• The ASX 200 has eked out a small gain, up +0.46% this week
  • Utilities, Goldies and Banks were where the money was at
  • Who won the Small Caps race? Read on to find out…

 

Local shares have staged something of a recovery this week, but it’s been hard yakka for the bulk of the market thanks to the usual macro-economic blithering, and one company dropping a crazy IPO and sucking all the oxygen out of the room in the process.

Despite all that, the ASX 200 benchmark posted a +0.42% gain for the week, with a big 78 point jump on Tuesday providing most of the winning, after Monday turned out to be a dud.

There were only two really noteworthy spectres haunting the Aussie market this week – the first of which is super-boring, because it all unfolded with such a tedious inevitability that I’m honestly surprised I was awake for the whole thing.

Tuesday’s RBA Board meeting happened. The team got together for a fancy slap-up lunch of pie, chips and a beer or two, and – very bravely, I must say – did nothing at all to the Aussie cash rate.

Oh, they talked about it – what a fine number it is, how proud they are of it… even whispered among themselves what might happen if they changed it.

But in the end, because nothing ever happens, the cash rate needle didn’t move and everyone’s mortgage payments are still being extracted via the nose with a set of red hot tweezers.

And then there was an IPO, which could probably be better described as an incredibly well orchestrated media blitz by a fast food company, fully intent on flogging off a moderately tiny slice of the business and slurp up the value of whatever they kept for themselves.

I really don’t feel like rehashing the whole Guzman y Gomez (ASX:GYG) IPO fairytale – there are plenty of mentions of it all over the site, which you can read here, here and even here.

But the salient points are these:

 

  1. The company IPO’d with 11.1 million shares at $22 a pop – a staggering price that proved to be extremely popular for anyone with the cash to stump up.
  2. The stock went live on the market at 12pm, and was rangebound at $30 per share within 30-40 minutes, where it stayed for the rest of the afternoon.
  3. That put a market cap on the company of more than $3 billion, which is crazy (in my humble opinion) for a chain of overpriced Mexican food eateries.
  4. The market corrected on Friday, profit takers grabbing what they could and the GYG price was down about 4.5-5.0% by the close of play.

 

The lead-in to listing was the real jewel in this journey – a media blitz that was preposterously well-done, to the point where Guzman (or was it Gomez? I can’t tell them apart any more) managed to secure six-and-a-half logo-spattered minutes on the ABC.

A reminder for those who might have forgotten: The ABC eschews advertising (aside from spots for its own bookshops and such), to the point where even mentioning a brand name product on air can result in a wide array of punishments.

I’m talking everything from public humiliation at the hands of Paul Barry on Media Watch, through to hundreds of hours of community service, to be served inside a giant anthropomorphic animal costume while the cast of Play School sings at you, and the crew from Play School rifles through your backpack in search of spare change to keep the lights on.

As I said on Thursday, the real test of Mexican food is, as everyone knows, the next-day aftermath – and so we wait with some trepidation to see whether the company is able to sustain the hype, or if investors are in for a ring-stinging round of severe intestinal distress.

 

WHAT THE SECTORS DID

Here’s what the market sectors did:

asx weekly winner (SCL)
Chart via Marketindex.com.au

 

As you can see, Utilities ended up weathering this week the best, thanks mostly to movements at the top end of town, such as Origin Energy’s +6.24% climb and AGL’s similar but not as impressive +3.23% rise since this time last week.

Among the ASX indices, the story there was twin tales of success from the Goldies and the Banks – and on its own, those two wins tell us pretty much all we needed to know about how investors were feeling this week.

 

asx weekly winner (SCL)
Chart via Marketindex.com.au

 

Safe, solid and dependable havens were highly sought after – with the occasional Sure Thing from among the Small Caps enough to get the juices flowing a couple of times since Monday.

 

THIS WEEK’S ASX SMALL CAP WINNERS

Here are the best performing ASX small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:

 

Wordpress Table Plugin

 

Super quickly, here’s how the Small Cap winners ended up where they were on the ladder.

