The copper/gold combination, with a whiff of takeover interest flowing off the likely break-up of Canadian gold giant Barrick Mines, are two of the key mining investment themes emerging ahead of the new year.

Local leader Northern Star features prominently in analyst tips as a target in 2026 for another big Canadian miner, Agnico Eagle, which is believed to be quietly building a stake in Australia’s biggest gold producer.

Interest in Northern Star saw the stock hit an all-time high early yesterday of $27.92, up $2.20 (8.6%) since Monday before fading to close at $26.97.

Agnico’s primary interest in Australia, so far, is the high-grade, low-cost, Fosterville underground mine in Victoria, a project which has whetted Canadian appetite for more Australian gold.

The rise in the gold price to US$4150/oz (A$6400/oz on conversion to Australian dollars) lifted the wider gold sector by 6% over the week, as measured by the ASX gold index, taking the index gain for the month to 11% and the rise since the start of the year to 108%.

A sharp increase in Australia’s rate of inflation, which saw the October reading rise to 3.8%, has sparked concern that the recent cycle of falling interest rates is over and the next move is likely to be up.

Sydney-based investment bank Barrenjoey is tipping a May rise in the Reserve Bank cash rate to 3.85% with a second rise next August.

Other interesting gold (and silver) moves this week included:

  • Pantoro, up 27c to $5.09 after reporting a successful round of drilling at its Mainfield target which is part of the rich but difficult Norseman project in WA.
  • Sun Silver, up 17c to $1.20 after reporting fresh high grade silver assays from drilling at its Maverick Springs project in Nevada.
  • West African Resources, up 17c to $2.74 after reporting progress in resolving a dispute with the government of Burkina Faso over its Kiaka project.
  • Gorilla Gold, up 2c to 40c after reporting the potential for high recovery rates from processing ore from its Mulwarrie project near Kalgoorlie in WA.
  • Leeuwin Metals up 4c to 19c after releasing encouraging exploration results from work on its Marda project in WA, and
  • Sunstone Metals, up 0.1c to 2.3c after reporting a resource increase at its Bramaderos project in Ecuador and thanks to buy tip and a share price target of 7c from Shaw and Partners.

Overall, the Australian stock market continued to shake off a case of the jitters which erupted in late October, wiping 10% off the all-ordinaries index.

At the close yesterday, the market was halfway back to its October 21 high with a rise over the past five trading days of 2.5%.

Copper, the other commodity winner this week, rose by US12 cents a pound to US$5.12/lb as investors reacted to BHP’s latest attempt to acquire copper-rich Anglo American, a move which confirmed both BHP’s need to expand its copper business and a growing global shortage of the most widely-used base metal.

Confirmation of a squeeze on copper supplies came yesterday when Codelco, Chile’s State-owned copper producer, secured a US$350 a tonne price premium from Chinese customers, a sharp increase on a US$89/t premium agreed earlier this year.

A fresh look at the copper market will come next week when Rio Tinto, one of the world’s biggest producers, holds its annual capital markets day, which will be the first major outing for the company’s new chief executive, Simon Trott.

Iron ore will be the focus of Trott’s presentation thanks to the start of exports from its part-owned Simandou mine in Guinea but copper will also feature prominently.

South Africa’s Harmony Gold was the top copper stock this week, rising by 11% on the Johannesburg stock exchange after announcing the $2.4 billion development of the Eva copper mine in Queensland.

Sandfire was the pick of the local copper miners, up 30c to $15.62 while 29Metals continued to trade erratically, slipping 1c lower this week to 38c.

Uranium, one of last week’s top performers, ran out of steam despite ongoing global interest in the nuclear fuel which is at the heart of a rush to expand the global reactor fleet to help meet the dramatic increase in demand for electricity.

The uranium price edged up by US20c to US$76.35 a pound, not enough to save the sector from widespread losses and a handful of rises.

Paladin led the way down with a fall of 7c to $7.73, followed by Boss, down 3c to $1.57 and Lotus, down 2c to 16c. Uranium stocks to gain ground included Bannerman, up 6c to $2.92 and DevEx, up 1c to 17c.

Rare earth news was dominated by Lynas losing 26c to $14.68 after reporting that erratic electricity supply to its new Kalgoorlie processing facility was hindering production.

On the flipside of the critical metals situation, Sunrise Energy Metals rose by $1.70 (38%) to $6.10 after its billionaire backer Robert Friedland talked up the potential of the company’s Syerston scandium project in NSW.

Mt Ridley Mines was briefly a speculator’s favorite after reporting new gallium exploration targets near Esperance in WA, news which lifted the stock briefly to 6c before it fell back to 3.8c for a modest gain of 0.3c over the week.

Iron ore continues to surprise with its strength in the face of persistent pressure from China for lower prices, including a campaign of intimidation and threats to ban certain types of Australian ore, especially some of BHP’s blends.

When combined with the start of exports from the Simandou mine, the Chinese pressure might reasonably have been expected to have knocked the iron ore price below US$100 a tonne.

That might yet happen but as at yesterday the Singapore iron ore price was sitting comfortably at US$106.45/t, up US$1/t over the week.

Fortescue rallied with the iron ore price, adding 57c to $21.17, close to a 12-month high, easily outperforming smaller rivel Mineral Resources which faded after a strong recovery, losing $1.49 to $47.86.

Lithium stocks eased despite upbeat reports from two investment banks, UBS and Canaccord Genuity, about the strength of demand for Battery Energy Storage Systems (BESS) which is growing more quickly than the electric vehicle (EV) market though off a lower base.

UBS, after a tour of China by a team of its analysts, said BESS production order books by major manufacturers were full with demand driven by a new electricity pricing regime which encourages midday power savings and battery storage for use in peak hours.

Pilbara, a local lithium favorite, was down a modest 2c to $3.99. Liontown lost 7c to $1.46, and Independence was steady at $6.69. Canadian focused PMET went the other way, adding 3c to 53c.

Other news and markets moves of interest included:

  • Almonty Industries rode a strengthening tungsten price to add 84c to $9.36. Other tungsten exposed stocks also benefited, including Tungsten Mining, up 3c to 18c.
  • Trigg Minerals added 1c to 12c after reporting a new high-grade antimony zone at its Canyon project in Nevada.
  • Peregrine Gold rose by 1.5c to 28c after reporting the discovery of a new channel iron deposit in WA’s Pilbara region.
  • Fortuna Metals lost 1c to 11c despite reporting a large scale rutile discovery in the African country of Malawi, and
  • VBX suffered a sell off after reporting infill drilling results at its Wuudagu bauxite project in WA. The stock closed yesterday at 37c, down 8c.