ASX Small Caps and IPO Weekly Wrap: Benchmark lands at +1.5pc for Week 1 of the run towards Xmas
The ASX has made a happy and healthy start to December, lifting nicely as the market gets set to kick its shoes off and relax when Christmas rolls round in a few weeks’ time.
The benchmark’s performance has been anything but consistent, though – several critical data points came from the stats departments both here in Oz, and from overseas, which gave investors a few choice morsels to masticate while ruminating on which way their money should jump.
Locally, it was the RBA’s decision on interest rates that dominated brain space early in the week, with speculation ending with a bit of a fizzer when The Board paused momentarily from its trough-snuffling luncheon to inform the masses that rates shall remain unchanged this month.
It’s an indication that the RBA’s war on inflation might have sidled a step closer to being winnable – but there’s still the board’s unwholesome desire to see more Aussies out of work to contend with, before the inflation dragon can be slayed.
The other highly significant motivator for local markets this week was some pretty serious volatility in several commodity markets.
Things started looking unusual late last week, when gold pushed through US$2,000/oz to hit a record high water mark, which in turn sparked a run on local goldies that continued through the front half of this week.
Mid-week, China’s ongoing attack of the macro-economic sads burped out more sorry data that knocked pretty much every possible bit of breath out of the global oil market, sending crude prices tumbling fast.
That put a lot of pressure on the local Energy sector, but there was something of a lifeline in the latter stages of the week, when coal prices went through the roof, jumping close to 5% overnight on Thursday, local time.
The end result was an Energy sector being pulled in one direction while being pushed in another altogether, which – as anyone who’s ever tried to eject a drunk person from a waterbed will tell you – never ends well.
The ructions left Energy and Utilities in the red for the week, down 1.2% and 1.5% respectively – and that’s the bad news.
The decent news is that the rest of the market’s sectors posted some pretty healthy gains for the week.
Real Estate was well out in front, Health Care and Materials tied for second place while Consumer Staples rolled into a not-too-distant fourth.
Looking on a more granular level, the week’s best performers turned out to be the banks, helped along by the RBA’s hold on interest rates, a move that tends to precipitate a push by borrowers to get into a predictable market.
The XBK ASX 200 Banks Index finished the week on +1.95%, with the next best sector index – the XJR ASX 200 Resources – about 0.5% behind that mark.
Of course, it wouldn’t be a week on the ASX without a proper head-scratcher showing up in the end of week results, so here it is… with gold hitting record highs, and keeping above the psychologically significant US$2,000/oz mark, you’ll be forgiven for being surprised to learn that the XGD All Ords Gold Index actually fell for the week.
As Friday’s session winds to a close, it’s hanging around -2.75% for the week – a chunk of which could easily be put down to profit taking by the more nimble investment market, of course, but still… that’s a significant dip with prices for the metal set to stick where they are for now.
Leading the Small Caps winners list for the week are a smattering of little guys that didn’t need to move far to hit triple-digit returns.
Both First Au (ASX:FAU) and TALi Digital (ASX:TD1) doubled up over the course of the week, which looks great on paper but isn’t quite as impressive when we’re talking in fractions of a cent per share.
Making more significant headway this week was Lanthanein Resources (ASX:LNR) , which stacked on a beefy +83% on news that it’s set to acquire a 70% interest in the Lady Grey lithium-tantalum project, which is just 400m west of the massive Earl Grey lithium mine at Mount Holland, WA.
To help drive home just how big a deal this is for Lanthanein, it should be noted that the neighbouring Earl Grey – owned by Covalent Lithium, a joint venture between SQM and Wesfarmers (ASX:WES) – has a resource of 189Mt grading 1.53% Li2O and is hosted in the proven world-class Forrestania Greenstone Belt.
Alterity Therapeutics (ASX:ATH) had a solid run early in the week, after presenting a really promising tranche of new research data on the effect of the company’s ATH434 drug in a Parkinson’s disease primate model.
Local investors do enjoy having a punt on hone-grown med-techs, especially when it looks like things are shaping up nicely on the research front – and Alterity turned out to be no exception, bagging am 86% boost for the week.
Monday 04 December, 2023
Smashing Monday open was the Aussie medical device company Compumedics (ASX:CMP), which has been cleared by the US FDA to go get its flagship Somfit sleep aid device marketed in the USA.
Compumedics can now begin its commercialisation activities in the key USA market, following initial commencement of sales activities for Somfit in the Australian market since the beginning of FY24.
In Australia, sales of Somfit generated $1.2m of orders taken to date since the launch in July.
CMP and clearly many, many punters reckon there’s a significant poorly-rested market in the US worth circa US$110m-180m in potential revenue, from which the company ‘will target 10% to 30% within the next 24 months’.
