• ASX 200 hit by afternoon profit taking, closing at +0.1pc for the day.
  • 9 of 11 ASX sectors were higher, so… two of them weren’t.
  • Small cap gains led by East33, and the world is their oyster.

 

Local markets trimmed most of the early morning gains after lunchtime, as the miners fell away and traders took profits ahead of tonight’s US inflation data and ahead of the June close.

The S&P/ASX200 was up 7.40 points at 3.55pm on Friday to 7,767.00.

 

Via ASX

 

Markets would’ve liked Reserve Bank of Australia Deputy Governor Andrew Hauser’s warning earlier today against setting policy on account of one hot inflation reading – we’re looking at you May.

Hauser said the full second quarter inflation report due at the end of July will provide “more clarity.”

Those comments follow the Monthly CPI Indicator increasesing by 4% in May, up from 3.6% in April and exceeding market expectations of 3.8%.

Markets are now betting on around a one-third chance that the RBA would hike rates in August following the data, while pricing out any chance for an RBA rate cut this year.

Even so, the bullish little benchmark we call home lifted as Wall Street traders eye their own key inflation read tonight and wonder just how the US Federal Reserve might take it in for the next move on interest rates.

Back to the ASX, the four week low of yesterday morning seems suddenly distant as US futures seemed to appreciate the disaster that was the first US Presidential debate for incumbent Joe Biden.

Insurance Australia (ASX:IAG) has secured a cracking 5-year contract with global insurance giants featuring Warrren of Omaha Buffett’s Berkshire Hathaway, which will cap its costs from natural disasters after a horror run.

After a tough few days, the REITs are back in business on Friday. Goodman Group (ASX:GMG), Dexus (ASX:DXS) did okay, while property developer Mirvac (ASX:MGR) also made early gains..

In retail news, Guzman y Gomez (ASX:GYG) has lost around 5%, Adore Beauty (ASX:ABY) has lost around 6% per cent in a signal that investors have not welcomed its acquisition of skincare brand iKOU for $25 million.

Adore is paying with $20 million upfront and the remainder in 18 months.

iKOU, based in the Blue Mountains, is known for its premium range of over 300 organic skincare, bath, body, and home fragrance products. The brand promotes clean beauty with Australian-made and cruelty-free items, operates retail boutiques in key locations and sells through its website and luxury spa partnerships. The acquisition expands Adore Beauty’s offerings into the wellness sector.

And Maggie Beer Holdings (ASX:MBH) stock has also taken a hit down circa 8% after updating the market that 2H would come in under previous forecasts.

The wounds of hard hit lithium miners were kept open on Friday, the majors providing decent representations of market sentiment – Mineral Resources (ASX:MIN) , down 1.7% and Pilbara Minerals (ASX:PLS), off 3.2%.

In other small cap news, Genex Power (ASX:GNX) has successfully refinanced its senior debt for the Kidston Solar Project (KS1) and Jemalong Solar Project (JSP) with a new $162 million facility lasting 5 years.

This all allows Genex to repay its subordinated loan, improve its capital structure, and secure favourable interest rates hedged until 2030, with the facility maturing in June 2029.

Legacy Iron Ore (ASX:LCY) says it’s finished reverse circulation (RC) drilling at its Patricia North tenement. This tenement is strategically important for potentially increasing the gold resources at the Mount Celia Gold Project, where mining began in November 2023.

M3 Mining (ASX:M3M) has discovered new bedrock gold anomalies at its Edjudina Gold Project in WA, with drilling revealing samples up to 4m @ 0.55g/t Au.

The El Capitan gold trend has expanded to 4.5km, and exploration is now focused on the recently granted Old Plough Dam Prospect near Carosue Dam gold operations.

According to the ASX, the benchmark index has lost circa 0.4% over the last five days, but sits 1.8% below its 52-week high.

 

ASX Sectors on Friday at 3.55pm

Via ASX

 

The UNASX

On Wall Street, US stocks edged higher overnight in a quiet session, with the tech-based NASDAQ closing up +0.2%.

Weakness returned to European bourses again, with the French CAC dropping another 1% ahead of this weekend’s divisive election.

Uncertainty over the election’s outcome, combined with the some incresasingly unlikely policy promises by both the left and right, looms very haughtily over financial markets. If either the hard right or left forms a government and pushes through the majority of their plans, there’s likely to be ongoing volatility in both bond and equity markets.

 

US Futures on Friday arvo in Sydney

Via Fox

 

Meanwhile, it could be bouncing… but our old mate Bitcoin hit 5-week lows this week along with the shiny new spot bitcoin ETFs which also had their worst week since late April, bleeding over $900 million in outflows.

Not a single good-lookin’ growth catalyst is on the horizon in the short term, causing negative sentiment around the cryptocurrency.

BTC’s market cap is down to US$1.26 trillion. The total crypto market cap fell to US$2.35 trillion, while bitcoin’s market dominance is still pretty sharp at 54% the broader crypto market.

 

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

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Right out front on Friday are the hardy oceangoing minnows at East 33 (ASX:E33) where the inclement rains impacted East 33’s harvest profile over autumn and winter, from circa 4.0m oysters and is now expected to be circa 3.4m oysters for FY24, however E33 says volumes are going to rebound strongly in FY25.

