The ASX has another scorcher, with equities again reaching new highs. Materials stole the show on a positive week Down Under and the beleaguered lithium and rare earths sectors led the charge.
Perth-based lithium giant Pilbara Minerals saw its share price surge nearly 22 per cent on news that global battery heavyweight CATL had closed some of China major mines.
Australian employment data came back better than expected, cracking a low 4.2 per cent unemployment rate with 25,000 jobs added last month. The positive numbers were mostly due to population figures decreasing -and not because Australians are having fewer babies.
The solid numbers slashed hopes for a September rate cut to a mere 35 per cent, and unfortunately, United States data also came back with higher-than-expected inflation. This led to the inevitable “this is not a time for investors to panic but rather focus on fundamentals” calls from the wealth management big wigs. Anything to keep the funds in their pockets and our fees turning over, I guess.
The real fireworks this week – and over the month - came from the white-hot Aussie critical minerals sector, in particular, rare earths.
After Federal Resources Minister Madeleine King last week suggested floating price floors to rival the US’s US$110 a kilogram neodymium and praseodymium benchmark, Australia’s rare earths stock continued their tear to taking out three of the top four spots in this week’s Runners list. And blue chips Lynas Rare Earths and Iluka Resources both saw their share price rise more than 50 per cent on the month.
However, this week’s Runner of the Week was taken out by a recently dormant rare earths giant lingering near Western Australia’s south coast.
OD6 METALS LIMITED (ASX: OD6)
Up 250% (3c – 10.5c)
Bulls N’ Bears’ ASX Runner of the Week is Aussie rare earths renegade OD6 Metals, which joined the critical minerals chorus this week with a transformational saleable product produced at its mammoth clay-hosted Splinter Rock rare earths project near Esperance on Western Australia’s south coast.
The company unveiled a high-quality mixed rare earth carbonate product, which comes in at a promising 56 per cent total rare earth oxides (TREO). It has also produced a mixed rare earth hydroxide at about 59 per cent TREO.
The company produced the rare earths with the help of industry leader ANSTO using a much-simplified scalable heap leach process, which will drastically reduce the operational costs and capex of its final clay processing facilities.
OD6 says its new plant flowsheet will slash hydrochloric acid use from 37.12 kilograms per tonne to 7.12kg/t, while boosting recoveries to an impressive 79 per cent TREO.
By ditching costly tank leaching for a heap leach pad, the company has eliminated complex steps such as clay washing, using energy-intensive filters and recycling about 80 per cent of its acid, which is its most costly operational input.
OD6 says its product should fetch a premium thanks to its high percentage of the magnet rare earths neodymium, praseodymium, dysprosium and terbium. It also has ultra-low levels of impurities uranium and thorium.
The company’s share price rocketed 250 per cent on Wednesday and Thursday to peak at 10.5 cents from last week’s 3c close, fuelled by a massive $5 million in stock traded.
OD6 will now court off-take partners across North America, Europe and Asia for its massive 682 million tonne resource at 1338 parts per million (ppm) TREO.
With the talk of price floors and a massive slashing in costs at Splinter Rocks, OD6 has catapulted itself back into the Australian rare earths fray, closing the week in a trading halt ahead of raising funds for a renewed clay hosted rare earths push at its monster WA project.
MOUNT RIDLEY MINES LTD (ASX: MRD)
Up 250% (0.2c – 0.7c)
Snagging silver this week is OD6’s Esperance neighbour, Mount Ridley Mines, which rode the rare earths coat tails of its dazzling big brother in the region to see its share price also surge 250 per cent on the week. Mount Ridley’s stock rose from 0.2c per share last week to a high 0.7c on Thursday.
Given Bulls N’ Bears doesn’t do draws, and because it released no news, Mount Ridley took a back seat to the OD6, which is doing a lot of heavy lifting in the complex chemical processing department.
Mount Ridley’s eponymous project is just a stone’s throw from Splinter Rock and hosts its own smaller, but still considerable, 168-million-tonne clay-hosted resource grading at 1201ppm TREO.
