Boutique advisory firm Wilsons told clients yesterday that a three-year downturn was ending as positive momentum returned to the mining sector “underpinning what could be the early stage of a significant resources upgrade cycle”.

A hint of what that means has been evident on the Australian stock exchange over the past four weeks with the broad-based metals index up 5.5%, easily outstripping the all ordinaries which is down 2.3%.

The mining revival can also be measured through a 9% increase in the copper price over the last four weeks, a rise slightly better than gold, which is up 6%.

Copper traded up to a record in London on Wednesday of US$11,487 a tonne, but not in New York, where the record of US$12,827/t was set in the early days of the tariff assault unleashed by the President, Donald Trump.

Other metals are also playing catch-up with gold. Lithium over the past month has risen by 16%. Platinum is up 9%. Tin has risen by 8%, and even iron ore is up 3%, defying forecasts of a collapse once the new Simandou mine started exporting from Guinea.

Four key factors support the optimism of the normally cautious Wilsons which recently merged with the more aggressive Canaccord Genuity. They are:

  • The “onshoring” of supply chains and build-out of strategic stockpiles as the western world responds to China’s commodity dominance.
  • Growth in data centre construction which is boosting demand for base metals, especially copper and critical metals used in modern technologies.
  • Re-armament of the western world, especially members of the NATO alliance and the U.S. and,
  • Energy transition which is driving structural demand for critical metals needed in the electrification of everything.

A fifth factor which could supercharge the resources revival in the new year is the potential for China to unleash a fresh round of economic stimulus once the U.S. settles its tariff policies.

U.S. investment bank Citi threw its weight behind the base metals revival theme with a focus on the top end of the industry where copper has dragged all of the big names into a race for top dog status.

BHP’s latest failed attempt to merge with Anglo American is a measure of the corporate copper craving which dominated capital markets meetings this week of both Glencore and Rio Tinto with shareholders of Canada’s Teck Resources voting next week on a merger with Anglo.

Glencore, according to Citi, is the best bet among the copper mining majors with the merged AngloTeck a likely beneficiary of copper tailwinds while BHP and Rio Tinto need a boost from iron ore to outperform.

Interestingly, iron ore could emerge as a surprise winner despite the current negative sentiment with the price holding at an elevated US$104 a tonne on the Singapore Exchange.

What iron ore critics might be missing is a combination of four price boosters, a stronger than expected global economy, a weaker U.S. dollar, increasing steel production in emerging Asia, and faster than forecast depletion of existing mines with a downgrade in the quality of Australian ore a significant event.

Fortescue has been the big winner from the surprising strength in iron ore, rising this week by 66c (3%) to $21.90 taking its rise over the past month to $1.41 (6.9%).

Other iron ore-exposed stocks joined the rally with local mining minnow Fenix up 4c to 44c and Canadian focused CIA, up 43c to $6.10.

Big moves by BHP and Rio Tinto underpinned the case for iron ore staying stronger for longer. BHP this week rose by $3.14 (7.6%) to $44.50 and Rio Tinto increased by $6.91 (5.3%) to $138.88.

Gold, as has been the case for the past three years, was a strong performer, edging by US$25 (0.5%) an ounce to US$4211/oz, but outperformed by silver, its cheaper sister, which rose by US$4.50oz (8%) to US$58.42/oz.

Polymetals was the big silver winner locally, rising by 13c to $1.08 despite raising $34.4 million through a share issue priced at 87c to fund work on its Endeavor silver/zinc mine in NSW while West Coast Silver added 4c to 20c as its plans to restart mining at its Elizabeth Hill mine in WA.

Other gold and silver news and share price moves included:

  • Predictive Discovery, up 11c (18.4%) after Perseus topped an earlier takeover offer from Robex Resources. Perseus lost 12c to $5.47 as some investors expressed concern about their company overpaying. Robex lost 54c (10.5%) to $4.61 as other investors saw Predictive as the one that got away.
  • Ausgold rose by 6c to 91c as interest grows in its Katanning project in the south of WA. Bell Potter reckons the stock is heading for $1.60.
  • Greatland Resources added 83c (11%) to $8.24 after the release of a feasibility study into the redevelopment of the Telfer goldmine in WA, incorporating the Havieron discover. CG Capital Markets reckons Greatland will rise to $10.65. Citi says $10.15, while Jarden is not convinced, setting a target price of $5.
  • Mt Gibson, renamed MGX Resources, rose by 1.2c to 38c after receiving foreign investment approval to buy a 50% stake in the Central Tanami gold project from Northern Star Resources which slipped 29c lower to $26.62.
  • Pantoro Gold lost 57c to $4.59 after announcing $129 capital million raising for work on its redevelopment of the Norseman goldfield in WA, and
  • Minerals 260, slipped 2.5c lower over the week to 37c though that fall should be seen against an 8.5c (30%) rise over the previous three weeks as investors rushed to get a slice of the company’s emerging Bullabulling project in WA.

FireFly Metals was the best of the copper stocks with a rise of 3.5c to $1.95, a move which needs to be seen in the context of a $139 million capital rise at $1.70 a share to fund an expansion of drilling at its Green Bay project in Canada.

All other copper-exposed stocks moved higher, some substantially. Sandfire traded up to an all-time high of $17.20 before easing to $17.06, up $1.51 (9.7%) over the week. 29Metals added 2.7c to 40c and Aeris put on 6.5c to 51c.

Vulcan was the lithium newsmaker after securing a US$2.6 billion funding package for its Lionheart project in Germany having already negotiated an offtake deal with car maker Stellantis. The size of the raising frightened investors who rubbed $1.89 (31%) off Vulcan’s share price which fell to $4.23.

Most other lithium stocks followed Vulcan down. Liontown lost 20c to $1.25 and PLS (the old Pilbara Minerals) fell by 22c to $3.74.

Other news and market moves of interest this week included:

  • WA bauxite explorer VBX shook off the lingering effects of a heavy sell-off last month to add 11c this week, returning to a price of 46c.
  • Sunrise Energy continued its powerful upward run, adding another 89c this week to trade at $7.07. The stock, which is heavily backed by co-chair billionaire Robert Friedland, was selling for 48c in June.
  • Mont Royal Resources rose by 6c to 31c after reporting progress on its Ashram monazite and rare earth project in Canada.
  • Deep Yellow rose by 6c to $1.68 after announcing the appointment of a new chief executive to replace uranium veteran John Borshoff. Boss Energy was another uranium stock on the rise, adding 12c to $1.67.
  • Talga said it was moving closer to commercial scale anode (graphite) production in Sweden, news which lifted the stock by 2c to 45c, and
  • NexGen Energy rose by 79c to $14.04 after reporting new high-grade uranium assays from its Patterson corridor project in Canada. Shaw and Partners reckon its heading up to $17.70.