Liontown, last year’s big loser with a 71% share price collapse, led the way up on Wednesday with a 20c (15%) jump to a two-month high of $1.52 after news that a syndicate of banks has agreed to a $550 million debt package for the Kathleen Valley mine in WA.

But as the dust settled on the Liontown deal, and a $20 million raising by Argentinian-focused Lake Resources, sellers returned to peel profits off the recovery or take the opportunity to quit stocks still burdened by a low lithium price.

By late yesterday, Liontown was back down to $1.32 and Lake had retreated from its midweek high of 11c to 8.6c.

A call of the Liontown card tells the story of a confused market, uncertain whether there’s a genuine recovery underway or a “head fake” as UBS warned last week when it said restocking of lithium by battery makers would boost the price followed by a fresh fall.

“This progress towards rebalancing the market could be transitory if price sentiment lifts too far too fast,” UBS said on March 6.

This week it was the turn of other investment banks to add their views to the lithium debate with Citi and Jarden sticking with sell advice on Liontown complete with sharply lower price tips of $1 and 91c respectively, capped by Jarden’s stinging headline, “Men at work: till the money runs out”.

Wilsons and Bell Potter went the other way with optimistic assessments of Liontown. Wilsons called the funding packaged “bridging the gap” and said the stock would rise to $1.85. Bell Potter said the funding provided “headroom” and gave investors longer-term confidence. Its price target is top of the pile at $1.90.

Goldman Sachs, just to complete the confused picture, likes the debt injection but sees the Liontown price only edging up to $1.45 – still 54% less than last year’s peak in mid-June of $3.15.

Pilbara Minerals was flat over the week at $4.07 but impressed analysts with the announcement of a pre-auction sale of a 5000-tonne cargo of 6% spodumene at an attractive price of US$1106 a tonne.

Copper joined the embryonic revival after reports appeared about potential production cuts at loss-making Chinese smelters followed by a US15 cents per pound rise in the price of the world’s most important industrial metal to a 11-month high of US$4.04/lb.

Big copper producers popped higher. Overseas, Teck Resources added 8%. Freeport rose by 7.8% and First Quantum gained 10.5%.

Locally it was the turn of BHP and Rio Tinto to be driven by their copper assets after years of being dominated by iron ore. BHP rose by $1.15 yesterday to $43.10. Rio Tinto added $3.41 to trade at $120.36.

Smaller copper stocks also did well. Coda added 1.5c to 12c after releasing a positive report on the economics of its Emmie Bluff project in South Australia. Aeris added 1c to 12c and Metals Acquisition rose by $1 to $19.80.

The sharp rise in the copper price, though it has been expected as demand starts to overwhelm supply, caught out investment banks such as Jarden which last week downgraded Sandfire to sell with a price target of $6.50 only to see the stock rise by 34c this week to $8.37.

Other copper moves included Cyprium, up 0.5c to 2.1c. Nimy, down 1c to 7c, and Resource Mining, up 1c (60%) to 2.4c after reporting high grade surface samples at its Mpanda project in Tanzania with a best assay of 13.58% copper.

Gold’s mad dash to an all-time high last week of US$2190.94 an ounce ran out of puff this week with the price fading to a still-impressive US$2173/oz, with the Australian gold price at A$3280/oz.

What next for gold is a question which this week tested analysts at ANZ Bank while their colleagues at Morgan Stanley wondered when the share prices of goldmining stocks might catch up with the underlying price of the metal they produce.

ANZ’s view was that a pull back in gold is likely in the short term as its recent rise had “surpassed macroeconomic and geopolitical developments”. It reckons the price will slip back to US$2100/oz.

Morgan Stanley sees a different event developing and that’s a strong rise by gold equities as they chase the gold price with a survey of gold stocks showing that they have been, “underperforming in the last three years compared with both their 23 year and 10-year average”.

What’s held equity prices down, according to Morgan Stanley, is the effect of inflation on operating costs which has “compressed margins”, but that deadweight on profits could be lifting.

“With inflation easing across the mining sector we see potential for margin expansion as the gold price benefits from interest rate cuts this year,” the bank said.

Also weighing on the gold price is the effect on retail buyers with Reuters reporting midweek that a visit to Dubai’s gold bazaar “turned into a window shopping experience” with buying left to tourists as more serous buyers are pushed to sidelines by high prices.

News and share prices moves among the gold stocks this week included:

  • Bellevue, up 6c to $1.63 as it lifts production with RBC Capital Markets tipping a target price of $1.80.
  • Capricorn Metals down 31c to $4.89 after it reported heavy rain across inland WA had flooded workings. Gold Road was also hit by weather, shedding 7c to $1.58.
  • Northern Star, which is also active in the rain affected areas, lost 32c to $14.04 while Evolution, which is less exposed, added 10c to $3.40.
  • Ramelius rose by 4c to $1.61 after reporting a 10-year mine plan for its Mt Magnet operations in WA, and
  • Aurum Resources gained 3c to 26c after reporting high grade drilling results from its Boundiali project in Ivory Coast including a best hit it 2.15 grams of gold a tonne over a 73m intersections starting at 172m.

Uranium stocks were weighed down by the fall in the price of their metal to US$93.50/lb, to now be down 12% over the last month.

Most price moves by uranium stocks were modest. Boss eased back by 3.5c to $4.56. Paladin was off 5c at $1.21 and Deep Yellow lost 7.5c to $1.15 after announcing a $220 million capital raising to shift its Tumas project in Namibia towards production.

Graphite stocks, after years in the shadow of the lithium sector, had another solid week, led by Kingsland which rose by 4.5c to 28c after it reported Australia’s biggest graphite resource at its Leliyn project in the Northern Territory.

Ecograf also moved higher after reporting a 127% increase in the graphite resource at its Epanko project in Tanzania, while Syrah added 1c to 70c even as it returned to the capital raising trough for another $98 million to fund its operations.

Other price moves and news came from a smorgasbord of stocks, mainly in secondary metals, including:

  • Australian Pacific Coal, up 3.3c (55%) to 9.2c after reporting the placement of long lead orders for equipment ahead of the restart at its Dartbrook mine in NSW.
  • Group 6 Metals rose by 1.3c to 5.8c after announcing that said its Dolphin tungsten mine on King Island off Tasmania was exceeding expectations.
  • Morgan Stanley initiated coverage of Lynas Rare Earths with a sell recommendation and price target of $5 which helped the stock fall by 33c to $5.78.
  • Image Resources rose by 1.1c to 7c after reporting that environmental authorities had approved its plan to start the Atlas mineral sands mine north pf Perth.
  • WA1 Resources fell by $1.60 to $11.68 despite a report from Bell Potter which said the Luni niobium project could be a globally significant development.
  • Sky Metals fell 1c to 3.4c after announcing a $4.2 million capital raising to fund its Tallebung tin project in NSW.
  • Jupiter Mines added 1c to 18c after announcing positive progress with its plans to produce high purity manganese sulphate.
  • Nordic Nickel was an outlier in the nickel sector with a rise of 2.5c to 19c after announcing a resource increase at its Hotinvaara project in Finland.
  • Highfield Resources rose by 1c to 44c after announcing the appointment of a contractor to dig a decline at its Muga potash project in Spain, and
  • Burgundy Diamond Mines rose by 0.5c to 20c after announcing a change to finance arrangements linked to the purchase of the Ekati mine in Canada. Bell Potter reckons Burgundy will rise to 40c.