The company says mineralisation at the project is highly analogous to OD6’s clays and that previous hydrochloric acid leaching tests positions it as a dark horse to compete on the same field as its more advanced sibling.
Mount Ridley kicked off its own capital raise on the week, spelling out a $830,000 raise and rights combo to advance its metallurgical testwork with ANSTO, mirroring OD6’s heap leach innovations.
The project’s proximity to Splinter Rock and shared geological traits have given it a second chance at life. For now, this Esperance underdog is riding the sector’s tailwinds, but with the world eager to get its hands on a Western rare earths supply, there looks to be plenty of upside left in this $3 million market cap minnow.
ACTIVEPORT GROUP LTD (ASX: ATV)
Up 200% (1.1c – 3.3c)
Charging late to claim the final podium place on Bulls N’ Bears Runners is AI solutions co-ordinator Activeport Group, after it launched Australia’s first private cloud superhighway Private-Cloud Connect.
The fibre service offers variable bandwidth for private cloud operators and demand inflow, allowing it to deliver a flexible premium service at a reduced cost.
Private-Cloud now hosts three big customers DigiCo, Equinix and NextDC, which are tapping into Activeport’s software-orchestrated network for secure and scalable connectivity.
With the Australian artificial intelligence market projected to hit $22 billion by 2030, at a staggering 17 per cent annual growth rate, Activeport says its platforms are cornering a market niche linking private businesses to high-powered data centres.
The market certainly lapped it up, with pundits piling into the stock on Thursday’s ASX announcement. The company’s share price rocketed to close the week at 3.3c today, up 200 per cent from 1.1c last week, on more than $9 million in stock traded.
The company’s ability to scale for heavy workloads, such as data migrations, while optimising daily operations costs has got the sector talking.
Activeport’s rapid customer uptake signals it as a strong market fit, allowing Private-Cloud Connect to leverage Australia’s growing colocation infrastructure. The company’s early dominance has its eyeing partnerships to scale its network into Asia and beyond. With the ASX buzzing over tech innovators, some Aussie darlings are seemingly showing their metal.
Energy Transition Minerals non-executive chairman Simon Kidston (left) and managing director Daniel Mamadou on Channel Nine’s 60 Minutes program last Sunday. Credit: File.
ENERGY TRANSITION MINERALS LIMITED (ASX: ETM)
Up 180% (5.5c – 15c)
Closing out the Runners list this week is another rare earths hopeful in Energy Transition Minerals (ETM), which last week strategically scooped up its Penouta tin-tantalum-niobium mine in Galicia, Spain, for €5.2 million (A$9.2m) through an insolvency process. Surprisingly, that wasn’t why the company’s share price was running.
Despite its promising new project, a feature story on Channel Nine’s 60 Minutes program on Sunday really got ETM’s stock going. Company management rather cheekily suggested on air that there were billions to tens of billions of dollars’ worth of value in the ground at its Kvanefjeld rare earths project in southern Greenland, which is owned through an ETM subsidiary.
This was followed by a quick retraction followed on Monday, but the company’s share price was already humming. It shot from 5.5c to 15c intraday on a massive $13 million in stock traded.
As the 60 Minutes’ segment highlighted, Greenland is now and has long been opposed to mining, which might be why ETM added its Penouta project to the fold last week.
The tin mine looks an absolute steal and has a shot at operating in the near term. Its existing infrastructure includes a new 1-million-tonne per annum gravity processing plant, which is primed for a restart, pending Spanish regulatory approvals.
Acquired at a steep discount from its €28 million ($49.5 million) historical cost, Penouta’s sunk capital and recent operation has ETM saying it offers a low-risk bet in a promising tin market experiencing its own supply squeezes.
Penouta has a 1.1-billion-tonne rare earths resource, which complements its near-term cash flow potential. Additionally, ETM is freshly cashed up to navigate the project’s regulatory approvals process and any permitting hurdles. One thing’s for sure, if it can use its Spain proceeds to pull off its mammoth mine in Greenland, ETM will be on its way to becoming a powerhouse rare earths provider on a global scale.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Todd