Base and precious metals explorer Boab Metals (ASX:BML) had been absolutely hectic upon the small caps greatest hits charts, clocking about +60% before the ASX cops pulled the shares over for a glance under the hood.
Erstwhile lover of numbers, Stockhead’s Rob Badman says BML’s now up more than 90% over the past 30 days, although YTD it’s still down about 33%.
The WA company’s last piece of major news came almost a month ago, on November 8, when it made significant intercepts at the Keep Seismic prospect within its 75% owned Sorby Hills lead-silver-zinc project in the Kimberley region of WA.
Helium is a noble gas and Noble Helium (ASX:NHE) could very well have more of it.
The Tanzania-focused explorer yesterday reported it has successfully completed wireline logging and sampling at the Mbelele-2 well, at the company’s 100% owned North Rukwa Helium Project in Tanzania.
CEO Justyn Wood called the maiden drilling program “an incredible success… both operationally and in confirming the potential for a significant helium resource at Mbelele.”
Tuesday 05 December, 2023
Tuesday’s all-you-can-buy stock was Atlas Pearls (ASX:ATP), which noted that at its recently completed auction in Kobe, Japan, the company sold 130,000 loose pearls for total revenue of $14.81 million.
ATP’s total revenue from loose pearl sales for the five months ended 30 November 2023 is now just below the comparable revenue for all of FY2023.
“The sales outcome underlined the continuing strength in the global market for south sea pearls with strong demand for the company’s offering from both Chinese and Japanese buyers,” said an understandably happy Atlas Pearls’ CEO, Michael Ricci.
Reward Minerals (ASX:RWD) entered into a binding share sale agreement with the receivers at Kalium Lakes, to acquire the $400m Beyondie sulphate of potash (SOP) project for $20 million.
That’s a WA project, about 160km SE of Newman and SOP is a compound commonly used in agriculture – in fertilisers.
We recently reported this acquisition was on the table as a potential outcome, after the company entered into an exclusivity deed with Kalium and its receivers.
This share sale agreement now represents the next step in an acquisition that’s looking pretty likely.
Wednesday 06 December, 2023
Lanthanein Resources (ASX:LNR) was way out in front of the rest of the market most of the day, sailing on news that the company has inked a farm-in agreement that will see it earn up to a 70% interest in WA’s Lady Grey lithium project.
It’s a strategically important patch of land, some 360km east of Perth, which is literally over the fence from Covalent Lithium’s fully-operational Earl Grey Mine, which boasts a resource of 189Mt @1.53% Li2O at Mount Holland in the Forrestania Greenstone Belt.
“This transaction positions Lanthanein with a prospective lithium project in one of the most desired jurisdictions for lithium explorers in Western Australia,” Lanthanein technical director Brian Thomas said.
Lanthanein says it is looking to have the drills spinning on site in early 2024.
Desert Metals (ASX:DM1) was also doing well on news that the company has received commitments of $3.75 million through a heavily over-subscribed conditional share placement, with bids reportedly topping $6 million.
The $3.75 million is set to arrive via the issue of approximately 115.4 million fully paid ordinary shares at an issue price of $0.0325 a pop, with the money earmarked to drive drilling and exploration in Côte d’Ivoire and to continue exploration on the company’s Western Australian portfolio.
Earlier in the day, the gainers list included the likes of 88 Energy (ASX:88E), which brought some momentum into the market on the heels of an options prospectus delivered after market close the day before.
And Noble Helium (ASX:NHE) made back some of its losses from recent days, after releasing a clarification statement on drilling results from its North Rukwa Helium Project in Tanzania.
Thursday 07 December, 2023
The board of Whitebark Energy (ASX:WBE) took decisive action on Thursday saying they no longer need their interim CEO.
“The board remains focused on delivering a positive outcome for shareholders under its strategic review process and will consider the requirements for a replacement CEO. The company will continue to update the market when this process is complete.”
So… they might’ve found a CEO, or no longer need a CEO… either way, shareholders liked it. Up +32%.
Redcastle Resources (ASX:RC1) also did good on Thursday.
The $3.7m market capper completed an RC drilling campaign at its 100% owned Queen Alexandra prospect that involved drilling 37 holes, totalling 1,937m, on an area of 20m x 20m.
Samples were then sent off to a Kalgoorlie lab to ascertain gold content, and assays indeed confirm the presence of consistent, shallow gold mineralisation.
As Robert Badman mused: High-fives all round – they’re definitely not out there wasting their time.
Also out in front of the pack yesterday was microcap gold explorer Emu (ASX:EMU), which announced the results of its maiden reconnaissance field survey conducted during July and August 2023 at the Georgetown Project in Queensland.
It’s early doors, of course, but the results look promising, with the company laying claim to 15.4g/t gold assay results recorded from its first reconnaissance rock samples in the NE Dagworth area, ~19km east from Camp Oven Creek.