Schrole Group (ASX:SCL) went flying on news that there was a buyout offer on the table – and it was a generous one at that. TES Aus Global (a subsidiary of TES Global) offered a handsome sum for all of the Schrole shares in the world, at a “we really gotta have this” 203% premium that sent the stock into a very rapid low-earth orbit as investors rushed in to grab a slice of this suddenly juicy pie.

Similarly, it was a takeover offer that sent No 2 for the week into the big time today, when , asset management consulting services company K2Fly (ASX:K2F) revealed that it has entered into a Scheme Implementation Deed with Argyle Bidco that will see the latter acquire 100% of K2Fly for $0.19 per share – a 90% premium.

And in third place was a mystery that we’re not going to learn whodunnit until Monday, by the looks of things. Summit Minerals (ASX:SUM) rocketed up the leaderboard, a little too quickly considering there was no news to back up that movement. The company was, late on Friday, still in a trading halt while the company assembles a response to the ASX’s Please Explain postcard.

 

THIS WEEK’S ASX SMALL CAP LAGGARDS

Here are the worst performing ASX small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:

 

Wordpress Table Plugin

 

HOW THE WEEK SHOOK OUT

 

Monday 17 June, 2024

Schrole Group (ASX:SCL) saw significant gains today following its announcement of entering into a Scheme Implementation Deed with TES Aus Global, a subsidiary of TES Global. The agreement entails TES Aus Global acquiring 100% of Schrole’s issued capital through a court-approved scheme of arrangement. Investors stand to receive a cash consideration of 48.52 cents per Schrole share. That’s a whopping 203% premium on the closing price of Schrole shares on 14 June 2024 of $0.16, and puts a valuation on the company of $18.15 million.

HeraMED (ASX:HMD) also had a good morning on Monday, boosted nicely by news that its HeraCARE platform has gone live and is currently onboarding mums as part of the implementation of its agreement with Broward Health in Florida, USA.

Pilot Energy (ASX:PGY) rose on news that it has taken commitments of $4.0 million (before costs) in a placement to sophisticated, institutional and professional investors, which will see the company issue 181.8 million fully paid ordinary shares at an issue price of $0.022 a pop.

Emmerson Resources (ASX:ERM) burst on fresh news regarding its Nobles CIL gold processing facility.

The facility has now begun construction near Tennant Creek in the Northern Territory by Emmerson’s Joint Venture partner Tennant Consolidated Mining Group, with the 840,000tpa gold processing facility’s components relocated from Cloncurry in Queensland. They’re now being put together at the Nobles project area.

Emmerson notes the project is expected to generate about 80 jobs during construction and more than 160 jobs after operations ramp up with commissioning of the facility planned for Q2 of 2025. Commercial production is then scheduled to happen in Q4 2025, with Tennant Mining initially focusing on processing existing stockpiles and tailings at the Noble open pit complex then planning to develop other open cut and underground mines in the Tennant Creek Mineral Field.

The deal for Emmerson is a 6% gross production royalty on any gold produced from the JV tenements.

PPK Group (ASX:PPK)  surged following a favourable court ruling from the Supreme Court of New South Wales in the Flynn & Anor v PPK Group Limited & Anor case. The judgment mandates PPK to issue 1,136,011 shares to Flynfam Pty Ltd ATF Flynn Family Trust. This issuance is based on a calculation of $500,000 divided by the volume-weighted average price (VWAP) of PPK shares over the 30 trading days leading up to the judgment date on 14 June. This outcome aligns with PPK’s expectations.

NT-focused lithium explorer, Lithium Plus Minerals (ASX:LPM), may not be having the greatest year share-price-wise, but  the company jumped after announcing that  it’s lodged a Mining Lease Application for the future development of its wholly owned Lei Lithium deposit, which is considered one of Australia’s highest-grade lithium discoveries. Lei, within the company’s Bynoe project, is located roughly 71 kilometres south of Darwin by road and currently has a Mineral Resource Estimate of 4.09 million tonnes at 1.43% Li2O.

A technical de-risking work program is currently in progress, which includes environmental studies, and metallurgical testing. Results related to this are expected to be revealed some time in Q3 2024.

