Closing Bell: ASX small caps miss the boat on benchmark’s broad based gain

• Tech, REIT’s rise as commodities energy stocks slide
• ASX 200 up about 0.3%, XEC dives 1.7%
• New lithium names in focus as Leo struggles on debut

The benchmark ASX 200 has caught the scent of a weekend, trading about 0.3% higher on decent gains with tech and real estate offsetting losses in the resources space. Small caps are sharply lower.

Consumer staples, REITs and Healthcare have won the day for the ASX 200, despite a roundly forgettable performance from the resources companies following a run on commodities which led base metals, copper, iron ore and oil all lower – West Texas shed another 3%

Lithium, of course, remains on the nose for the same mercurial reasons it was coming up roses for so long.

Those names – the leading small caps among them – are still bring crueled even when the benchmark rises.

The names which come to mind are Lake Resources, which only kicked off life as a listed firm on Monday. Its shares have just been one continuous lithium nightmare ever since, losing another 16% on Thursday to go with the 40% it’s given away since Tuesday morning.

The other one is Son-of-FireFinch, Leo Lithium (ASX:LLL) which listed today at 11am AEST after an $100m IPO at $0.70.

Its fate, as the sector’s new canary in the lithium mine is detailed below.

Small caps fell 1.7%. We’ll add that to the circa 2% we shed yesterday and make the 4% up tomorrow.

TODAY’S BIGGEST SMALL CAP WINNERS

(Stocks highlighted in yellow rose after making announcements during the trading day).

Scroll or swipe to reveal table. Click headings to sort.

Payroll, HR and human capital management specialist PayGroup (ASX:PYG) says it’s mulling a parachuted $120 million takeover bid from American startup unicorn Deel.

Under a scheme implementation agreement Deel’s Aussie business will snap up PayGroup in an all-cash bonanza.

But Deel’s deal is no steal – lobbing a single dollarbuck at PYG for each shiny new share — I think that might be a 175% premium on PYG’s last close around 36 cents.

TODAY’S BIGGEST SMALL CAP LOSERS

(Stocks highlighted in yellow fell after making announcements during the trading day).

Scroll or swipe to reveal table. Click headings to sort.

Rare earths aspirant Hastings Technology Metals (ASX:HAS) says it’s about to acquire the 30% interest in the Yangibana rare earth project JV currently held by Cadence and its subsidiary Mojito Resources.

For around $9 million worth of fully paid ordinary shares in Hastings, the company will now control 100% of the previously reported 27.42Mt of Mineral Resources as well as, ooh, about 0.73 million tonnes of Ore Reserves which will immediately increase the mine life of the Yangibana rare earths project by approximately one year to a total of 16 years.

Hastings believes there’s substantial opportunity to extend and increase the Mineral Resources from the two main deposits of Yangibana and Yangibana North, the four inferred deposits of Gossan, Hook, Lion’s Ear and Kane’s Gossan, as well as a myriad of other exploration targets within the acquisition ground.

I’m only mentioning this because HAS is down about 5% because the world is not always, or often, fair.

Now. Let’s talk Leo Lithium (ASX:LLL) with Emma Davies who is wonderful.

She says the near-term producer and litmus test for the lithium sector listed today at 11am AEST after an $100m IPO at $0.70.

And as of the time of writing the company was trading at $0.54 per share, down almost 22% from its listing price.

The Firefinch (ASX:FFX) spinoff is focused on the ‘Goulamina’ lithium project in Mali, which is expected to be one of the largest hard rock lithium mines in the world once it enters production in H1 2024.

Goulamina is so advanced because of all the hard work done by Firefinch — then called Birimian – during the last lithium boom.

Firefinch is to retain up to 20% of the demerged Leo, with its shareholders to receive an in-specie distribution of shares in the new company at no cost.

The project is being developed in a 50/50 joint venture with Ganfeng, the world’s largest lithium chemical producer. Ownership will be split between LLL (45%), Ganfeng (45%) and the State of Mali (10%).

Ganfeng is providing funding, offtake, and operational support to de-risk development – making this project one of the few to come online over the next few years.

Leo Lithium is targeting first production of spodumene concentrate SC6 in the first half of 2024.

“We have wasted no time in getting started with development already underway including the 2022 drilling program, procurement of long lead items and commencement of roadworks,” MD Simon Hay said.

ANNOUNCEMENTS YOU MAY’VE MISSED

In a boon for anyone who grumbles about how long it takes their computer to open Word in the morning, Silex Systems Limited (ASX:SLX) has announced that its Zero-Spin Silicon (ZS-Si) project partner Silicon Quantum Computing has made a truly massive breakthrough by building the world’s first integrated circuit at the atomic scale, which effectively opens the door towards building a commercial quantum computer.

It’s two years ahead of schedule, but completely reliant on heavily-enriched silicon that is only available from Russia (Boooo!), but Silex says it’s very close to being able to produce it here in Australia (Yaaaay!).

Resource Development Group (ASX:RDG) says its processing plant construction is nearly complete, commissioning is due to commence, and first production of garnet is fast approaching at its Lucky Bay project. The not-brilliant news is that CapEx on the project has gone up from $60m to $70 – but the good news is that they’ve had a bit more of a poke around, and report a 29% increase in Measured Resource tonnes (up to 41.6Mt) and a 31% Increase in Measured Resource HM (to 2.1Mt).

And last on the list for today is Antilles Gold Limited (ASX:AAU), which copped a “Stop. Think. Do” from the Powers That Be after it was decided that certain info in an earlier announcement was no bueno. Antilles released an announcement to clarify that guidance around the potential in ground valuation at the Antonio polymetallic deposit in central Cuba, “is in conflict with JORC Clause 51 and is considered a forward looking statement with no reasonable basis”. Oops.

TRADING HALTS

Diatreme Resources Limited (ASX:DRX) – Capital raising and a corporate transaction.

Nuheara Limited (ASX:NUH) – Capital raising.

YPB Group Ltd (ASX:YPB) – … Capital raising.

Panther Metals Ltd (ASX:PNT) – Not capital raising! (it’s an exploration results announcement).