The company also reports rock samples returned 36.1g/t gold and 25.6g/t gold respectively from the Sandy Creek prospect, just south of Georgetown.
Invictus Energy (ASX:IVZ) flew high on news of a solid find, reporting that four hydrocarbon samples have been returned to surface in the Mukuyu-2 well at its 80% owned and operated Cabora Bassa Project in Zimbabwe.
“The Mukuyu-2 discovery, 7km away and 450 meters updip of the Mukuyu-1 well, which can subsequently be classified as a discovery, provides confirmation of the large potential of the Mukuyu field which has a structural closure of over 200km2,” Invictus MD Scott Macmillan said.
Friday 08 December, 2023
There was a lot of microcap movement on Friday, with a number of the ASX’s smaller companies posting some healthy percentage gains – most of them without any news or definitive announcements to pin it on.
92 Energy (ASX:92E) is moving well this morning, and it definitely has news for investors, as it’s now part of a three-way takeover deal with Canadian-listed resources company ATHA.
ATHA has inked a deal with 92 Energy to snap up 100% of the company, at a whopping 78% premium to the local explorer’s closing price of recent times – shareholders are set to pocket 0.5834 ATHA shares for every 92E share held, giving an implied value of around $0.65 a pop.
It’s not the only shopping that the Canadian firm has been doing, though – it’s also buying up all of the issued and outstanding shares of Latitude Uranium, by way of a Canadian court-approved plan of arrangement.
Holista CollTech (ASX:HCT) is up this morning as well, following news that the judge overseeing the Federal Court stoush between the company and the Australian Securities and Investments Commission pulled the pin on proceedings a day earlier than expected. No decision has been announced.
First Au (ASX:FAU) is moving in the right direction, off the back of a fancy-lookin’ investor presentation that the company released yesterday.
Other big movers included Latin Resources (ASX:LRS), which made a mighty 21%-plus leap after revealing a 56% boost to the company’s global resource, bring the combined total of its JORC-compliant MRE to more than 70Mt.
Nothing launched this week, but there are a couple on the list for between now and the end of the year.
Expected listing: December 11
IPO: $7m at $0.20
LTR Pharma is a clinical stage, biotech company pioneering a novel intranasal technology – SPONTAN – designed to treat erectile dysfunction in 10 minutes or less.
SPONTAN is said to provide on-demand delivery and faster effect. A lower dose provides less systematic exposure and reduced side effects.
According to LTP, benefits of SPONTAN include enhanced trans mucosal absorption, increased bioavailability and lower drug dose.
Erectile Dysfunction (ED) is a condition in which you are unable to get or keep an erection firm enough for satisfactory sexual intercourse. ED can be a short-term or long-term problem.
LTP is targeting a US FDA New Drug Application (NDA) filing for SPONTAN, which is expected to be completed by the end of the first quarter of 2025 under the 505(b)(2) approval pathway regulatory strategy.
Expected listing: December 18
IPO: $35m at $0.83
Enlitic is a healthcare IT company that harnesses AI to manage medical imaging data in radiology, such as MRI, CT, X-ray and ultrasound images.
The Enlitic platform standardises, protects, and analyses data to create a database that improves clinical workflows, increases efficiencies, and expands capacity.
The company says it owns the industry’s first localised real-world medical imaging database that unlocks the value of historical diagnostic images, aligned with real-time diagnostics, and linkage to real-world data across any critical care solutions.
Health care providers using the Enlitic platform would have their productivity increased, and have their costs decreased, says the company.
Expected listing: December 18
IPO: $10m at $0.20
Fuse has three ongoing minerals exploration projects – Mt Sydney and Mt Sandman in WA, and Eastern Isaac in Queensland.
The flagship Mt Sydney Project covers a strategic landholding (100%-ownership) of 1119km2, and is located on the under-explored Pilbara Craton-Paterson Province margin in WA.
Fuse’s work on the Mt Sydney Project to date shows VHMS gossans high-grade polymetallic vein outcrops mineralised breccia, and magmatic copper-nickel drill targets across this very large area of tenure.
The project has limited past exploration, with only 1106m of drilling over 484km2.
The Mt Sandman Project is situated on the complex boundary of two major tectonic units of WA – the Proterozoic Gascoyne Province and the Palaeozoic Carnarvon Basin.
Rock chipping has confirmed base metal association with barite and carbonate rocks up to 6g/t Ag >1% Pb & 0.3% Zn.
The Eastern Isaac Project in Qld meanwhile is a 25% ownership project, with the option to earn up to 80%.
The Project comprises three copper/gold project areas totalling 637km2: Gotthardt of 93km2, Valkyrie of 254km2, and Hamilton Park of 290km2.