• The ASX dropped, dragged down by Real Estate and Mining stocks
  • Qantas cuts former CEO’s compensation by $9.3m
  • Fears of a US recession are growing, with the Sahm Rule signalling potential trouble

 

A selloff in Real Estate and Mining stocks pushed the ASX modesty lower by 0.3% on Thursday.  

Overnight, the S&P 500 swung to a loss after a disappointing US$42 billion Treasury sale, with investors avoiding the 10-year US bond auction. 

The weak auction highlighted the delicate state of investor confidence following recent market turmoil.

But are the fears about a US recession, sparked by a weak jobs report last week, exaggerated?

The weak jobs data  triggered what’s known as the “Sahm Rule”. Named after former Fed economist Claudia Sahm, the Sahm Rule signals a recession when the unemployment rate rises by 0.5% or more from its lowest level in the past year.

“We might not be there, but we’re getting uncomfortably close to a US recession,” Sahm said last week.

On the ASX today, the Real Estate sector was dragged down by Goodman Group (ASX:GMG), which fell by 2% and Mirvac (ASX:MGR), which slumped by 9%.

Mirvac’s shares were dumped after the property developer said it expected lower earnings and dividends in FY25 due to rising costs impacting the profit margins of its apartment projects.

In the mining sector, declines were led by Evolution Mining (ASX:EVN) and Northern Star (ASX:NST). 

Diversified producer IGO (ASX:IGO) shed 2.5% after reporting that it might sell off some of its nickel assets.

Qantas (ASX:QAN) also slipped 2% after releasing its governance review report, which found that the Qantas board made mistakes that led to reputational damage, but no deliberate wrongdoing was found.

Qantas was previously criticised for its mishandling of customer Covid credits and pricing practices after the pandemic. 

The airlines has now decided to cut former CEO Alan Joyce’s payout by nearly $9.3 million after losing legal battles and settling with the ACCC.

 

What else happened today?

Across the region, most Asian stock markets recovered after early declines as investors reacted to central banks’ interest rate signals.

 Japan’s Topix Index bounced back, while stocks in China and Hong Kong also rose.

The US dollar weakened against currencies like Aussie dollar and the yen. 

Investors will be closely monitoring US jobless claims data due later today (US time) for further insights. 

Recent market turmoil has been driven by concerns that the Fed’s decision to keep interest rates at a 20-year high could lead to a more severe economic slowdown.

 

ASX SMALL CAP LEADERS

Today’s best performing small cap stocks:

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Ovanti (ASX:OVT) lifted after delivering an update on some allegedly embezzled funds, revealing that court action is looming to recover approximately $6.5 million that the company has identified as missing, with a further $15.9 million in transfers out of its Malaysian subsidiaries that are being investigated.

 

Heavy Minerals (ASX:HVY) was one of today’s biggest market winners after completing Tranche 1 of non-dilutive royalty funding, raising a total of $2.1m. It’s executed a royalty agreement with Campbell Transport and raised $1.25m, adding to the previously raised $850,000 from investors so it can keep plugging away at its flagship Port Gregory garnet project near Geraldton, WA.

The royalty funding and cap raise clears the path for HVY to complete a PFS and kick off a bankable feasibility study for defined 166Mt at 4% total heavy minerals containing 5.9Mt of garnet.

Garnet sand is a good abrasive and a common replacement for silica sand in sand blasting, waterjets to cut steel and in water filtration. Demand is forecast to outstrip supply in the coming years with a widening deficit already happening this year and into the future unless additional supply comes online.

 

Riedel Resources (ASX:RIE) climbed after announcing that David Groombridge will retire as chief executive officer of the company, with effect from 2 November 2024.

 

Early doors findings from Kali Metals (ASX:KM1)’s review of historic drill core databases have revealed multiple spodumene occurrences at its Spargoville project in the Higginsville lithium district in WA, where Mineral Resources’ (ASX:MIN) 26.5Mt Bald Hill and 71.3Mt Mt Marion lithium operations are producing.

KM1 has pinpointed 170 pegmatite intervals that occur in 41 diamond drill holes and 37 RC holes, mainly west of Spargo’s Reward and says it will hit the ground to investigate the prospectivity further.

To date, the core review program, which is only 51% complete, has concentrated on the area around Westgold Resources’ (ASX:WGX) recently acquired Spargo’s Reward open-pit gold mine. It’s also shouted out some results of an RC drill campaign out of its Widgiemooltha lithium project north of Liontown Resources’ (ASX:LTR) 15Mt Buldania development, with hits of up to 1.44% Li2O from first-pass RC drilling. Exploration work is continuing during Q3 to delineate targets for drilling and shares in the junior are up 23.3% to trade at 18.5c at time of writing.

 

Alara Resources (ASX:AUQ) was up no on news, although the company has received more kit from Italy to process tailings at 137tph through its Wash-hi Majaza copper processing plant in Oman as a permanent solution to a tailings management issue.

AUQ says it will complement a couple of new filter press units recently ordered from China and the two units, which have a combined concentrate processing capacity of 75-80tph, are intended to increase plant production to 85% of its rated capacity by the end of February 2025.

The producer has also made its second shipment of copper and gold concentrate in 50 containers to commodity house Trafigura and expects to ramp up sales after sourcing solutions to its processing issues.

