Garimpeiro is showing his age by going all conservative this week in response to the risk of a global recession knocking the stuffing out of commodity prices.

Most indicators suggest the prospect of a global recession is receding. Yet the world’s central banks are trying damn hard to achieve a recession by overdoing interest rate hikes.

Back in August last year when the broader market was struggling, Garimpeiro came up with a strategy of seeking out owners of Tier 1, or potential Tier 1, discoveries in the mining and exploration space.

The idea was that as they were effectively “on sale’’ because they had been dragged lower by the broader market weakness at the time, they would shine through in the long run and deliver, potentially at least, handsome rewards.

Garimpeiro nominated three stocks in Tier 1 arena at the time – De Grey, Chalice, and Rumble. He added Patriot to the list in mid-February.

The strategy has worked well all right. De Grey is up 64% since August, and 23% since mid-February. For Chalice, the respective gains have been 63% and 28%, while Rumble has been the laggard with losses of 18% and 2.2% respectively.

Patriot, the mid-February addition, has gained 4%. Today Garimpeiro adds a fifth stock to the Tier 1 clutch – the Brazilian rare earths stock Meteoric (ASX:MEI).

Now if a deep recession were to hit markets in coming months, there will be nowhere to hide, except perhaps in the gold stocks. But the broader point today is that if the proverbial does hit the economic fan, companies with Tier 1 credentials – or emerging Tier 1 credentials – will perform better in the long run.

De Grey (ASX:DEG): Trading at $1.64 mid-week, the company is a beneficiary of the 10% rise in the US dollar gold price in the opening quarter of 2023. It has got a big market cap of $2.5 billion but it is not your average explorer as it has 10.6M oz of gold under its belt at its Mallina project.

The mid-year should see completion of a definitive feasibility study into what is set to become one of Australia’s biggest gold mines. Completion of project funding should not be too far behind the DFS, and it will all systems go.

It has takeover appeal too. Newmont’s $28bn tilt for Newcrest demonstrates that the big boys are up and about in the M & A space as the pressure on them to at least maintain their forward reserves is as strong as ever. Gold Road (GOR) has positioned itself to any takeover action in De Grey by putting its foot on 20% of the company.

Chalice (ASX:CHN): Trading at $7.92 mid-week for a market cap of $3 billion. Its Julimar discovery continues to grow in scale. At last count its magic mix of metals was the equivalent of 3Mt of nickel, or 30M oz of palladium.

It has kicked off a formal process to find a strategic partner for Julimar’s development. Gina Rinehart is on the register with a shareholding under the 5% disclosure. Anything could happen on the strategic/M & A front with this one as finds like Julimar are rare beasts.

Rumble (ASX:RTR): Trading mid-week at 22c for a market cap of $137m. Although it is the underperformer in Garimpeiro’s list, it has lived up to expectations by recently announcing a maiden resource for its Earaheedy zinc-lead-silver discovery north of Wiluna.

It came in at a thumping 94Mt at 3.1% zinc-lead and 4.1g/t silver for 2.2Mt of zinc, 700,000t of lead, and 12.6M oz of silver. It is very much a maiden estimate and puts Earaheedy well on its way to earning its Tier 1 stripes.

The market did not react as might have been expected. But Rumble will be out and about road showing the resource estimate in coming weeks. Zinc is not gold, it’s not lithium, and it’s not rare earths.

But expect a lot of interest in Earaheedy from big name mining companies, commodity traders and end-users in this one.

Patriot Battery Metals (ASX:PMT): The dual-listed Patriot was trading at $1.58 mid-week. Interest is building in its upcoming maiden resource estimate for its Corvette project in Canada. Something special in terms of tonnage and grade is expected.

That is kind of interesting when M & A is stepping up in the industry, with Albemarle’s $5 billion tilt at Liontown (ASX:LTR), and activity by big name players in Essential (ASX:ESS), demonstrating where the industry itself thinks things are headed.

Meteoric (ASX:MEI): Trading at 13c mid-week for a $225m market cap. Garimpeiro has banged on enough about this one previously. A maiden resource estimate is now very close and as Garimpeiro has mentioned before, his cousins in Brazil are in no doubt that it will be both big and high-grade.

Will it blow away the competition from rare earth explorers in Australia? We will have to wait and see.

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