A mid-week warning from the Bank of America (BofA) that the U.S. stock market has wandered into a bear trap ruffled a few feathers but not enough to deter optimists who saw signs of an easing in the Ukraine war as reason to keep on buying.

It was a similar story in Australia where the all-ordinaries index rose by an agreeable 1.7% over the week, taking the gain for the past month to an impressive 7%. The metal and mining index did even better, up 4.8% this week and 10% for the month.

Gains like that are not to be sneezed at because they point to solid trading profits, with much more being made at the small end of the market where a series of promising copper discoveries ignited a number of stocks, including:

  • Culpeo, which reported encouraging copper assays from its Lana Corina project in Chile, rose by 15c (136%) to 26c.
  • Recharge, intersected significant copper mineralisation at its Brandy Hill South project in WA, adding 28.5c (224%) to 41c, and
  • Tempest, made what could be a significant copper find at its Meleya project in WA, rocketing up by 13c (326%) to 18c.

Those remarkable rises reinforced the strength of interest in copper as a key metal in energy transition which also came through in the latest China Copper End-Use Tracker of Citi.

The bank’s copper tracking tool measured a 4.4% increase in the country’s copper consumption in the first two months of year, driven by a 20% increase in demand from the automotive sector as manufacturing switches to copper heavy electric vehicles.

Other copper moves this week included:

  • Aeris Resources, up 2c to 16c thanks to discovery news from its Avoca Tank project in NSW, with analysts at the stockbroking of Bell Potter tipping a future price of 21c, and
  • QMines, up 5c to 29c as drilling ramps at its Mt Chalmers copper/gold project in Queensland, with Shaw and Partners tipping a future share price 74c.

Other sectors of the market also performed well but it was not easy to reconcile a rising market with the BofA bear trap warning which is based on a view that the inversion of the bond market (which means short-dated securities are paying a higher interest rate than long dated) was the classic hallmark of an approaching correction, or even a recession.

While that red flag might only apply to the over-cooked U.S. market there was an Australian red flag waved during the week by the Australian Government’s Treasury Department which incorporated dramatically lower commodity prices in this week’s budget papers.

Though the Treasury is notoriously conservative (and often wrong with commodity pricing) a potential 74% fall in the metallurgical coal price from a current $US512 a tonne to $US130/t by the September quarter is eye-catching, as is a 63% fall in the iron ore price from $150/t to $US55/t.

The iron ore price tip jars with a more optimistic $US125/t in this week’s commodity price update from Goldman Sachs and sits interestingly alongside solid share price rises this week by iron ore miners such as Champion Iron, up 64c to $7.74. Fenix, up 2.5 to 27c, and Fortescue Metals, up $1.56 to $20.62, taking FMG’s rise over the past six months to $5.69 (38%).

Local investors shrugged off the major iron ore news of the week which was a fresh attempt by the government of Guinea to kick start its long frozen Simandou mine with a number of observers throwing cold water on the plan in a notoriously corrupt country.

FMG’s share price increase might also have been influenced by the latest razzle-dazzle from the company’s chairman, Andrew Forrest, who announced a deal with Germany to provide it was hydrogen to replace Russian gas, with providing details of when or whether it would profitable.

Banks and brokers had a busy week with a series of successful fund raisings which underpin the high level of Australian investor confidence that appears to contradict Treasury’s gloom and BofA’s foreboding implied by its yield inversion analysis.

Among the deals completed were:

  • Macarthur Minerals receiving firm commitments of $7.5 million to help fund work at its Lake Giles iron ore project in WA.
  • Hastings Technology Metals finalising a $40 million placement for work on its Yangibana rare earths project, also in WA.
  • Carnarvon Energy raised $70 million to fund its share of the Dorado oilfield development off the WA coast.
  • Chesser Resources raising $12 million for its Diamba Sud gold project in Senegal.
  • Great Boulder raising $7 million to accelerate work on its Side Well gold project in WA.
  • Arizona Lithium raised $32.5 million to fast-track work on its Big Sandy project in the U.S, and
  • Aston Minerals raising $29.25 million for its Bardwell nickel and cobalt project in Canada.

Uranium continued to power up as Europe in particular tries to wean itself off a diet of Russian oil and gas with Paladin capitalising on the returning interest in the nuclear fuel, announcing a $215 million capital raising at 72c with the new shares rubbing 4.5c off the market price of the stock which dipped to 79c.

Other U-news include Boss Energy reporting that it was poised to make a final investment decision on its Honeymoon project in South Australia with the stock slipping 20c lower to $2.2, while Deep Yellow and Vimy announced the terms of their merger which rubbed 1c off Deep Yellow while Vimy added 1.2c to 27c.

Lithium and graphite stocks had a solid week as sales of electric vehicles continue to accelerate, partly because of a soaring oil price caused by the Ukraine war. There was also an unexpected boost from the influential Lex column in London’s Financial Times newspaper which said car makers were scrambling for battery metal supplies after the experience of the semi-conductor shortage.

Core Lithium led the way among lithium stock with a rise of 18c to $1.39 after reporting a fresh batch of excellent drill results from its Finniss project in the Northern Territory with a best hit of 24 metres at 2.24% lithium oxide.

Other battery metal moves included:

  • Firefinch, up 8.5c to $1.05 after formalizing a $US170 million funding package with China’s Ganfeng for the Goulamina project in Mali.
  • Bulletin Resources up 4c to 25c after reporting encouraging assays from its Ravensthorpe project in WA with rock chip samples up to 7.04% lithium oxide.
  • Talga was the pick of the graphite stocks, jumping 26c higher to $1.70 after announcing the start of production at its Lulea plant in northern Sweden.

Gold stocks were largely subdued this week as the price of the metal/currency slipped $US20 an ounce lower to $US1916/oz, leaving most of the lifting to exploration and discovery news which was led by:

  • Siren Gold, up 14c (44%) to 48c after reporting bonanza grades from drilling at its Alexander River project in New Zealand with a best hit of 2.5m at 358.2 grams of gold a tonne, with a core of 0.6m of quartz reef grading 1460g/t (47 ounces to the tonne).
  • Genesis Minerals, up 10c to $1.63 after reporting a 400,000oz resource increase to two million ounces at its Leonora gold project in WA.
  • Tesoro Resources, up 2.2c to 10c after reporting high grade assays from drilling at its El Zorro project in Chile with a best intersection of 7m at 66.1g/t, and
  • Kingston Resources, up 1c to 17c after announcing the successful ramp up of trailing retreatment operations at its Mineral Hill project in NSW with Canaccord Genuity tipping a future share price of 70c.

Other news and market moves of interest included:

  • Bell Potter launching a new Exploration Tracker report which included a number of ambitious share targets such as Chalice Mining rising from its current $7 to $11.73. Tulla Resources to rise from 60c to $1.06 and Liontown, up from $1.90 to $3.06.
  • Morgan Stanley in its March quarter reports preview singled our Northern Star, Newcrest, Independence and Mineral Resources as the companies most likely to report the biggest lifts in production.
  • Lunnon Metals rose by 12c on Thursday to 99c after reporting the start of drilling the deep Kenilworth hole at the St Ives mining centre in what was another demonstration of speculators piling into a stock when drilling starts – better to travel and all that!