Closing Bell: A lithium leak is draining the small cap battery boom
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The Emerging Companies Index has got a lithium leak. We don’t where, we don’t know why. It was down more than 2.7% and has kinda rallied late to close at 2.3%.
The ASX200 climbed steadily in late play after a volatile session – lifted by the major players – the big four banks and the iron ore trio ending 0.3% higher.
The idea’s been met in the SH newsroom with scepticism (Yeo, Adams) and derision (Farquhar, Chiat) and even a little confusion (me and Gregor) but this report that China’s BVD Co has struck some kind of agreements to snap up six wonderfully potent and ready to roll African lithium mines (that can produce over 25 MTPA of lithium ore and deliver first Li next month) is the ‘real reason’ why so many brave wee lithium stocks have been ‘obliterated’ The Australian says, attributing the idea to Shaw & Partners analyst James Nicolaou.
“Even from an industry perspective, this would have a huge impact to the current market dynamic, as these lithium mines could meet the need for production capacity of Chinese EV industry for at least several years,” Mr Nicolaou told the Oz.
“So in other words, would mean that China would have their own direct Lithium supply and capacity sorted as the rest of the world scrambles to secure supply.”
What we do know is ASX lithium miners fallen today and dragged the spunky little firefighter we call the XEC down with them.
Well the March quarter Gross domestic product numbers are a bit of a bummer. They’re not the end of the nation, but the big post-COVID cashed-up bingey-splurgathon did not quite happen as some hoped it might.
A 1.5% rise in household spending lifted GDP by 0.8% putting year-on-year growth at 3.3%. While that’s way off the 4.2% of the previous quarter it comes in above the circa 3% growth forecasters were bracing for.
The rise in household spend and to a lesser extent government and business wasn’t enough to make up for the shortfall in quarterly net exports.
(Stocks highlighted in yellow rose after making announcements during the trading day).
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Castillo Copper (ASX:CCZ) has declared a maiden 21,556 tonne cobalt resource (64 million tonnes at 318 parts per million) at the BHA project in NSW.
The resource at BHA’s ‘East Zone’ — at relatively shallow depths between 2-80m — also includes 44,260t of copper (63Mt at 0.07%).
The company says there’s a whole lotta other prospects still outside the current mineral resource estimate, so they reckon there’s still “considerable potential” to expand the cobalt-copper resource with new extensional drilling.
CCZ says it will re-assess the potential of the West Zone for cobalt mineralisation, given it is proximal to Cobalt Blue’s (ASX:COB) advanced 81,000t Broken Hill cobalt project (BHCP) — the only large scale, non-African, greenfield primary cobalt project in the world.
Astro Resources (ASX:ARO) has managed to buck the lithium-bashing trend, posting a decent jump on the back of the announcement it’s staked some highly-prospective lithium claims in the Kibby Basin, Nevada – and grabbed 80% (with the right to increase to 100%) of Greenvale Mining’s Georgina IOCG Project in the new East Tennant Mineral Province of the NT.
Greenvale Energy (ASX:GRV) shares also climbed after it let everyone know that it’s getting serious about geothermal energy production by buying Within Energy, bagging its three tenure applications in Queensland along the way.
Nordic Nickel (ASX:NNL), the latest listed nickel sulphide explorer is ahead by double-digits. NNL raised $12m at 25c per share via its IPO , the funding will go towards a portfolio of assets in Finland’s Central Lapland Greenstone Belt (CLGB).
“Despite hosting some of the world’s largest nickel and gold deposits such as Boliden’s Kevitsa nickel-copper-gold mine and Anglo American’s Sakatti copper-nickel-PGE deposit, this region is significantly under-explored for komatiite/intrusive hosted nickel deposits using modern exploration techniques – unlike more mature belts like Kambalda in Western Australia,” NNL managing director Todd Ross says.
(Stocks highlighted in yellow fell after making announcements during the trading day).
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DC Two (ASX:DC2) has pulled off an epic power move, shifting ‘behind the meter’ for its energy supply through a Power Purchase Agreement with LMS Energy. DC2 says the deal will decrease its power bill by allowing it to deploy its transportable data centres next to an LMS bio-gas facility in Victoria – and allow DC2 offer customers a genuine green product offering.
Meanwhile, the woes look like they’re continuing for Sustainable Nutrition Group (ASX:TSN), which has asked for an extension to its voluntary trading suspension through to 30 June, to give the board time to sort through a few things. SNG initially asked to be a market wallflower after it lost a strategic customer supply agreement and CEO and Managing Director Neale Joseph stepped down on 26 May.
And Pilbara Minerals (ASX:PLS) has offered up a glimmer of good news after the company was spanked pretty hard throughout the day – to the tune of a ~20% drop in price. Pilbara says it’s managed to lock in key commercial terms for a JV with Calix (ASX: CXL), which will see Calix’s calcination tech incorporated into a demonstration refining line at the Pilgangoora Project. Pilbara says a $20 million grant from the Federal government helped grease the wheels of the agreement, which will see a 55-45 ownership split of the JV, in its favour.
X2M Connect (ASX:X2M) says its Asia footprint just got bigger with a suite of new contracts signed in China and Taiwan, take its total number of contract wins in this all-important Asian market to eight.
Inclusive of these new contracts, X2M Connect’s China-based revenues over financial year 2022 (FY22) to date exceed $3.3 million.
Credit Clear Limited (ASX:CCR) – trading halt, pending an anticipated capital raise
Kopore Metals Limited (ASX: KMT) – trading halt, pending an anticipated capital raise
Meteoric Resources NL (ASX:MEI)– trading halt, pending an announcement regarding a potential asset disposal
Victory Offices (ASX:VOL) – trading halt, pending an update on its portfolio of office locations