Iceni Gold starred with a 300% price rise from 2.3c to 10c before weakening after reporting bonanza gold grades up to 18,207 grams a tonne (equivalent to 587 ounces a tonne) from surface samples melted down to yield a 9.5oz bar of dore (a mix of gold and silver).
Larvotto Resources followed with a rise of 3.8c (52%) to 11c after reporting high grade drill results from its Hillgrove project in NSW, including a hit of 65.8g/t over 31m from a depth of 244m – with a high grade core of 220g/t over 5.3m.
Speculators loved the discovery news though the reality is that Iceni remains a company valued on the market at $25 million and Larvotto is a $27 million stock, a fraction of the $2.4 billion and $4.9 billion value of local uranium leaders Boss and Paladin.
Those high stock market values of Boss and Paladin tell the story of what looks to be a second phase of the uranium boom which started four years ago when the metal was trading at US$23 a pound on its way up to US$106/lb in January before easing to US$93.50/lb.
The first phase of the rush into uranium was driven by funds stocking up ahead of demand from nuclear power plant operators, an event slowly happening.
The latest phase, which analysts at the investment bank Citi see potentially leading to a record uranium price of US$151/lb, could be a result of a U.S. trade ban on Russian metal.
If uranium does reach Citi’s bull case price, it would eclipse the all-time high of US$140/lb reached in the boom year of 2007.
Copper, the cause of BHP’s proposed bid for South African-focused Anglo American, had a mixed week, easing back a few cents to US$4.54/lb, a slip which coincided with growing concern about BHP’s ambitious raid on a well-protected rival.
While no-one seems to doubt that copper is set to dominate commodity market interest for the next few years thanks to rising demand and flat supply, the same cannot be said about BHP’s takeover bid for Anglo.
High profile Sydney stockbroker Angus Aitken described the situation as “a complete mess” while other critics have said BHP appears to have bitten off more than it can chew.
Government competition regulators are starting to probe BHP’s complex offer to acquire Anglo American which risks becoming bogged down in endless inquiries, leaving the way open to a simpler offer from a rival miner.
While corporate games are being played around Anglo American, the copper market is showing signs of tightening thanks to increasing consumption in China as supply risks grow.
Goldman Sachs raised its end-of-year copper price forecast from US$4.54/lb to US$5.45/lb and warned of price spikes thanks to the potential of a “stockout episode”, a point at which inventories disappear and consumers are forced to bid steeply higher prices to get essential supplies of the critical metal.
Prominent gold leader Mark Bristow, who is diversifying his Barrick Gold group deeper into copper, warned during the week that takeover activity would “do nothing” to boost the supply of copper.
Anax Metals was the best performing local copper stock as interest returns to its plans for the historic Whim Creek project in WA. The stock, which dropped to 2c last month, regained all the lost ground to trade up to 4.2c this week.
Sandfire, long an investor favorite, continued its strong upward move, adding another 24c this week to trade around $9.54 while another leading local, 29Metals, continued to struggle, losing 3c to 45c. Great Western Exploration rose slightly to 5.8c as it prepared to drill the Fairbairn project in WA said to have similarities to Sandfire’s worked-out DeGrussa mine.
Overall, the Australian market had a reasonable week, rising back over the 8000-point mark as measured by the all-ordinaries index to peak at 8083 on Wednesday, a one-month high, before easing back to 7989 as interest rate wobbles returned and investors took to the sidelines ahead of next week’s Australian budget.
The gold index was flat as the gold price edged $7/oz higher to US$2308/oz with the focus of gold analysts being continued strong buying by China, which added another 60,000oz to its holding during April.
The “de-dollarisation” campaign by China, which now owns 72.7 million ounces valued at US$168 billion, is a providing significant support for gold.
Locally, the most interesting news and price moves in the gold sector included:
- Bellevue rising to $1.77 before easing back to $1.71 for a loss of 3c over the week after reporting that production at its namesake project in WA had been declared commercial and expansion studies have started.
- Black Cat Syndicate adding 3c to 30c after reporting that its Kal East project in WA should yield strong returns.
- Red 5 edging 2c higher to 45c after reporting fresh drilling results from its King of the Hills project with a best hit of 5m at 32.38g/t.
- Regis rising by 5.5c to $2.10 after reporting an expanded underground resource at its Duketon mine. Citi lifted its price target for the stock from $1.30 to $1.70 but stuck with a sell recommendation. Morgan Stanley said buy with a target $2.45.
- Evolution trading at a steady $3.79 though Jarden was unimpressed with the company’s plans and said sell with a price target of $3.02, and
- De Grey launched a $600 million equity raising priced at $1.10 as part of a bigger fund raising exercise for its big Hemi gold project. The stock remains in a trading halt.
Boss and Paladin, as mentioned earlier, led the way in uranium on the local market with Boss adding 20c this week to trade at $5.52 while Paladin stormed ahead with a rise of $1.40 (9%) to $16.39.
Other U-moves of interest included: Deep Yellow, up 3c to $1.60. Bannerman, up 29c to $4.56 and Global Uranium, up 1c to 11c as drilling starts on its Tallahassee project in the U.S.
Rare earth stocks had a flat week, marked by two political events, with Germany asking for a boost in Australian rare earth production and Iluka Resources complaining about Chinese “weaponisation” of the industry.
The German request came in the form of a visit from the country’s foreign minister, Annalena Baerbock, who said her country not only wanted more critical minerals from Australia but wanted to see them processed here rather than in China.
Iluka, which is struggling to add rare earths from its Eneabba mineral sands operation, enjoyed a modest 5c price rise to $7.86 while other rare earth stocks barely moved. Lynas was up 0.5c to $6.62.
Lithium stocks showed signs of positive moves as China’s electric vehicle industry accelerates into a position of global domination, much to the annoyance of Europe, the U.S. and Japan.
Patriot Battery Metals led the way with a rise of 15c to 93c after reporting another round of strong drilling results from its Corvette project in Canada, including 21.9m at a whopping 3.58% lithium.
Other lithium moves included Atlantic, up 2c to 41c after reporting fresh drill results from its Ewoya project in Ghana with a best intersection of 27m at 1.85% lithium. Liontown rose by 10c to $1.35 with Bell Potter sticking with a price target of $1.85 (Jarden says $1.03, and sell), while Pilbara Minerals edged 1c higher to $4.12 despite the weight of heavy short selling.
Other news and market moves of note this week included:
- Alliance Nickel more than doubling from 3.2c to 8c after being awarded major project status for its NiWest nickel and cobalt project in WA.
- Chalice Mining, another stock with heavy nickel exposure via its Gonneville polymetallic project, added 25c to $1.30 with Bell Potter pushing the share-tip boat all the way out to $5 (yes, $5).
- OZZ Resources earned a speeding inquiry from the ASX after a share price rise of 1.6c to 4.7c thanks to growing interest in its Maguire’s Reward gold project in WA, and
- Firebird Metals added 2c to 20c after it reported a low-cost development option for its high-purity manganese project.