South Harz Potash (ASX:SHP announced it has received the spatial planning assessment (in German, the prototypically prosaic Raumverträglichkeitsprüfung), for its flagship Ohmgebirge Potash Development in central Germany.

In any case, this assessment process is regarded as a crucial milestone in Ohmgebirge’s development, which is part of South Harz’s 100%-owned South Harz potash project.

The assessment covers a potential layout for Ohmgebirge almost twice the size of the original design noted in the project’s recent pre-feasibility study.

Metallica Minerals (ASX:MLM); Diatreme Resources (ASX:DRX). While neither of these two stocks alone are absolutely crushing it share price-wise today, together they just about make a double-digit head-turner for their news alone, so we’re including them here.

Diatreme, a Brisbane-based producer of mineral and silica sands based in Brisbane, announced this morning that its takeover bid for high-purity silica sand player Metallica is now unconditional. Some facts around this. Diatreme currently has a relevant interest of 57.34% in Metallica, and its takeover offer (its final one) is scheduled to close on June 25.

DRX is encouraging all remaining Metallica shareholders to promptly accept the offer.

Lunnon Metals (ASX:LM8) said recent drilling at Lady Herial has uncovered significant near-surface gold deposits, including intervals such as 3m at 14.8g/t, 1m at 10.31g/t, 3m at 5.99g/t, and 5m at 4.01g/t. Plans are underway for additional drilling to establish an initial Mineral Resource at the site.

 

Tuesday 18 June, 2024

Lithium brines explorer Patagonia (ASX:PL3) was boosted on Tuesday morning by reports “exceptional” results from well 2 at the Formentera project in Argentina.

“These results are exceptionally encouraging – high porosity, with lithium values concentrating at depth,” PL3 exec chair Phil Thomas said. “I have never seen core porosity at such high levels of 47% at 280m depth and lithium values at that porosity of 572ppm.

“Pumping from well 2 during the 48 hours didn’t reduce the brine level in well 1, 300m away, so we are confident we have a very large aquifer open at depth.”

Independent aerospace composite business Quickstep Holdings (ASX:QHL) was also flying high, after delivering an update to the market on how things are progressing with its role in producing components for the F-35 fighter jet, as it approaches the midpoint of its initial volume buildout.

While the company notes that overall demand for its product related to the F-35 project is going to decline by as much as 8% in the near term, it has streamlined its production process to ensure that program margins remain consistent despite this lower demand.

And privacy-focused photo sharing app Tinybeans (ASX:TNY) has secured a major US strategic partnership with leading digital parenting platform Babylist. The partnership is expected to deliver brand awareness, subscriber growth and sales revenue for Tinybeans in the US, the company says.

Cardiex (ASX:CDX) jumped +15% after reporting a sales update. The company said its sales have been strong, pointing towards potential record revenues for FY24. Significant contributions have come from its pharmaceutical sales division and markets serving research and clinicians. Projected revenues for FY24 are now expected to exceed $12 million, a substantial increase from $6.01 million in FY23. Sales to the research market in May marked a six-month high, and with June historically being its strongest month in this sector. Additionally, under new leadership, CDX’s pharmaceutical team is actively exploring multiple new opportunities, aiming to sustain sales growth from FY24 into FY25.

Thie critical metals (REEs, niobium, copper, gold) junior Rincon Resources (ASX:RCR), announced the identification of three “high-priority” iron oxide copper-gold (IOCG) targets following  the results of a geological survey (DDIP – dipole-dipole induced polarisation) at the Pokali Prospect, within its West Arunta Project in Western Australia. The project is prospective for IOCG style mineralisation as well as “orogenic” gold mineralisation.This latest surveying has highlighted a 2.7km-long ‘induced polarisation’ (IP) chargeability trend along the southern extent of the Pokali IOCG mineral system and remains open to the west and east, although with the caveat that it appears to weaken in the eastern direction.

