It’s the most wonderful time of the year … the time when all of the woes of a tough year for small caps can be gulped into history and washed away with a festive tipple or two.
And – maybe more importantly – it is also time for the Christmas edition of the Bulls N’ Bears Runners of the Week, where we find out which companies will close the silly season on a high before the ASX takes a well-deserved break.
So, as Santa makes his last-minute adjustments to his naughty-and-nice list and decides who deserves a stocking filled with gifts or the traditional lump of coal – which, incidentally, has slumped in price in the past year, making it an even worse punishment – let’s see what activities in the market have led to share prices closing ding dong merrily on high in the latest renewal of the annual “Santa rally”.
But just before we get stuck in, it should be noted that Santa places great value in “runners”. Otherwise, how else will he get his sleigh to move?
Anyhow, leading the charge this week like Rudolph on a foggy Christmas Eve is MTM Critical Metals, which saw its share price triple to 6.3 cents from a previous close of 2.1c after it acquired private company Flash Metals.
The binding purchase and sale agreement builds on MTM’s rare earths and battery minerals portfolio as it includes three exploration licenses in the West Arunta area of Western Australia and the Mukinbudin niobium-rare earths project, with a further two granted exploration licenses about 250km north-east of Perth.
Management says Flash also holds an option to exclusively negotiate the rights to Flash Joule Heating technology developed by Rice University in Houston in the United States. Rice has previously demonstrated the potential to treat rare earths mineralisation and more efficiently recover critical metals from recycling and waste streams.
Apparently, there has been very limited historical exploration on the West Arunta tenements, but they do sit near land held by both WA1 Resources and Encounter Resources, which have both produced some notable drill hits in the area.
WA1 recorded a 31m intercept grading 3.5 per cent niobium oxide including 13m at 5 per cent, while Encounter has encountered a massive 282m section going 0.54 per cent niobium oxide and 0.17 per cent total rare earth oxides (TREO) from 64m.
Niobium oxide is a bit like the frankincense that one of the wise men brought to Mary and Joseph in the original Christmas story – nobody really knows what it is, but it sure is considered valuable. OK, that is not completely true – frankincense is a resin from the trunk of the Boswellia tree and niobium oxide is used as an anode in lithium-ion batteries, but this column enjoys embracing any form of Christmas spirit.
MTM has grouped its two new projects together as the “WA REE” tenements, which is not confusing at all... However, with the acquisition of the Flash Joule Heating technology, the company could potentially be looking at a way to treat any rare earths and other minerals it finds on its newly-acquired holdings.
Still, it had better move quickly as its option exclusivity period expires on March 16 next year. Once exercised, MTM and Rice will then have just 90 days to negotiate an exclusive license agreement for the use of the technology.
Moving on…
Culpeo Minerals recorded a share price hike of more than 106 per cent to touch 6.2c this week from a previous close of 3c after recording some shallow hits of visible copper mineralisation from drilling at its Fortuna project in Chile.
The revelation saw a flurry of more than 52 million shares change hands, compared to the company’s previous record of the past year of just over three million last month. The record before that was 1.3 million way back in January … and it was only visible results.
The assays have been sent to the laboratory for analysis, but findings won’t be available until next year. So, what has prompted the meteoric rise in activity?
Well first of all, the mineralisation in both diamond holes remains open in all directions and the visual results expand the potential of the El Quillay prospect where outcropping copper mineralisation and historical mining is recorded across a strike length of more than 3km.
Management has interpreted the mineralisation as part of the type of iron oxide-copper-gold (IOCG) hydrothermal system that is considered highly sought-after due to the sheer size, multi-commodity nature and potentially high metal content. Australia has two major IOCG regions of global significance – the Olympic IOCG province along the eastern margin of the Gawler Craton in South Australia and the Cloncurry district in the eastern Mount Isa Inlier of north-west Queensland.
The area around Fortuna also has history. Between 1950 and 1960, and more recently in the 1990s, the mineralisation at El Quillay North was exploited by small-scale mining activities both from the surface and underground. Several shafts were sunk to a maximum depth of 80m, extracting predominantly copper sulphide mineralisation.
Or maybe it is simply the location. Chile is the world’s biggest copper-producing nation and in 2021 was responsible for more than 25 per cent of global copper production. The South American country is home to 10 of the highest copper-producing mines, including the Escondida copper mine operated by industry giant BHP.
