prices in Europe as it tries to cut itself off from Russian oil, gas and coal in a process which could tip the region into recession and
  • A continuation of draconian Covid-19 suppression measures in China which are killing economic growth.

Those factors can be seen at work in Australia with the broadest measure of the stock market, the all-ordinaries index, surging higher in the first half of the week before slumping back to where it started.

The metals and mining index performed a similar up/down dance while the gold index did the opposite, weak at first and then noticeably stronger as the bad news took its toll of investor confidence, sparking a chirpy gold-positive comment from Morgan Stanley which sees the potential for gold to climb back as high as $US2172 an ounce.

What caught the eye of Morgan Stanley analysts is the recent, albeit brief, inversion of yields on U.S. debt with the two-year bond yielding more than the 10-year, which is said to be “a potential signal for a higher gold price”, the bank said.

“If gold price forecasts for 2023 were to move higher and spot prices persist, there could be substantial upside risk to earnings for gold equities,” Morgan Stanley said.

DGO was the top local gold stock thanks to a share-swap takeover bid valued at $3.55 a share from Gold Road. On the market, DGO added 55c to $3.37 while Gold Road lost 14c to $1.50 in another fine example of buy the target, sell the bidder.

Gold Road’s interest in DGO almost certainly lies in its 14.4% stake in De Grey Mining and its world class Mallina project in the north of WA with a future move on De Grey highly likely though on the market this week De Grey slipped 1c lower to $1.17 despite Bell Potter tipping a future price of $1.72.

Other gold moves include Evolution down 22c to $4.22, Northern Star, down 53c at $10.16, and Genesis, up 13c to $1.80.

Mineral Resources roared back into the lithium market during the week with a report that it would start exporting from its mothballed Wodgina mine in WA from next month to catch the sky-high prices for the critical battery metal which J.P. Morgan, an investment bank, reckons could be in a state of perpetual deficit as demand for electric vehicles accelerates.

On the market, Mineral Resources added $6.87 (12.8%) to $60.25 seemingly on its way to the $66 price forecast from Citi.

Allkem, the merged Galaxy and Orocobre, was another lithium stock in strong demand after brokers attended an upbeat investor day which left banks scrambling to upgrade their spread sheets and investment recommendations.

Citi boosted its price tip for Allkem from $13.42 to $15.50, an increase of 21% on yesterday’s closing price of $12.83. Bell Potter went in even harder with a price forecast of $18.05.

In other lithium news, a newcomer to the sector, Askari Metals reported an extensive outcrop of lithium on its tenements in the Barrow Creek region of the Northern Territory, lifting the stock by 8c to 64c.

The nickel market continued to settle after last month’s near melt-down of the London Metal Exchange, though at $US15 a pound the steel and battery metal continues to trade at an enormously profitable level for producers as well as destabilising corporate deals.

The high metal price cast doubt over the proposed merger of Western Area and IGO with the original terms of the proposed deal which valued Western Area at $3.36 steamrolled by a rush up to $3.68 and a possible re-pricing or collapse given that Morgans, a stockbroking firm values Western Areas at $4.45.

IGO’s chief operating officer, Matt Dusci, told a battery metals conference that the nickel market was expected to return to normal but he added that there was no guarantee that the merger would proceed.

In other nickel news:

  • Mincor continued to receive strong investor support, adding 26c to $2.46, but did touch a 13-year high of $2.55 on Wednesday. RBC Capital Markets initiated coverage of Mincor with a buy tip and target price of $2.75.
  • Panoramic was also in demand after reporting a third nickel concentrate shipment from its Savannah mine in WA which help lift the stock by 8c to 38c just short of Macquarie Bank’s price tip of 40c, and
  • Charger Metals made a mid-week splash with a report which said the company had identified a copper and nickel target at its Coates project, close to the Gonneville discovery of Chalice mining as well as being the site of an abandoned vanadium mine. On the market, Charger added 15c to 89c.

Iron ore continued to trade at an elevated $US154 a tonne which help maintain interest in the sector though the big news among iron ore stocks was an $US800 million debt issue by Fortescue Metals Group to help fund its renewable energy projects, as well as a second issue of notes raising $US700 million for general corporate purposes.

