Dundas Minerals initially led explorers higher with a tantalising report of a whopping 358 metres of mixed mineralisation which contained encouraging signs of silver, copper, cobalt and quartz veins at its Central target in WA’s Fraser Range.

But initial enthusiasm faded after the company was encouraged by the ASX to produce more detail about hand-held X-Ray Fluorescence field results with preliminary assays appearing to fall short of the XRF readings.

A second report rubbed the gloss off Dundas which had rocketed up by 60c to $1.30 on Tuesday before crashing back to 53c, down 16c over the week, a rise and fall which highlighted the risks of reporting unreliable XRF readings.

Carnaby Resources picked up where Dundas left off with thick and rich copper assays from its Mt Hope project in Queensland, including 60m at 3.1% copper from a depth of 170m, followed by its own XRF blinder of 7.6% copper over 16m from 161m.

At any other time Carnaby would probably have done better than its 14c rise to 92c (with a peak trade at $1) but the mention of XRF “assays” – which technically they are not – appears to have alarmed some investors.

After the exploration news it was local deals involving international car makers chasing metals needed in their electric vehicle divisions which boosted two small explorers.

Queensland Pacific Metals added 2c to 16c after announcing a strategic collaboration with the U.S. car giant General Motors over its Townsville Energy Chemicals Hub in Queensland, while GME Resources rose by 1.5c to 14c after signing a non-binding memo for future battery metals with European car maker Stellantis.

Neither the GM nor Stellantis deals are big in dollar terms, but they are significant because it adds to a view that U.S. and European car makers are getting desperate about battery metals because they’ve left all the early running to Chinese manufacturers.

Lithium, the primary battery metal which is fast becoming a major Australian export, was also in the news thanks to a high-profile site tour by Mineral Resources of its WA lithium assets and a disturbing report on the lithium market from big name investment bank Morgan Stanley.

According to a research report sent to clients yesterday (Thursday) the price of lithium carbonate in China for material supplied by Chile’s leading producer, SQM, has dropped from US$70,000 a tonne to US$55,000/t.

The cause is not fully understood but could be a combination of rising supply meets flattening demand and the quality of SQM’s brine-sourced lithium. The bank has SQM as a sell and is warning about a more widespread lithium correction next year.

The MinRes tour was to promote an expanding lithium business but all that bankers wanted to hear was news about a possible lithium spin-off which the company is said to be working on, but with little new revealed the result was a $2.59 fall in the MinRes share price to $69.72 despite Macquarie Bank refreshing a buy tip and share price forecast of $98.

What’s driving the spin-off plans of the founder and major shareholder of MinRes, Chris Ellison, is that his company, which has a mixed bag of iron ore, engineering, and gas assets, as well as lithium, is trading at a discount to Pilbara Minerals, a pure play lithium stock working alongside his Wodgina mine in WA’s Pilbara.

Allkem was the pick of the lithium producers this week, but even it fell by 14c to $14.03 while Core slipped 2c lower to $1.13 and Global lost 2c to $2.31.

Other lithium moves included Pilbara, down 37c to $4.97. Liontown, down 8c to $1.52. Azure Minerals went the other way, adding 2.5c to 23c after reporting high grade (1.62%) lithium from surface samples collected at the Andover project near Roebourne in the north-west of WA.

Overall, the ASX lost another 2% this week as investors continued to take cover from the pressure caused by rising interest rates with the Australian stock market fall mirroring a 2.5% decline in the U.S. market.

Gold, which had been sold off like most other assets, started to recover. After hitting a mid-week bottom of US$1661 an ounce, gold crept back up to US$1669/oz, though for Australian producers the price was up A$2/oz thanks to the exchange rate effect of a rising U.S. dollar (or falling A-dollar, take your pick).

Leading gold producers were mixed with Evolution continuing its alarming slide, down another 19c this week to $1.93, taking its loss since a mid-April peak of $4.68 to $2.75 (58%), while Northern Star added 50c this week to $8.12.

Small golds had a reasonable week with Hamelin adding 2c to 16c after reporting encouraging assay results from drilling at its Hutch’s Find project in the West Tanami of WA where a best hit of 12 metres at 4.5 grams of gold a tonne was recorded from just 6m.

Diablo Resources added 0.5c to 5.7c after reporting encouraging copper and gold assays from surface samples at its Devils Canyon property in the U.S. while Auteco rose by 0.4c to 4c after reporting high grade samples from at its Pickle Crow project in Canada, while Shaw Stockbroking sees the stock heading up to a target price of 21c.

In other whole-of-market news, Goldman Sachs and Citi continued to ring the alarm bell about what to expect next year as recession bites in Europe and then spreads around the world.

“The GS commodity team believes demand in Europe is suffering a sudden negative demand shock with the industrial supply chain currently undergoing an aggressive destocking cycle given the extreme uncertainties over demand conditions into the (northern) winter,” Goldman Sachs said.

Citi was on the same page, telling clients that “metals demand is on the precipice as a winter crunch looms.” The bank extended its warning to China and the U.S. where demand appears to be stalling.

More pressure can be expected across financial markets over the next few weeks as the U.S. central bank gets ready for another rate rise with the debate focused on whether it will be another 0.75% or an easing back to 0.5%. Either way it means money is being pulled out of the system rather than injected into it which can only mean falling asset values.

Other news and market moves this week, mainly down, included:

  • Aurelia Metals being heavily sold. Down by 8.8c (41%) to 13c when it frightened investors with plans for a $60 million capital raising to fund its Federation zinc mine in NSW with a feasibility study showing a solid 71% internal rate of return at spot market metal price forecasts but a less attractive IRR of 37% at consensus metal price forecasts.
  • Alligator Energy slipped 0.2c lower to 5.4c despite interest building as it starts drilling at the highly prospective Nabarlek North uranium project in the Northern Territory.
  • Hastings Technology Metals clawed back 3c yesterday but was still down 33c at $3.27 despite an upgrade to its Yangibana rare earth project in WA. Macquarie is sticking with its buy tip and price target of $6.20.
  • Fortescue Metals was another stock to perform well yesterday but ended down over the week. The iron ore miner and green energy promoter slipped 44c lower to $17.09. Champion Iron was also sold down, losing 33c to $4.96, and
  • Galileo Mining failed to impress with the latest drill results from its Callisto project near Norseman in WA, falling by 5c to $1.24 despite reporting assays up to 11m at 1.63 3E (palladium, platinum and gold).