Closing Bell: Nothing crypto in small caps commodity crunch
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Aussie small caps have copped a commodities shellacking to start the week as materials, metals and energy stocks bear the brunt of the economic angst cowering world markets from Korea to crypto.
I’m not going to over complicate this – it’s not a marriage, an energy market or something written by our direct competitors over at Bloomburgers – but these upside surprises on inflation have scared the wazoo out of normally flatlining central bankers who’ve transferred the worry onto the rest of us by into upping the price of how much it costs to borrow.
The boys at the RBA got the ball rolling uphill by 0.5%. Last week, the Fed lifted by 0.75%, and the three weaker anglo sporting nations 0f Canada, NZ & the UK all continued to raise rates where poss.
Even the Christine Lagarde vehicle at the ECB was moving towards rate hikes from July.
In the face of more aggressive inflation, this slightly panicky catch up hiking is in turn making the risk of a recession more likely, which in the end eats at company profits and depresses investors and share prices.
Cryptocurrencies have kept bleeding everywhere over the weekend, with Bitcoin falling below a sentiment-busting US$20,000 mark, before rebounding overnight, in their own messed up way.
And as my esteemed colleague The Chiat wrote earlier today, in between his eclectic DJ sets at an all nite internet meme stock disco, the market is getting poleaxed by soft Chinese demand sapping the juice out of iron ore prices.
Josh says at lunchtime the iron ore biggies were down bigly.
(Stocks highlighted in yellow rose after making announcements during the trading day).
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We like Culpeo Minerals (ASX:CPO) if only for the yo-yo nature of its insane gains. Today it’s announced multiple high-grade copper hits at its Lana Corina project in Chile, with the standouts being:
That was enough to have investors piling on like footy stars in a pub fight, sending Culpeo’s price up a very handsome ~70.0% before lunch, which is not a bad morning’s work for a little explorer.
On the flipside Reuben says this is now the third time Culpeo’s gone all 50% in one session and has given much of the gains back swiftly thereupon.
Elsewhere, Infomedia surged 6% after receiving a further conditional non-binding indicative proposal from Solera to acquire the company for $1.70 a pop.
And kindly Gregor likes the way Control Bionics (ASX:CBL) has set about reversing some of last week’s losses with a bio-healthy ~40.0% gain, and Douugh (ASX:DOU) says it’s hit a major market compliance milestone has helped the personal finance super-app developer to climb up into the twenty-somethings.
(Stocks highlighted in yellow fell after making announcements during the trading day).
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Lake Resources (ASX:LKE) has found some instant karma in leaving behind the warmth and collegiate atmosphere of the smaller cap camp, by nose diving some 15% on its first session of trading on the ASX200 index.
The lithium play, which has a $2.1bn market cap, was the worst performer on the benchmark index and is probably already staring at relegation.
Having assumed the favoured position after names like Tyro Payments (ASX:TYR) and PolyNovo missed the latest cut, LKE still cuts a fine figure on the benchmark, its share price is still up circa 25% for the year to date and way over 300% on this time last year.
Angel Seafood (ASX:AS1) has shucked its last oyster as a going public concern and will stop trading on the ASX on Tuesday. The last hurrah follows the Coffin Bay oyster business takeover by Laguna Bay, the Queensland agriculture investor.
The Christmas-2021 sale for well above $32.3 million came amidst a sales ban for the oyster business hit by the clam killing vibrio parahaemolyticus disease. Angel only listed in 2018, after raising $8m at 20 cents per share with Laguna ensuring Angel boss Zac Halman retains circa 10% of Angel’s issued share capital since the oyster whisperer is still seen as the pearl in Angel’s business model.
Crater Gold Mining (ASX:CGN) has sent out a messenger pigeon with news of metallurgical testing from the Golden Gate Graphite Project at Croydon in North Queensland that’s sure to put some lead in the ol’ pencil. Crater Gold supremo Russ Parker says the latest results demonstrate “high graphite recovery from the feed mineralisation into a flotation concentrate and achieving a high graphite concentrate”, with the test results showing flotation recovery of 89.4% graphite obtained from an 850 micron sample at a concentrate grade of 76.9% carbon.
Also in shiny stuff news, Tombola Gold (ASX:TBA) has signed a binding term sheet to buy 100% of the Lorena Mine and Processing Facility, a mere 30km up the road from its flagship Mt Freda Gold Mine in Cloncurry, Queensland. The purchase includes the fully permitted mining and exploration leases, the existing open cut gold and copper mine, a 250,000-300,000 Tonne per annum Gold / Copper processing plant, and permitted tailings storage facility. The whole lot will set Tombola back 50m shares in Tombola at an implied price of 6c (A$3m), and $5 million in cash, with $1 million up front and the balance to be paid over a 6-9 month period. Nice.
After an early-morning trading halt, Cooper Energy (ASX: COE) broke the news that it’s entered into a binding agreement to acquire the Orbost Gas Processing Plant from APA Group’s (ASX:APA) Orbost Gas Plant Pty Ltd. There was also a really, really long investor presentation with lots of pages with pictures and graphs and stuff which took forever to read… but the important details are that Cooper is set to pay between $270-330 million – $210 million due at financial close of the acquisition, $40 million after 12 months, $20 after 24 months, and variable deferred performance payment ranging from $0-20 million (due after 24 months) and $0-40 (due after 36 months).
Cooper Energy (ASX: COE) – announcement concerning the Orbost Gas Processing Plant.
Black Mountain Energy Ltd (ASX:BME) – announcement regarding a Letter of Intent.
Zelira Therapeutics Limited (ASX:ZLD) – announcement in relation to its Scheme Implementation Deed
Health House International Limited (ASX:HHI) – announcement in relation to its Scheme Implementation Deed
Resapp Health Limited (ASX:RAP) – COVID-19 Data Confirmation Study results due.
DiscovEx Resources Limited (ASX:DCX) – Material capital raising.
Lode Resources Ltd (ASX:LDR) – assay results from on-going drilling program at Webbs Consol Silver-Base Metals due.