Investors swarmed the offerings and piled into FMG shares which rose by $1.01 over the week to $21.96 but that move was swamped by two minnows, Legacy Iron (1.8c or 94% to 3.7c) and Hawthorn Resources (up 4.9c 60% to 13c) after inviting iron ore billionaire Gina Rinehart into their Mt Bevan project in WA.

Other market news and price movements of interest included:

  • New Century Resources added 13c to $2.07 after releasing an updated study on the proposed redevelopment of the Mt Lyell copper mine in Tasmania.
  • Agrimin said it had negotiated an offtake deal for potash from its Lake Mackay in the north of WA with Gavilon, a U.S. fertiliser company. On the market, Agrimin added 4.5c to 45c.
  • Belarox rose by 3.5c to $1.15 after reporting visible copper and zinc sulphides in the first hole at its Belara project in central NSW.
  • Tempest Minerals returned to earth after its stellar run up to 22c in late March after reporting encouraging mineralisation at its Orion discovery in WA. This week the stock lost 4.5c to 13c.
  • Andromeda was another loser this week, down 8.7c (47%) to 9.8c after releasing a definitive feasibility study into its Great White kaolin project in South Australia,
  • Strandline slipped 1.5c lower to 46c after announcing a $50 million capital raising to accelerate work on growth projects in Tanzania and Australia.
  • Pearl Gull Iron added 1.6c to 8.6c after reporting high grade iron ore at its historic Cockatoo Island project in the north of WA, including 56.9 metres at 68.9% iron from a depth of 81.2m, and
  • Sovereign Metals upgraded its Kasiya rutile resource in Malawi to 1.8 billion tonnes of material at a grade of 1.01% rutile for a contained 18 million tonnes of the titanium mineral. On the market, Sovereign added 3.5c to 75c.

Iluka Resources, a titanium minerals and zircon producer, led the way this week to the government cash trough, securing a $1.27 billion loan from the Australian Government for its earth refinery in WA.

Other government funding deals are expected to flow over the next few weeks, according to Iluka’s chief executive, Tom O’Leary, as pressure grows in the western world to counter China’s control of critical minerals and the Ukraine war threatens trade flows.

Investors initially welcomed the Iluka funding but their enthusiasm quickly waned, in line with skepticism among leading investment banks about the risks associated with complex mineral processing and the questionable benefits of getting into bed with government.

On the market, Iluka shares started the week with a bang, adding $1.04 (9%) in the days after the announcement to reach an all-time high of $12.60, when profit takers and doubts took over, pushing the stock back to $12.11.

Investment banks, while welcoming access to government funds to power the next phase of Iluka’s growth, are concerned about the technical hurdles ahead with rare earth refining a devilishly tricky business and for the potential for a logjam to develop as other rare earth projects also benefit from government support, including the Kalgoorlie refinery of Lynas Rare Earths.

Citi said the rare earth refinery was hard to value which is why it maintained a neutral rating on Iluka and set a price target of $10.50, down 12.7% on last sales while Morgan Stanley stuck with a price target of $9.75, down 19% on last sales.

Iluka’s rise and fall was against a background of growing uncertainty with three big negatives bearing down on financial markets:

  • Rising U.S. interest rates and a warning from the chief executive of JPMorgan Chase, Jamie Dimon, that “dramatically higher” rates are on their way as the U.S. central bank tries to crush inflation.
  • Soaring energy prices in Europe as it tries to cut itself off from Russian oil, gas and coal in a process which could tip the region into recession and
  • A continuation of draconian Covid-19 suppression measures in China which are killing economic growth.

Those factors can be seen at work in Australia with the broadest measure of the stock market, the all-ordinaries index, surging higher in the first half of the week before slumping back to where it started.

The metals and mining index performed a similar up/down dance while the gold index did the opposite, weak at first and then noticeably stronger as the bad news took its toll of investor confidence, sparking a chirpy gold-positive comment from Morgan Stanley which sees the potential for gold to climb back as high as $US2172 an ounce.

What caught the eye of Morgan Stanley analysts is the recent, albeit brief, inversion of yields on U.S. debt with the two-year bond yielding more than the 10-year, which is said to be “a potential signal for a higher gold price”, the bank said.

