Investors will have to wait another six-to-eight weeks for assays from drilling at Kaoko’s Chalkos project in the south-west African country of Namibia but the early signs are encouraging.
The details of what Kaoko reported are important but so is the wealth-creation effect of discovery at a time of strong demand for commodities which can be overlooked by the never-ending Iran war, high oil prices, and the inability of governments to stop printing money.
Led by successful project developer Mark Thomson (Talga and Catalyst), Kaoko reported intersections of up to 60 metres of visible copper mineralisation, starting just 36m from the surface in the first hole drilled at Chalkos which has copper and silver as the targets.
A full suite of brightly coloured copper mineralisation, including chalcocite, malachite, cuprite, and chalcopyrite, has been identified in core from a pair of scissor holes, drilled to help map the discovery.
The company said the core had only been assessed visually, but investors with a little geological knowledge would love to run a hand-held Xray Fluorescence (XRF) gun over what the company revealed in photos from the field – not that stock exchange regulations would permit the publication of any readings.
Until this week Kaoko had attracted little investor attention but a steady rise from 36c on listing day in May to 74c early this week was a hint of growing interest which was followed by price explosion to $2.44.
The copper price, which continues to trade at an elevated US$6.50 a pound, helped Kaoko and other stocks exposed to copper as it outperforms gold which was sold down early in the week as interest rate records were being broken.
Deepening concern that governments, including Australia’s, have lost control of their budgets can be seen in the bond market where the yield on U.S. 30-year bonds hit a 20-year high of 5.28% and the 10-year yield rose to 4.8% from 3.8% in May.
The yield on Australian 10-year bonds reached a record 5.22% on Wednesday, piling pressure on the government which is struggling to sell its budget and tax policy to a nervous electorate.
Gold, the go-to asset in a financial crisis, was hit by the latest round of interest rate increases but showed signs of stabilising as its value was recognised as a reserve currency when paper currencies are falling and central banks re-confirm their faith in gold.
Leading investment bank Morgan Stanley told clients that it expects gold to recover from its current US$4408 an ounce to US$4450/oz and then back to US$5000/oz next year.
“Exchange-traded fund (ETF) demand has recovered with 70 tonne inflows in the July/August period following 93t outflows in May/June,” Morgan Stanley said.
“Central banks bought 345t in the first half of 2026, and we project 700t for full 2026 with 60t being acquired by China so far this year, and 82t by Poland”.
The rush by Poland into gold is a stark reminder of an earlier era when Europeans bought gold as an insurance policy against German aggression. Today, it’s insurance against a Russian invasion.
Another pointer to gold playing a role in the global debt/currency crisis brewing was a report that the Dutch central bank (known as DNB) had shifted 78t of gold out of New York to London, citing “increasing geopolitical unrest” – a polite way of saying the Dutch are losing trust (along with everyone else) in the U.S. Government.
Australian investors, already skittish after two interest rate rises and broken tax promises, could face another round of rate rises as the Reserve Bank tries to slow the inflation driven economy.
Big ETF manager Global X said during the week that the central bank faces “an ugly policy dilemma” of having to raise rates as soon as later this month while another fund specialist VanEck reckons there are two rate rises coming.
Gold stocks, after a sell-off early in the week, regained lost ground with the ASX gold index rising by 3% yesterday (Thursday) to end the week down 5%.
Potential takeover target Catalyst Metals led the way among gold stocks with a rise of 28c to $6.80 but could do much more if Bell Potter is correct with a price target of $12.80 and projected profit for the current financial year of $295 million.
Other gold moves (some effected by dividend payment dates) included Genesis, up 24c to $8.35. Northern Star, down 55c to $23.10. Greatland, down 70c to $11.27 and Waratah, up 5c to 60c.
Andean Silver shook off the effects of a $40 million capital raise to add 8c to $2.53. Antipa rose by 3c to 61c after reporting an extension of gold and copper mineralisation at its Tim’s Dome project in WA, and Yandal Resources rose by 3c to 19c after announcing the appointment of high profile geologist Ed Eshuys as its new chairman.
While Kaoko’s discovery news dominated investors interest in copper, other stocks performed reasonably well in a tricky market.
29Metals continue its recovery with a rise of 2c of 36c after reaching a mid-week high of 39c. The stock fell to a 12-month low of 22c in July.
Aeris lost 2c to 49c but Morgans reckons it will rise to 63c. Bell Potter says 90c.
The Australian copper industry could also soon see a return to production of the once famous Mt Lyell mine in Tasmania after South Africa’s Sibanye-Stillwater said it would proceed with a redevelopment plan.
Lithium stocks, like the rest of the market, had a mixed week but could be set for a boost next week if big U.S. based lithium producer Albemarle fails in a bid to prevent a strike by workers at its projects in Chile.
A workforce vote on Wednesday was 97% in favour of industrial action which now heads for arbitration before a possible walk off.
Local share price moves by lithium producers included Liontown, up 2c to $1.26 after reporting an investment in a lithium brine project in Argentina. PLS added 4c to $5.30 and Vulcan slipped 6c lower to $2.64 after releasing the result of a feasibility study into a second lithium and geothermal power project in Germany.
Other news and markets moves of interest included:
- Vanadium Resources, up 1.6c (114%) to 3c after announcing progress in developing a vanadium/iron project in South Africa.
- Boss Energy leading a stronger uranium sector with a rise of 7c to $1.42. Morgan Stanley sees Boss rising to $1.65 Paladin also performed well with a 21c increase to $11.31.
- Metals X added 4c to $1.87 thanks to continued strength in tin price which is sitting at US$54,600 a tonne.
- St George Mining lost 1c to 7.9 despite reporting the start of pilot study test work on its Araxa project in Brazil, and
- EQ Resources fell by 4c to 36c in spite of reporting record $55 million in revenue from tungsten sales, and American Tungsten and Antimony lost 1.4c to 6.4c despite starting a scoping study into a tungsten plant in Nevada.