Antilles Gold (ASX:AAU) announced that it’s undertaking a non-renounceable entitlement offer of one new share for every one held by ‘Eligible Shareholders’ on Thursday, 20 June 2024 at an issue price of $0.004 per share, along with one free attaching option for every two shares applied for. The plan there is to raise up to $3,986,139, to be applied in various ways, but namely towards the completion of an in-fill drilling program, revised Mineral Resource Estimate, Preliminary Feasibility Study and permitting for the company’s flagship Nueva Sabana gold-copper mine development in Cuba.

In early May Antilles revealed results from a Scoping Study regarding the proposed Nueva Sabana gold-copper mine.

Details from that reveal that the Nueva Sabana deposit has a small 3g/t gold cap, an underlying copper-gold zone, and a deeper sulphide copper zone open at depth at 150m, and could potentially transition into the El Pilar porphyry copper deposit which is offset to the south.

Dreadnought Resources (ASX:DRE)’s recent mapping and sampling at Tiger in Mangaroon has confirmed the presence of high-grade copper (Cu), gold (Au), zinc (Zn), and silver (Ag) in multiple layers of exposed gossan spanning approximately 500m. This includes some of the highest grades recorded so far, such as TIG026 with 8.7% Cu, 9.0% Zn, 40.7g/t Ag, and 1.0g/t Au, and TIG027 with 10.5% Cu, 4.6% Zn, 16.3g/t Ag, and 1.0g/t Au. These findings highlight significant mineralization potential in the area.

 

Wednesday 19 June, 2024

Health tech company HeraMED (ASX:HMD)  announced to the market that it has achieved a record number of active and accumulated users in June.

“The number of accumulated mums on the HeraCARE platform reached 3,553 registered mums (+365 accumulated users or 12% sequential growth since 31 March 2024), including 560 active mums (previously record was 517 active users as at 21 July 2022),” the company said.

Locality Planning Energy (ASX:LPE) climbed Wednesday with a takeover bid from River Capital on the table, which has upped its bid from $0.08 per share to $0.105 per share – however, the LPE board is currently recommending that shareholders take no action.

AustChina Holdings (ASX:AUH) says drilling has begun at AUH’s Chenene Lithium Project in Tanzania, targeting multiple high-priority lithium prospects. Initial diamond core drilling involves eight holes initially, with potential for expansion. The first hole has encountered pegmatite starting from a depth of six metres, near surface outcroppings.

Meanwhile, AUH has also signed an Exclusive Binding Heads of Agreement to conduct due diligence on acquiring four licences from Cassius Mining. Drill results will be available once analysis comes back from lab testing, notes AUH.

Chariot Corporation (ASX:CC9) has launched into its North American summer lithium hunt in Wyoming and investors are digging the news – CC9 is currently up about 20% intraday.

The company notes it’s appointed ERM Australia Consultants to assist with the design and implementation of the summer hunt. And that’s a group which reportedly has a good deal of experience when it comes to hard-rock lithium operations locally and globally. The exploration program will be focused on Chariot’s Black Mountain project, but will also extend to a hunt across its six other lithium-caesium-tantalite (LCT) pegmatite projects in Wyoming.

The plan is to drill some 3,000 to 4,000m using portable rigs, before a larger, truck-mounted drilling program.

The highest lithium values from rock-chip sampling to date at the Black Mountain project have been recorded as being between 1.09% and 6.38% Li2O.

Astute Metals (ASX:ASE) is talking about high-grade lithium clay mineralisation in assays returned from the first three holes, indicating the potential discovery of a significant lithium deposit.

Specific highlighted returns include: 59.4m at 1,300ppm Li from 73.2m; 15.2m at 810ppm Li from 15.2ml; and 6.10m at 1,050ppm Li from surface and 12.2m. The company notes that intersections span over 4.6km of strike at the project. With the drill campaign now complete, assay results from a further eight holes should be incoming by the end of July.

Dreadnought Resources (ASX:DRE) is bringing some non-lithium-based gains today.

The company has announced pleased to announced it’s extended the current Tarraji-Yampi drilling set-up to the Gifford Creek and Tiger targets at its Mangaroon project, which is in the Gascoyne Region of Western Australia.