“If gold price forecasts for 2023 were to move higher and spot prices persist, there could be substantial upside risk to earnings for gold equities,” Morgan Stanley said.

DGO was the top local gold stock thanks to a share-swap takeover bid valued at $3.55 a share from Gold Road. On the market, DGO added 55c to $3.37 while Gold Road lost 14c to $1.50 in another fine example of buy the target, sell the bidder.

Gold Road’s interest in DGO almost certainly lies in its 14.4% stake in De Grey Mining and its world class Mallina project in the north of WA with a future move on De Grey highly likely though on the market this week De Grey slipped 1c lower to $1.17 despite Bell Potter tipping a future price of $1.72.

Other gold moves include Evolution down 22c to $4.22, Northern Star, down 53c at $10.16, and Genesis, up 13c to $1.80.

Mineral Resources roared back into the lithium market during the week with a report that it would start exporting from its mothballed Wodgina mine in WA from next month to catch the sky-high prices for the critical battery metal which J.P. Morgan, an investment bank, reckons could be in a state of perpetual deficit as demand for electric vehicles accelerates.

On the market, Mineral Resources added $6.87 (12.8%) to $60.25 seemingly on its way to the $66 price forecast from Citi.

Allkem, the merged Galaxy and Orocobre, was another lithium stock in strong demand after brokers attended an upbeat investor day which left banks scrambling to upgrade their spread sheets and investment recommendations.

Citi boosted its price tip for Allkem from $13.42 to $15.50, an increase of 21% on yesterday’s closing price of $12.83. Bell Potter went in even harder with a price forecast of $18.05.

In other lithium news, a newcomer to the sector, Askari Metals reported an extensive outcrop of lithium on its tenements in the Barrow Creek region of the Northern Territory, lifting the stock by 8c to 64c.

The nickel market continued to settle after last month’s near melt-down of the London Metal Exchange, though at $US15 a pound the steel and battery metal continues to trade at an enormously profitable level for producers as well as destabilising corporate deals.

The high metal price cast doubt over the proposed merger of Western Area and IGO with the original terms of the proposed deal which valued Western Area at $3.36 steamrolled by a rush up to $3.68 and a possible re-pricing or collapse given that Morgans, a stockbroking firm values Western Areas at $4.45.

IGO’s chief operating officer, Matt Dusci, told a battery metals conference that the nickel market was expected to return to normal but he added that there was no guarantee that the merger would proceed.

In other nickel news:

  • Mincor continued to receive strong investor support, adding 26c to $2.46, but did touch a 13-year high of $2.55 on Wednesday. RBC Capital Markets initiated coverage of Mincor with a buy tip and target price of $2.75.
  • Panoramic was also in demand after reporting a third nickel concentrate shipment from its Savannah mine in WA which help lift the stock by 8c to 38c just short of Macquarie Bank’s price tip of 40c, and
  • Charger Metals made a mid-week splash with a report which said the company had identified a copper and nickel target at its Coates project, close to the Gonneville discovery of Chalice mining as well as being the site of an abandoned vanadium mine. On the market, Charger added 15c to 89c.

Iron ore continued to trade at an elevated $US154 a tonne which help maintain interest in the sector though the big news among iron ore stocks was an $US800 million debt issue by Fortescue Metals Group to help fund its renewable energy projects, as well as a second issue of notes raising $US700 million for general corporate purposes.

Investors swarmed the offerings and piled into FMG shares which rose by $1.01 over the week to $21.96 but that move was swamped by two minnows, Legacy Iron (1.8c or 94% to 3.7c) and Hawthorn Resources (up 4.9c 60% to 13c) after inviting iron ore billionaire Gina Rinehart into their Mt Bevan project in WA.