The good news is that harvesting areas are starting reopen after the rains and while the anticipated harvest volumes have been impacted, there has been “no downgrade to the stock on-hand.”

“Despite volumes being softer than previously anticipated, the farming business’ revenue remains broadly in-line with internal forecasts. This has been achieved through strong farm-gate oyster pricing as the quality and condition of East 33’s stock continues to improve. Further, the business has seen strong hatchery performance through H2 FY24, leading to revenue outcomes for the farming business exceeding internal expectations,” E33 said.

Pointerra (ASX:3DP) has moved into the top spot on Friday at lunchtime, rising after revealing a juicy US government contract. The US Department of Energy (DOE) has awarded the company a US$1.63 million contract for a program to model a range of electric grid resilience investment scenarios by electric utilities.

The company says it’ll all happen using Pointerra3D technology, which can apparently “assess the effects of different resilience investments” amidst projected climate changes. The goal, 3DP says, is to establish a scalable best practice framework applicable across various regions in North America.

Larvetto reports an Exploration Target has been delineated at the Hillgrove project and there could be potential mineralisation located directly below areas of the current Mineral Resources. The stock has jumped about 25% on that.

The Exploration Target of between approximately 670,000 and 1.08M oz AuEq, ranging between approximately 7.4 and 9.46 g/t AuEq for its Hillgrove mineral field in NSW. This is in addition to the existing significant Mineral Resource of 1.4M oz @ 6.1g/t AuEq2.

Delta Lithium (ASX:DLI) was higher on news of a major upgrade to its gold resource at Mt Ida, which has grown the Baldock Deposit up 82% to 4.8Mt @ 4.4g/t gold for 674,000 ounces.

American Rare Earths (ASX:ARR) has added almost 12% after reporting it’s the beneficiary of a $10.7m exploration grant from the State of Wyoming has been approved for American Rare Earths’ Cowboy State Mine REE project.

The Cowboy State Mine is reported to be one of the largest REE deposits on the planet, weighing in at 2.34 billion tonnes at 3196ppm TREO.

ARR says the funds will be used for further exploration work, a pilot processing plant, feasibility studies and economic assessments.

And Diatreme Resources (ASX:DRX) gave back some of its gains from earlier on Friday, after making headway while it has a takeover bid on the table for 100% ownership of Metallica Minerals (ASX:MLM) .

Diatreme – which already holds more than 63% of MLM – extended the deadline on its offer yesterday, but has made it very clear that the current offer of 1.3319 Diatreme shares for every Metallica share is as high as it’s willing to go.

And finally, The Calmer Co (ASX:CCO) had more good news for the market today, with the company revealing that the renounceable rights issue announced on 3 June has closed heavily oversubscribed and raised approximately $2 million (before costs), with the company sorting out a follow-on placement to accommodate investors who missed the initial round.

 

ASX SMALL CAP LAGGARDS

Today’s best performing small cap stocks:

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IN CASE YOU MISSED IT

Vertex Minerals (ASX:VTX) has wrapped up demobilisation of the Morning Star gravity gold plant in Victoria which it plans to refurbish in combination with several items of the Hill End plant to form a logical process flow sheet.

Whilst this work has been occurring, the company has been considering the benefits of pre-concentrating the Reward gold mine ore using optical sorting technologies, including the inclusion of a Tomra ore sorter that utilises laser scanning.

This technology can essentially separate high-grade gold bearing quartz ore from the barren sedimentary country rock before it enters the processing stream – which significantly reduces the quantity of material that requires further processing to recover gold.

Mt Malcolm Mines (ASX:M2M) has delivered a 63.4% gold recovery during a sample processing study conducted at the Golden Crown prospect.

That strong gravity recovery rate is important for mill operators. Studies show every 10% of additional recovery in the gravity circuit has outsized impacts on overall performance.

Gravity is the cheapest processing step used to liberate gold from ore in conventional gold processing, ahead of cyanide leaching and flotation. The more gold recovered by gravity, the more savings are made at the plant on reagents and energy.

Legacy Minerals (ASX:LGM) has identified new drill targets after wrapping up ground truthing at its Central Cobar project in NSW.

The company thinks the 308km² project has all the right ingredients for Cobar-type mineralisation after recent soil results highlighted several areas anomalous in coincident Cobar-type base and precious metal mineralisation pathfinder elements.

These results returned up to 2.63g/t silver, 45ppb gold, 132.5ppm arsenic, 15.3ppm antimony and 886ppm zinc.

Everest Metals Corporation (ASX:EMC) says its bulk sampling program at the Revere gold and base metals project in WA indicates the potential for the existence of a large orogenic gold system starting at surface and continuing at depth.

The company has now completed initial drill and blasting for its 36,000t bulk sampling program in just a small section of the identified Revere Reef with the aim of identifying the extent of the gold carrying reefs systems.

 

At Stockhead, we tell it like it is. While Vertex Minerals, Mt Malcolm Mines, Legacy Minerals and Everest Metals Corporation are Stockhead advertisers, they did not sponsor this article.

 

 

 

 

 

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