There’s a bit going on at Mangaroon – nickel, copper, PGE, gold, REEs. The company describes it as a “globally significant critical minerals complex” with a combined, independent Resource at the Yin Ironstones and the Gifford Creek carbonatite of 40.82Mt at 1.03% TREO. Dreadnought notes that a reverse circulation (RC) drill rig has been secured to begin the drilling at the Gifford Creek Nb-REE carbonatite targets in July 2024, immediately following the Tarraji-Yampi drill program.

Biotron (ASX:BIT)  jumped after announcing successful results from its Phase 2 trial of BIT225, its lead antiviral drug. The trial, involving 20 HIV-1 infected participants, evaluated the drug’s safety, tolerability, and impact on immune markers over 12 weeks. Preliminary results showed that BIT225 was safe and well tolerated at a 200mg daily dose, with no serious adverse events.

The study also noted significant improvements in key immune markers and maintained viral suppression throughout the treatment period.

Kingsland Minerals (ASX:KNG)’s Leliyn Graphite Project has unveiled a globally significant exploration target, underscoring its potential scale. Recent updates include a substantial graphite resource of 194.6 million tonnes at 7.3% Total Graphitic Carbon (TGC), containing 14.2 million tonnes of graphite. Initial metallurgical tests have yielded a concentrate with over 94% TGC, with ongoing studies optimising flotation for fine flake concentrate.

Future work aims to evaluate the production of spherical graphite as a precursor for Electric Vehicle battery anode material.

Catalyst Metals (ASX:CYL) has successfully repaid a convertible note, reducing its debt to only 2,590 ounces remaining in the form of a gold loan. Over the past year, the company has made significant strides in repairing its balance sheet by repaying $28 million of debt, which originated from the acquisition of Vango Mining and the Plutonic Gold Belt consolidation in July 2023.

The remaining gold loan will be settled in seven monthly instalments and represents just 2.5% of Catalyst’s annual gold production. Currently, Catalyst maintains $22 million in available cash and $30 million in liquidity.

And… Kuniko (ASX:KNI) says geophysical surveys conducted at the Ertelien Nickel-Copper-Cobalt Project in Southern Norway have revealed five new electromagnetic conductors. These surveys, conducted in April and May, targeted areas previously unexplored within the Ertelien intrusion. KNI says the newly identified conductive horizons suggest potential extensions of high-grade sulphide mineralisation. The next steps involve ground truthing these findings through surface mapping and sampling starting in July.

This data, combined with drill results, will guide the identification of new drilling targets aimed at expanding the existing 23 million tonnes inferred Mineral Resource Estimate and potentially upgrading resources from inferred to indicated categories.

 

Thursday 20 June, 2024

Up 177% at the time of writing, Terra Metals (ASX:TM1) was the best of the bunch on Thursday, taking off on news that early-stage drilling has hit multiple copper platinum group element (PGE) reefs from surface, only 15km down the road from BHP’s (ASX:BHP) $1.7 billion Nebo-Babel mine development.

The WA-focused critical minerals junior explorer reports early-stage drilling at the company’s Dante project in West Musgrave has confirmed the multiple “Platreef-style”  PGE reefs from surface.

The results hail from a further 14 wide-spaced, “first-pass reconnaissance” drill holes at Dante Reefs, and these are defined so far over 4.5km of the Reef 1 and 2 targets, with mineralisation open along strike and downdip.

Up about 36% was Hexagon Energy Materials (ASX:HXG) which has completed a funding round which it says takes the company to the FEED stage of its WAH2 low-emissions ammonia project.

The funding round of A$1 million (A$0.94 million net of fees) was completed with funds to be received by tomorrow – 21 June 2024.

HXG says to minimise dilution to existing shareholders, the funding was structured as a convertible note which references future share prices to allow Hexagon to achieve a higher effective issue price from any higher valuations after re-rating as announcements are made, whilst also guaranteeing a minimum conversion price of A$0.02.

Junior uranium and goldie Haranga Resources’ (ASX:HAR) main game is in West Africa, primarily Senegal. The company’s portfolio spans Senegal, Cote d’Ivoire, and Burkina Faso, covering 2,702sqkm across seven tenements, and its share price was up nicely on Thursday as well.