Other market news and price movements of interest included:

  • New Century Resources added 13c to $2.07 after releasing an updated study on the proposed redevelopment of the Mt Lyell copper mine in Tasmania.
  • Agrimin said it had negotiated an offtake deal for potash from its Lake Mackay in the north of WA with Gavilon, a U.S. fertiliser company. On the market, Agrimin added 4.5c to 45c.
  • Belarox rose by 3.5c to $1.15 after reporting visible copper and zinc sulphides in the first hole at its Belara project in central NSW.
  • Tempest Minerals returned to earth after its stellar run up to 22c in late March after reporting encouraging mineralisation at its Orion discovery in WA. This week the stock lost 4.5c to 13c.
  • Andromeda was another loser this week, down 8.7c (47%) to 9.8c after releasing a definitive feasibility study into its Great White kaolin project in South Australia,
  • Strandline slipped 1.5c lower to 46c after announcing a $50 million capital raising to accelerate work on growth projects in Tanzania and Australia.
  • Pearl Gull Iron added 1.6c to 8.6c after reporting high grade iron ore at its historic Cockatoo Island project in the north of WA, including 56.9 metres at 68.9% iron from a depth of 81.2m, and
  • Sovereign Metals upgraded its Kasiya rutile resource in Malawi to 1.8 billion tonnes of material at a grade of 1.01% rutile for a contained 18 million tonnes of the titanium mineral. On the market, Sovereign added 3.5c to 75c

Iluka Resources, a titanium minerals and zircon producer, led the way this week to the government cash trough, securing a $1.27 billion loan from the Australian Government for its earth refinery in WA.

Other government funding deals are expected to flow over the next few weeks, according to Iluka’s chief executive, Tom O’Leary, as pressure grows in the western world to counter China’s control of critical minerals and the Ukraine war threatens trade flows.

Investors initially welcomed the Iluka funding but their enthusiasm quickly waned, in line with skepticism among leading investment banks about the risks associated with complex mineral processing and the questionable benefits of getting into bed with government.

On the market, Iluka shares started the week with a bang, adding $1.04 (9%) in the days after the announcement to reach an all-time high of $12.60, when profit takers and doubts took over, pushing the stock back to $12.11.

Investment banks, while welcoming access to government funds to power the next phase of Iluka’s growth, are concerned about the technical hurdles ahead with rare earth refining a devilishly tricky business and for the potential for a logjam to develop as other rare earth projects also benefit from government support, including the Kalgoorlie refinery of Lynas Rare Earths.

Citi said the rare earth refinery was hard to value which is why it maintained a neutral rating on Iluka and set a price target of $10.50, down 12.7% on last sales while Morgan Stanley stuck with a price target of $9.75, down 19% on last sales.

Iluka’s rise and fall was against a background of growing uncertainty with three big negatives bearing down on financial markets:

Rising U.S. interest rates and a warning from the chief executive of JPMorgan Chase, Jamie Dimon, that “dramatically higher” rates are on their way as the U.S. central bank tries to crush inflation.

Soaring energy prices in Europe as it tries to cut itself off from Russian oil, gas and coal in a process which could tip the region into recession and

A continuation of draconian Covid-19 suppression measures in China which are killing economic growth.

Those factors can be seen at work in Australia with the broadest measure of the stock market, the all-ordinaries index, surging higher in the first half of the week before slumping back to where it started.

The metals and mining index performed a similar up/down dance while the gold index did the opposite, weak at first and then noticeably stronger as the bad news took its toll of investor confidence, sparking a chirpy gold-positive comment from Morgan Stanley which sees the potential for gold to climb back as high as $US2172 an ounce.

What caught the eye of Morgan Stanley analysts is the recent, albeit brief, inversion of yields on U.S. debt with the two-year bond yielding more than the 10-year, which is said to be “a potential signal for a higher gold price”, the bank said.

“If gold price forecasts for 2023 were to move higher and spot prices persist, there could be substantial upside risk to earnings for gold equities,” Morgan Stanley said.

DGO was the top local gold stock thanks to a share-swap takeover bid valued at $3.55 a share from Gold Road. On the market, DGO added 55c to $3.37 while Gold Road lost 14c to $1.50 in another fine example of buy the target, sell the bidder.

Gold Road’s interest in DGO almost certainly lies in its 14.4% stake in De Grey Mining and its world class Mallina project in the north of WA with a future move on De Grey highly likely though on the market this week De Grey slipped 1c lower to $1.17 despite Bell Potter tipping a future price of $1.72.

Other gold moves include Evolution down 22c to $4.22, Northern Star, down 53c at $10.16, and Genesis, up 13c to $1.80.

