Barry Fitzgerald: Four gold, copper and lithium stocks worth a closer look in FY22
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The new financial year is underway, so it is time for Garimpeiro to update his list of junior exploration and development stocks worth watching in the coming months.
Garimpeiro’s last list of five stocks to watch appeared on November 23. Coming up to seven months later, it can be said that his ego remains intact, but only just.
First up, a reminder that Garimpeiro does not make recommendations and always warns that investment in the juniors is high-risk.
Rather than listening to what he has to say, anyone looking to have a punt on an exploration stock is best advised to seek expert advice that is appropriate to their circumstances.
With that out of the way, had $1000 been invested in each of the five stocks listed by Garimpeiro in November, the $5000 would have become $7080, an increase of 42% in under 7 months.
Not bad by most measures. But Garimpeiro confesses that only one of the five stocks was a winner – Rumble Resources (ASX:RTR) which soared from 13c in November to 52c on Friday.
The other four – Alderan Resources (ASX:AL8), Antipa Minerals (ASX:AZY), Carawine Resources (ASX:CWX) and Encounter Resources (ASX:ENR) – all went backwards. Alderan was the worst of them by halving in value, while damage to the others was limited.
So the long and short of it is that Garimpeiro’s reputation (and ego) would have suffered something shocking had Rumble not made its recent Earaheedy zinc-lead discovery in WA.
Earaheedy has potential Tier 1 credentials. And just as it took time for the evolution of the Tier I status of De Grey’s (ASX:DEG) Hemi gold discovery, and Chalice Mining’s (ASX:CHN) Julimar PGE-nickel-copper discovery, it will take time for Rumble to confirm Earaheedy’s big-time potential.
So Rumble stays on the list. Meanwhile, Alderan, Carawine and Encounter have been booted.
Their exit is not because their upside exploration stories have weakened. In fact, they have got better. And it stands to reason that their exploration upside is now “cheaper’ than was the case in November.
It’s just that a refresh of stocks that could excite is a cathartic event Garimpeiro needs to go through on a regular basis.
Here’s the new list of five. Rumble has been covered off, and there is an update on Antipa, along with the three new entries:
TRADING AT 4.2c
Antipa was in WA’s Paterson long before the region shot to hotspot status, thanks to the Winu (Rio Tinto) and Havieron (Newcrest/Greatland) gold/copper discoveries.
Antipa’s big ground position is now either wholly owned or in joint ventures where Rio, Newcrest and IGO are picking up the tab.
All up, Antipa has exposure to some 60,000m of drilling across the projects in 2021.
On a 100% basis, that would cost around $40m. It is unprecedented stuff for a company of Antipa’s size with its $130 market cap and quality joint venture partners.
TRADING AT 9.1c
West African gold exploration is not for everyone, but there is no denying that when a decent discovery is made, some serious value creation can occur.
The Perth mining mafia is keen on Predictive’s Bankan project in Guinea.
The latest advice was that it is a “thumper,’’ whatever that means.
Having said that, latest drill results like 44m at 8g/t gold from 265m did impress. A maiden resource estimate is in the works and could be a re-rating trigger.
TRADING AT 9.1c
Plus $US4/lb copper prices has got everyone excited, including the smarties at the fund manager Paradice.
Garimpeiro is a sponger and notes that in recent times Paradice has built substantial shareholdings in three junior copper explorers/developers – New World (8.9%), Caravel (CVV, 6.8%) and KGL Resources (KGL, 6.3%).
Garimpeiro can’t list all three but will endeavour to follow the money by including New World in his refreshed list.
New World is working on returning the high-grade Antler copper project in Arizona to production in 2024. It could also create some additional value from its parked up cobalt project in the US.
TRADING AT 94.5c
ike all of the lithium stocks, Galan has been a star performer in 2021 as the new lithium boom gathers pace following a couple of years of misery for the sector.
Galan is working towards developing lithium brine projects in the Hombre Muerto salar in Argentina which is also home to Livent Corp’s El Fenix, and the Sal de Vida projects of Galaxy and POSCO.
If this second boom in lithium continues, Galan will either get into production itself, or be taken over by one its big boy neighbours.