After a week of market elation and ASX all-time highs, this week saw the index experience a serious pullback as banks and miners alike were left with nowhere to hide. The half-yearly reporting season was particularly painful for the mining majors as weakening Chinese steel demand saw iron-ore prices and profits plummet.
Embattled iron-ore producer Mineral Resources reported an $800 million interim loss for the half-year and then saw its share price drop some 27 per cent during the week, before it finished Friday with a glimmer of hope and a small bounce.
The banks dealt a lot of this week’s damage as the majors were all hammered on lower-than-expected financial results.
The charging gold price was one bright spot on the ASX. The precious metal was a saving grace in a week in which United States President Donald Trump caused more jitters by threatening to slap on additional trade tariffs.
The goldies did not completely dominate, however, and Bulls N’ Bears ASX Runners of the Week list also features some more flavoursome critical minerals.
West Cobar Metals Ltd (ASX: WC1)
213pc up (from 1.5c to 4.7c)
This week’s Bulls N’ Bears ASX Runner of the Week is West Cobar Metals. The company shot out of a cannon on Thursday after the market had time to mull over its Wednesday announcement unveiling some outstanding antimony leach results from its Bulla Park copper-antimony project in New South Wales.
West Cobar’s share price jumped 33pc on the release. The following day more than $1 million of shares were traded, rocketing the company’s share price up 96pc to an intraday high of 4.7 cents, some 213pc up from a close of 1.5c last week.
West Cobar reported initial float tests with recoveries of up to 94pc copper, 90pc antimony and 88pc silver at grades of up to 19.4pc copper, 7.5pc antimony and 271 grams per tonne (g/t) silver.
The company said the preliminary tests results foreshadow the potential to generate a saleable antimony product that could be separated from the copper and silver mineralisation at Bulla Park.
It also believes the project has a bulk tonnage, potentially open pittable copper–antimony–silver deposit. With further optimisation test work - to be carried out immediately – West Cobar hopes to simultaneously increase the copper and silver grades of its concentrate to achieve a premium copper product.
One thing seems certain, amid Trump’s tariff wars and global critical minerals uncertainty, the higher antimony price appears here to stay. Very few projects of significance seem to be replacing lost Chinese supply and the next major project to globally influence the market is likely to come out of NSW, from Larvotto Resources’ Hillgrove mine. And Hillgrove is still in the early days of its approvals process.
Cavalier Resources Ltd (ASX: CVR)
165pc up (from 8.1c to 21.5c)
Surging into second place on this week’s ASX Runners list is Cavalier Resources, which signed a non-binding term sheet with mining financier Raptor Capital on Thursday to the tune of US$11m (A$17.5m) to fund its Crawford gold project near Leonora in Western Australia.
Cavalier’s share price had a two-day re-rate on the news and is showing no sign of slowing down. Its shares peaked at a high of 21.5c on Friday, up a massive 165pc for the week from a close of 8.1c per share last Friday.
The company says the new funds will fully finance the development of the Crawford open pit and a near-mine drilling program to upgrade further portions of its current resource.
The favourable stream finance facility is non-dilutive to Cavalier shareholders and does not require any additional equity capital be raised to advance Crawford to stage one gold production.
Using a $4100 per ounce gold price – against the current $4600/ounce gold price – Crawford's stage one pre-feasibility study indicates a net present value of $40m and an internal rate of return of 362pc. That would see Cavalier achieve a payback on capital within four months and an undiscounted cashflow of $44.2m.
It's not a bad result for a company that started the week with a market cap under $5m.
Panther Metals Ltd (ASX: PNT)
125pc up (from 0.8c to 1.8c)
Panther Metals has taken out the final spot on the Runners podium this week, in rather peculiar fashion for the list.
The company has maintained by way of an ASX “please explain” query, that there was no news unreleased to the market this week and that its 125pc run was based on some long overdue recognition. Could the market just be catching up on Panther’s quarterly results, released last month, highlighting some impressive drilling results from its Laverton gold project in WA?
On Tuesday, the company was handed an ASX speeding ticket after its share price increased to a high of 1.2c on the day from 0.8c last week. Panther responded that it was unaware of any new information to the market, and its share price climbed again to a high of 1.8c on the week for a gain of 125pc.
In fairness to the sub-$5 million market-capped minnow, last quarter’s drilling results from its Burtville East prospect returned some staggering grades and widths from shallow depths.
Wide, high-grade gold intercepts included peak figures of up to 8 metres at a juicy 15.29g/t. Another high-grade hit returned 6m running nearly an ounce of gold – 28.66g/t – from just 44m, including 1m at 127g/t. A final solid 8m intercept graded 8.04g/t from 27m, including 1m at 32.3g/t gold.
Panther says detailed evaluations are underway on its existing Burtville East geological model to interrogate and validate the current interpreted lode geometry of high-grade intercepts.
The company is set for more than 2500m of budgeted drilling remaining at the project as part of a planned 7000m program, which is expected to be completed this quarter.
Perhaps the promise of more high-grade drilling and a miniscule valuation of $3.5m stirred the market to bring this goldie back to life.
Diablo Resources Ltd (ASX: DBO)
110pc up (from 2c to 4.2c)
Some 99.99pc pure copper cathode material from the Lisbon Valley copper mine in Utah. Diablo Resources’ new Phoenix project surrounds the Lisbon Valley mine and the company hopes its project can replicate its neighbour’s huge copper resource of more than 140 million tonnes. Credit: File
The fourth and final company on this week’s ASX runners list is another resources junior, Diablo Resources, which announced on Tuesday that it had acquired the US Phoenix copper project in the world-class Lisbon Valley district of Utah/Colorado.
Diablo saw nearly half of its shares on issue change hands on Tuesday, as the company’s share price soared to a high of 4.2c from a close last week of 2c. This was a hefty 110pc jump.
Phoenix is along strike to the northwest and southeast of the Lisbon Valley copper mine, which has been operating for more than 120 years and contains about 141.6mt of mineralisation grading at 0.26pc copper for 743 million pounds of the red metal.
The Phoenix project comes with some impressive historic rock chip samples assaying up to 45.7pc copper and a more significant average assay result of 6.29pc copper.
Diablo says initial reconnaissance work at Phoenix has identified more than 750m of outcropping copper mineralisation, which appears open in several directions. Exploration is underway to deliver drill targets to be tested as soon as possible this year.
If Trump does finally slap tariffs on copper, as he has threatened for nearly a month, a corresponding price premium should see a lot of copper producers, such as Lisbon Valley, bring back into focus many historic projects in former producing powerhouse regions.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