 

Meanwhile four new copper and nickel targets have been sounded out at Asian Battery Metals’ (ASX: AZ9) Yambat project in Mongolia as the explorer has completed just over half of its 2500m drill campaign at the Oval prospect within the tenure. While conducting regional exploration to the north of Oval, at a prospect now named Copper Ridge, gold mineralisation is showing up and has spurred the junior to get boots on the ground to investigate further.

 

ASX SMALL CAP LAGGARDS

Today’s worst performing small cap stocks:

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IN CASE YOU MISSED IT

Rumble Resources (ASX:RTR) has stumbled upon an unforeseen discovery at the Western Queen gold project in WA with drilling results returning very high-grades of tungsten, a critical raw material essential to transport, mining and photovoltaic cells.

Summit Minerals (ASX:SUM) has picked up six tenements in Brazil, including one strategic tenement called ‘Equador North’ on an existing mining lease, adjoining SUM’s Equador niobium and tantalum project.

C29 Metals (ASX:C29) has secured approval for initial geological work at the Ulytau uranium project in Kazakhstan, within a whisker of the historical Bota-Borum uranium mine – one of the largest uranium deposits in the former Soviet Union.

Greenvale Energy (ASX:GRV)  has secured a six-month permit extension that will enable regulatory approvals to be finalised for its current Year3 work commitments at EP145 – the West Walker helium project – in the NT.

The approval from the NT Department of Industry, Tourism & Trade provides Greenvale with additional time to complete the permit work program after it identified potential delays in obtaining the required environmental approvals for the planned Wild Horse 2D Seismic Program at the project.

The approval for the permit extension means that Greenvale will now have until 21 February 2025 to complete the acquisition of a 100km 2D seismic survey, seismic data processing and interpretation, identification of well locations and detailed well planning and preparation.

Finder Energy Holdings (ASX:FDR) is undertaking an entitlement offer at $0.048 per new share to raise up to around $6 million to support completion costs associated with its acquisition of a 76% interest in PSC 19-11 in offshore Timor-Leste and go-forward work program as operator of PSC 19-11.

The PSC contains four discovered undeveloped oil fields, including the fully appraised Kuda Tasi and Jahal fields, enabling rapid progress to production with additional upside provided by low-risk appraisal and exploration opportunities.

Notably, major shareholder, Longreach Investment Capital, has provided an irrevocable commitment to take up its full entitlement under the offer, representing approximately A$3.2 million.

The directors and key management personnel have also confirmed their intention to take up their full entitlements.

 

Blinklab (ASX:BB1) has announced a new study to run in partnership with Monash University to evaluate the company’s medical device able to monitor the therapeutic effects of ketamine on cognitive processes.

The company is developing smartphone-based, AI-powered diagnostic tests for neurological disorders and says the study results could help facilitate cognitive behavioural therapy outcomes in patients with psychiatric conditions such as depression, schizophrenia, epilepsy, and post-traumatic stress disorder (PTSD).

 

Imricor Medical Systems (ASX:IMR)says the first real-time iCMR-guided cardiac ablation in the US has been performed at The Johns Hopkins Hospital in Baltimore as part of Imricor Medical Systems’ pivotal clinical trial supporting US Food and Drug Administration (FDA) approval of its products.

Johns Hopkins is the second hospital to join its Vision-MR Ablation of Atrial Flutter (VISABL-AFL) clinical trial, which is looking to make the procedure safer, faster, improve success rates and be more cost effective.

The trial for FDA approval requires 91 patients to be treated with an early exit at 76 if the company meets the safety and efficacy end point of 80% success after a seven-day follow-up.

 

TRADING HALTS

Great Western Exploration (ASX:GTE) – pending the release of an announcement to the market regarding a fund raising.

Medallion Metals (ASX:MM8) – pending an announcement in relation to a capital raising.

St George Mining (ASX:SGQ) – pending an announcement correcting mis-information circulating in the market in relation to the Araxa Project.

BPH Energy (ASX:BPH) – pending a material announcement for the purpose of considering, planning and executing a capital raising.

Actinogen Medical (ASX:ACW) – pending an announcement of the results of the XanaCIDD Phase-2a clinical trial.

Vertex Minerals (ASX:VTX) – pending release of an announcement in relation to a proposed capital raising.

Pacific Smiles (ASX:PSQ) – pending an announcement to the market regarding the outcome of a Scheme Meeting held at 11:30am, 8 August 2024.

Kincora Copper (ASX:KCC) – pending the execution of a material joint venture agreement.

PharmX Technologies (ASX: PHX) – pending an announcement regarding an impending decision of the Supreme Court of Victoria involving its wholly owned subsidiaries, Corum Systems and PharmX.

Woomera Mining (ASX:WML) – pending an announcement regarding a corporate transaction and capital raising.

Sarytogan Graphite (ASX:SGA) – pending release of an announcement regarding a capital raising.

 

At Stockhead, we tell it like it is. While Rumble Resources, Summit Minerals, C29 Metals, Greenvale Energy, Finder Energy Holdings, Blinklab and Imricor Medical Systems are Stockhead advertisers, they did not sponsor this article. 

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