Interestingly, the culpeo is a kind of South American fox found in Chile. It is a burrowing animal that makes its den by digging in the ground.
So, could the company be on the verge of unearthing something big with its own digging to call its home? We may have to wait for the final assays of its latest digging to find out. Perhaps, Culpeo will enjoy a Feliz Navidad of its own.
Christmas is a time for getting together and enjoying the company of your peers – and that is exactly what Novo Resources has done in the final week leading up to the holiday break. The company enjoyed a share price jump of more than 88 per cent to reach 24.5c from a previous close of 13c after deciding to spread the Christmas cheer by creating a couple of joint ventures (JVs).
The first deal was announcing it would join forces with SQM Australia after the latter agreed to pay $10 million for a 75 per cent interest in five of the former’s lithium-nickel tenements in WA’s West Pilbara region. The two companies will create the “Harding Battery Metals” JV, with the deal also including an option over additional tenements held by Novo in the Pilbara.
SQM Australia is a wholly-owned subsidiary of global lithium giant Sociedad Química y Minera de Chile. So, is there a Chilean theme going on this week?
The 660-square-kilometre tenement package is located next to Azure Minerals’ Andover lithium-nickel project and Artemis Resources’ Carlow Castle gold-copper-cobalt project and the JV will be managed by SQM.
Novo retains a 25 per cent interest in the lithium and nickel rights of the five tenements, while also maintaining 100 per cent ownership of all gold, silver, copper, lead, zinc and platinum group elements (PGE) found on the holdings.
The company then followed the move up yesterday to form a new JV partnership with private company Liatam Mining for its Quartz Hill project in WA’s East Pilbara region. Subject to TSX approval, Liatam has also agreed to invest $1.8 million to obtain 9 million Novo shares at 20 cents each to increase its shareholding from 3 per cent up to about 6 per cent.
Novo entered into an agreement with Liatam last year, and the mining services company has now exceeded its required $1.75 million spend at Quartz Hill. Following the completion of the earn-in agreement, the 80:20 Quartz Hill JV has now been formed.
Liatam has acquired the legal title to the tenements and becomes the manager of the JV, while Novo retains a 20 per cent ownership of battery mineral rights, in addition to 100 per cent of gold and silver rights.
Following the deals of the past week, Novo says it is in a strong financial position to continue its aggressive exploration focus on key gold targets in both Victoria and the Pilbara region in the New Year.
Good old gold, another of those precious gifts one of the wise men gave to Mary and Joseph, according to the Bible. And it has kept its value too, with record prices during the past 12 months.
Our final runner of the year goes to Millennium Services Group, which saw its shares touch $1.09 today from a previous close of 60c after it entered into a scheme implementation agreement with an entity controlled by SoftBank Robotics Singapore for the acquisition of 100 per cent of Millennium’s shares.
According to the deal, shareholders will have the option to receive $1.15 per Millennium share, unlisted scrip consideration or a combination of cash and unlisted scrip consideration. It represents an 85 per cent premium to Millennium’s previous closing share price.
And Millennium’s board says “sell”, with a unanimous recommendation that shareholders vote in favour of the scheme.
For those not familiar with the company, Millennium offers a broad range of property services including cleaning, security, maintenance and facilities services for some of Australia and New Zealand’s biggest organisations.
SoftBank Robotics says it is a leader in robot solutions and has been contributing to robotics technology development since the launch of Pepper, its first robot capable of recognising human emotions back in 2014. That was followed by an artificial intelligence autonomous cleaning robot in 2018, a multi-tray delivery robot in 2021 and its automated logistics solutions consulting last year.
Management says the deal with Millennium “aligns seamlessly with our goal of enabling traditional cleaning service providers to transition into smart cleaning providers and will allow us to offer digitally supported cleaning services enhanced with automation, robotics, and data-driven insights”.
And who doesn’t want a robot to clean their house at this time of the year? Particularly here in Australia when the hordes of relatives track beach sand or red dirt across the freshly-cleaned family home during the holidays.
Plus, data-driven cleaning sounds amazing for this time-poor columnist.
That brings an end to this year’s Runners column. What will we see in the New Year? Will James Bay continue to be the lithium district that has driven share price hikes higher than Santa’s sleigh? Will copper turn its fortunes around? Will gold soar higher than the records set in 2023?
Who knows. Certainly not this columnist. Merry Christmas all, see you in the New Year.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