Mineral Resources roared back into the lithium market during the week with a report that it would start exporting from its mothballed Wodgina mine in WA from next month to catch the sky-high prices for the critical battery metal which J.P. Morgan, an investment bank, reckons could be in a state of perpetual deficit as demand for electric vehicles accelerates.

On the market, Mineral Resources added $6.87 (12.8%) to $60.25 seemingly on its way to the $66 price forecast from Citi.

Allkem, the merged Galaxy and Orocobre, was another lithium stock in strong demand after brokers attended an upbeat investor day which left banks scrambling to upgrade their spread sheets and investment recommendations.

Citi boosted its price tip for Allkem from $13.42 to $15.50, an increase of 21% on yesterday’s closing price of $12.83. Bell Potter went in even harder with a price forecast of $18.05.

In other lithium news, a newcomer to the sector, Askari Metals reported an extensive outcrop of lithium on its tenements in the Barrow Creek region of the Northern Territory, lifting the stock by 8c to 64c.

The nickel market continued to settle after last month’s near melt-down of the London Metal Exchange, though at $US15 a pound the steel and battery metal continues to trade at an enormously profitable level for producers as well as destabilising corporate deals.

The high metal price cast doubt over the proposed merger of Western Area and IGO with the original terms of the proposed deal which valued Western Area at $3.36 steamrolled by a rush up to $3.68 and a possible re-pricing or collapse given that Morgans, a stockbroking firm values Western Areas at $4.45.

IGO’s chief operating officer, Matt Dusci, told a battery metals conference that the nickel market was expected to return to normal but he added that there was no guarantee that the merger would proceed.

In other nickel news:

Mincor continued to receive strong investor support, adding 26c to $2.46, but did touch a 13-year high of $2.55 on Wednesday. RBC Capital Markets initiated coverage of Mincor with a buy tip and target price of $2.75.

Panoramic was also in demand after reporting a third nickel concentrate shipment from its Savannah mine in WA which help lift the stock by 8c to 38c just short of Macquarie Bank’s price tip of 40c, and

Charger Metals made a mid-week splash with a report which said the company had identified a copper and nickel target at its Coates project, close to the Gonneville discovery of Chalice mining as well as being the site of an abandoned vanadium mine. On the market, Charger added 15c to 89c.

Iron ore continued to trade at an elevated $US154 a tonne which help maintain interest in the sector though the big news among iron ore stocks was an $US800 million debt issue by Fortescue Metals Group to help fund its renewable energy projects, as well as a second issue of notes raising $US700 million for general corporate purposes.

Investors swarmed the offerings and piled into FMG shares which rose by $1.01 over the week to $21.96 but that move was swamped by two minnows, Legacy Iron (1.8c or 94% to 3.7c) and Hawthorn Resources (up 4.9c 60% to 13c) after inviting iron ore billionaire Gina Rinehart into their Mt Bevan project in WA.

Other market news and price movements of interest included:

New Century Resources added 13c to $2.07 after releasing an updated study on the proposed redevelopment of the Mt Lyell copper mine in Tasmania.

Agrimin said it had negotiated an offtake deal for potash from its Lake Mackay in the north of WA with Gavilon, a U.S. fertiliser company. On the market, Agrimin added 4.5c to 45c.

Belarox rose by 3.5c to $1.15 after reporting visible copper and zinc sulphides in the first hole at its Belara project in central NSW.

Tempest Minerals returned to earth after its stellar run up to 22c in late March after reporting encouraging mineralisation at its Orion discovery in WA. This week the stock lost 4.5c to 13c.

Andromeda was another loser this week, down 8.7c (47%) to 9.8c after releasing a definitive feasibility study into its Great White kaolin project in South Australia,

Strandline slipped 1.5c lower to 46c after announcing a $50 million capital raising to accelerate work on growth projects in Tanzania and Australia.

Pearl Gull Iron added 1.6c to 8.6c after reporting high grade iron ore at its historic Cockatoo Island project in the north of WA, including 56.9 metres at 68.9% iron from a depth of 81.2m, and

Sovereign Metals upgraded its Kasiya rutile resource in Malawi to 1.8 billion tonnes of material at a grade of 1.01% rutile for a contained 18 million tonnes of the titanium mineral. On the market, Sovereign added 3.5c to 75c.