WA1 Resources, a company listed for just 10-months, made what could be Australia’s first significant niobium discovery during drilling for rare earths at its West Arunta project near the border with WA and the Northern Territory.

Investors piled into the stock, driving WA1’s share price up by a 68c (500%) to 82c during the week on the strength of the first hole drilled into the P2 target which proved to be a mineralised carbonatite system.

Despite being very early days in what’s seriously remote sand dune country 800 kilometres west of Alice Springs and 1000km east of Port Hedland, the mention of carbonatite caught the eye of rare earth professionals.

Carbonatite is the same material mined at Australia’s premier rare earth deposit of Lynas Rare Earths at Mt Weld carbonatite (which is 800km south of the WA1 project).

WA1 reported that that it had encountered 142 metres of material assaying 0.31% niobium and 0.17% total rare earth oxides starting at a depth of 162m, with an enriched 54m at 0.62% niobium and 0.18% rare earths.

But it was at the end of the hole where the mineralisation got quite exciting because the final 2m returned 1.22% niobium and 0.22% rare earths, a sign that the system gets richer at depth.

Much more work is required at the West Arunta discovery but with assays like that WA1 will have no difficulty raising fresh capital for what could signal the opening of a region long neglected because it is remote and fiercely expensive to explore.

Other rare earth news include the awakening of Northern Minerals an early mover in the sector but one bogged down by low prices for its particular mix of material which is low in high-priced neodymium and praseodymium and high in low-priced dysprosium and terbium.

Nic Curtis, the foundation chief executive of Lynas, is the new man in charge of Northern Minerals. He launched his new gig by stitching up a deal to sell material mined at the Browns Range mine to Iluka Resources, which is planning to build a rare earth refinery adjacent to its ilmenite mine at Eneabba, north of Perth.

The deal hasn’t done much for either company yet with Northern Minerals creeping up by 0.3c to 4.2c while Iluka slipped 45c lower to $8.79 but with UBS tipping a future price of $10.15 and Shaw stockbroking pushing the boat out to a future Iluka price of $12.

Overall, the Australian market shook off concern about the start of a fresh round of interest rate increases which started in Canada where the central bank upped rates by 0.5, almost certainly a forerunner to a similar U.S. increase next week, with Australia to follow.

Investors, despite the obvious issue of rising rates slowing business and adding to costs, believe they can see the beginning of an end to the cycle, though Westpac reckons the process will last until March with a terminal Reserve Bank rate of 3.85%, a fresh forecast which increased an earlier tip of 3.6%.

Of the local market sectors, gold did best this week thanks to a US$40 an ounce increase in the price to US$1666/oz, a rise which lifted the ASX gold index by an eye-catching 9.6% — though the index is still down 27% over the last six months.

Lithium, as mentioned earlier, shared the newsmaker prize with rare earths, led by a $5.63 rise by Mineral Resources to $77.25. MinRes is fast morphing from its roots as an iron ore miner into a lithium producer, a shift which saw Citi refresh a buy tip and price target of $86 and Bell Potter shoot for a $100 share price.

The big news from MinRes this week was the start of lithium hydroxide production at its part-owned Wodgina refinery in WA’s Pilbara region. A secondary development was a contribution to a $121.5 million capital raising by Global Lithium so MinRes could retain its 9.9% stake in the emerging producer.

Other lithium news and price moves included:

  • Vulcan Energy adding $1.20 (19.5%) to $7.34 after announcing the production of first high-grade material from the pilot plant at its German brine operation.
  • Pilbara rising 12c to $5.12 after reporting exceptional cash generation from high-priced sales of spodumene with Macquarie Bank tipping a further leg up to $5.90 offset by Citi and UBS saying “too far, too fast” with sell tips and a price target of $4.60 and $3.05 respectively.
  • St George Mining and Monger Gold becoming the latest converts to lithium. St George, better known as a nickel explorer, has started lithium drilling at its Mt Alexander project in WA, a move which boosted the stock by 2c (47%) to 6.2c, Monger Gold slipped 0.5c to 43c though largely because of a $4.5 million placement to accelerate lithium exploration.
  • Latin Resources, which is looking for hard rock lithium in Brazil, added 0.2c to 11c but also caught the eye of analysts at Bell Potter who reckon the stock is heading to a price of 18c.
  • Benz Mining rose by 2.5c to 48c after reporting the discovery of 12 new pegmatite (lithium orebodies) at its Ruby Hill West project in Canada, and
  • Jindalee Resources added 3c to $2.32 after reporting encouraging drilling result from its McDermitt project in the U.S. State of Oregon.

Gold stocks, thanks to that U$40/oz rise in the price, had a good week, led by Northern Star which added $1.05 to $8.91 and Evolution, which ended its down days by adding 30c to $2.11, as well as returning to the “buy” books of stockbrokers such as those at Morgans which see the up-trend continuing all the way to $3.10.

Breaker Resources added 5c to 28c but it also scored an optimistic buy recommendation, this time from Bell Potter which lauded the sale of lithium rights at the Lake Roe project for $60 million, telling clients that Breaker is heading up to 62c.

Other gold moves included St Barbara clawing back 7.5c to 53c after weeks of being sold down and Bellevue, up 10c to 78c after reporting brisk progress at its namesake mine in WA with first gold scheduled for the second half of next year.

Iron ore and coal, two of Australia’s star performers, had a mixed week which started with another nonsense report from the Australian Government in its mini-budget which included price forecasts of US$55 a tonne for iron ore (versus today’s US94/t) and US$60/t for thermal coal (v US360/t).

Wrong with such consistency, it’s hard to believe that the boys and girls in Treasury keep publishing their spectacularly inaccurate commodity forecast even if they have to do it as part of the budget process – though the latest coal price looks somewhat ideologically-based (anti-coal) than a serious forecasting effort.

On the market, Fortescue Iron paid a price for its low-grade material with a 50c slide to $16.09 while Champion Iron added 32c to $5.25.

Stanmore was the pick of the coal stocks with a rise of 25c to $2.92 while Whitehaven finally ran out of puff, shedding 36c to $9.82 – it was $2.83 on this day last year.

Copper, which is seen as the big winner from energy transition, performed well despite negative reports from investment banks at a series of talks associated with London Metals Week.

Macquarie in particular singled out copper as overdue for a correction while Citi said it was heading to less than US$3 /lb, comments the market ignored by lifting copper by US30c to US$3.63lb taking stocks such as Sandfire with it as the Australian miner with growing international interests added 25c to $3.64.

OZ Minerals, which has rejected a $25 per share takeover offer from BHP, went the other way, slipping 88c below the bid price to close at $24.50.

Other news and market moves this week included:

  • Dundas Minerals slipped another 3.5c to 42c after releasing an exploration update on drilling at its Central nickel and copper project in WA without any fresh assays. Earlier this month the stock traded as high as $1.55 after reporting encouraging hand-held X-ray fluorescence (XRF) readings.
  • Caravel Minerals added 1.5c to 22c after releasing an update on approvals for its Dasher copper project in WA.
  • QMines rose by 4.5c to 19c after reporting high grade copper intercepts at its Mt Chalmers project in Queensland, including 37 metres and 3.6% copper starting at a depth of 4m.
  • Black Canyon reported thick manganese enriched shale from drilling at its Flanagan Bore project in WA, including 27m at 13.7% manganese from the surface. The stock added 4c to 27c, and
  • Hammer Metals rose by 0.7c to 6c after reporting a 25m intersection of material grading 1.92% copper from a depth of 74m during drilling at its South Hope project in Queensland.