HAR upgraded uranium resources at its Saraya project in West Africa to 16.11 million pounds, with the majority of this within 140m from surface.

Control Bionics (ASX:CBL) was also moving quickly on Thursday morning, after revealing that its autonomous wheelchair module, DROVE, has been officially included as a Class 1 Medical Device in the Australian Register of Therapeutic Goods, which means CBL can now commence commercial sales of the DROVE module in Australia.

And Aldoro Resources (ASX:ARN) was the next best performer, climbing nicely after announcing that the company has picked up some crackerjack rock chip samples at its Kameelburg carbonatite project.

Results from 74  newly collected samples are in and those highlight the REE-rich nature of the carbonatite with TREO(+Y) assays ranging from 1.16 to 9.89%. The most notable niobium assays revealed up to 10.38% Nb2O5 and 9.89% TREO.

 

Friday 21 June, 2024 

K2Fly (ASX:K2F), after the asset management consulting services company revealed that it has entered into a Scheme Implementation Deed with Argyle Bidco that will see the latter acquire 100% of K2Fly for $0.19 per share.

The K2Fly board seems very keen that shareholders take up the offer, as it represents a 90% premium on the company’s 20 June 2024 closing price, and will give shareholders “certainty of value and the opportunity to realise their investment in full for cash”.

Alicanto Minerals (ASX:AQI) was up off the back of a management restructure that will see MD Rob Sennitt leave and former Bellevue Gold (ASX:BGL) chair Ray Shorrocks step in as executive chair.

While Susan Field will take on fellow Bellevue alumnus Michael Naylor’s CFO role, the company has pledged that Naylor and Firefly Metals (ASX:FFM) MD Steve Parsons, formerly the MD at ASX 200 listed Bellevue, will be helping to review potential acquisitions that could reinvigorate the explorer.

The success of Bellevue, which recently entered commercial production in WA, means the star power behind its former players still attracts eyeballs and investor interest at the junior end of the market, says resources nut, crypto king and Legend of the Eastern Newsroom, Mr Robert Badman.

“Alicanto has thus far been focused on two projects of near Viking antiquity: the Falun copper-gold project and the Sala zinc-silver project. Both projects have a long history of high-grade production but have been the subject of very limited exploration in recent times.”

Alicanto on Friday noted that over their operating lives Falun produced in the order of 28mt at 4% copper, 4g/t gold, 5% zinc, 2% lead and 35g/t silver while Sala produced approximately 200Mozs of silver at an average grade of 1,244g/t.

The lift came despite a $1.6m raising for exploration and working capital purposes conducted at a hefty 31.58% discount to the explorer’s last closing price.

Critical minerals explorer Enova Mining (ASX:ENV) reported impressive assay results from its recent sampling at its Poços rare earth element (REE) project in Brazil.

Highlights include findings of rare earth elements (REE) exceeding 2,000 ppm TREO, with notable results such as 3 meters at 2,744 ppm TREO and 3 meters at 3,030 ppm TREO.

The highest assays reached 5,158 ppm TREO, indicating a potential high-grade REE deposit at Poços. These findings confirm the enriched REE potential in the area, suggesting it could host a substantial REE deposit worthy of further exploration.

 

IPOs that happened

Guzman y Gomez (ASX:GYG)

All the details you need are further up on this page, as are links to how it all went down.

 

IPOs that didn’t happen yet

 

Piche Resources (ASX:PR2)

Proposed Listing: June-ish, 2024
IPO: $10 million at $0.10 per share

Blinklab describes itself as a mineral exploration company with multiple, drill ready uranium projects with the potential to host tier 1 mineral deposits.

The IPO, as listed, will be managed by Euroz Hartleys (Lead Manager).

 

Pengana Global Credit Private Trust (ASX:PCX)

Proposed Listing: June-ish, 2024
IPO: $250,000 at $2.00 per share

Pengana Global Credit Private Trust is a listed Investment Trust investing in global private debt.

The IPO, as listed, will be managed by Taylor Collison Limited, Morgans Financial Limited, Shaw and Partners Limited. (Joint Lead Managers).

 

 

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