It was a rough month for equities, but the ASX microcaps January winners list still made for positive viewing.

For context, a quick rewind to 2021 is in order (what a year).

In just 12 months, there were more than 180 IPOs on the ASX (quick mafs: that’s about one every two days).

Afterpay (ASX:APT) departed the boards after Jack Dorsey pressed Go on a historic share-based megadeal.

All while the pandemic raged and Australians navigated a vaccine rollout that was… non-linear at best.

In the second half of the year, inflation was a thing (for the first time in a decade-plus).

But markets digested it.

That was followed by a strong Santa rally, as local stocks ramped into Christmas with their second best month of the year in December.

The end result? After somehow climbing in 2020 despite the most savage market selloff of all time, the ASX closed out 2021 with a punchy 13% gain.

 

Where’s the Panadol?

If December was a party, January represented a wolfpack-in-Vegas level hangover.

Things got icy in a hurry, and analysts attributed most of that wind chill to a realisation that the US Fed isn’t actually messing around when it comes to inflation, and may raise rates faster than expected.

Here’s one you may have heard before; when rates expectations rise, high-growth tech stocks with big earnings projections baked into their valuation multiples get re-rated (down).

Well, it happened.

And despite the good vibes heading into year-end, local tech sectors such as BNPL were already under pressure.

Is there light at the end of the tunnel? The big BNPL players — Block Inc (née Afterpay) and Zip Co climbed off the mat with +7% intraday gains to end the month yesterday.

But once the dust settled on January, it wasn’t a pretty sight.

From January 4 to January 31, the S&P/ASX All Tech index got smashed with a fall of 17.1% — close enough to a bear market (-20%).

In better news, the ASX is also heavily represented by commodities stocks.

As global logistics bottlenecks and supply-side constraints remained prevalent, investors found solace to start the year amid what some believe will be a global commodities super-cycle.

And looking under the resources hood, an additional pattern emerged; ongoing demand for all things lithium, rare earths and base metals.

HERE’S THE TOP 50 SMALL CAPS FOR THE MONTH OF JANUARY 2022

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

CODE COMPANY PRICE 1 MONTH % RETURN MARKET CAP
ODE Odessa Minerals Ltd 0.015 200.0% $9,131,569
CRR Critical Resources 0.105 191.7% $139,308,675
ESS Essential Metals Ltd 0.5 177.8% $120,330,673
1MC Morella Corporation 0.03 172.7% $155,286,420
ARR American Rare Earths 0.38 130.3% $157,033,553
SAN Sagalio Energy Ltd 0.029 123.1% $2,660,582
ZAG Zuleika Gold Ltd 0.037 117.6% $14,871,361
BRN Brainchip Ltd 1.42 115.2% $2,374,391,569
DM1 Desert Metals 0.545 113.7% $21,895,500
PGO Pacgold 0.96 111.0% $34,479,300
SPQ Superior Resources 0.046 109.1% $71,217,034
LM8 Lunnonmetalslimited 0.81 107.7% $61,663,126
GT1 Green Technology 0.875 98.9% $89,570,000
GL1 Global Lithium 1.57 96.3% $210,986,890
CHR Charger Metals 0.74 94.7% $24,824,052
QXR Qx Resources Limited 0.04 90.5% $26,456,131
XTC Xantippe Res Ltd 0.0095 90.0% $47,133,799
CPM Coopermetalslimited 0.33 88.6% $8,916,600
CNB Carnaby Resources 1.375 87.1% $178,339,658
IEC Intra Energy Corp 0.024 84.6% $10,029,418
AUQ Alara Resources Ltd 0.045 80.0% $33,155,174
AS2 Askarimetalslimited 0.35 79.5% $10,899,016
RNU Renascor Res Ltd 0.215 79.2% $397,712,907
HNR Hannans Ltd 0.057 78.1% $148,557,474
CMD Cassius Mining Ltd 0.023 76.9% $7,428,833
CDT Castle Minerals 0.044 76.0% $38,974,441
T3D 333D Limited 0.0035 75.0% $9,814,649
ASO Aston Minerals Ltd 0.17 73.5% $171,755,537
CAV Carnavale Resources 0.012 71.4% $34,023,224
MRR Minrex Resources Ltd 0.061 69.4% $39,444,046
DCX Discovex Res Ltd 0.01 66.7% $25,686,641
ESR Estrella Res Ltd 0.036 63.6% $38,842,443
CLA Celsius Resource Ltd 0.031 63.2% $31,619,342
TTT Titomic Limited 0.285 62.9% $56,289,596
NIM Nimy Resources 0.35 62.8% $16,878,004
LRV Larvotto Resources 0.195 62.5% $6,147,750
LPI Lithium Pwr Int Ltd 0.67 61.4% $219,725,004
AZL Arizona Lithium Ltd 0.145 61.1% $269,381,481
AUH Austchina Holdings 0.011 57.1% $17,975,244
QGL Quantum Graphite 0.22 57.1% $70,320,000
RVS Revasum 0.98 56.8% $93,206,656
KFM Kingfisher Mining 0.295 55.3% $9,074,925
TNR Torian Resources Ltd 0.034 54.5% $35,493,620
88E 88 Energy Ltd 0.0415 53.7% $592,443,048
WCN White Cliff Min Ltd 0.0245 53.1% $13,050,321
BIR BIR Financial Ltd 0.035 52.2% $3,144,521
BNR Bulletin Res Ltd 0.105 52.2% $27,755,758
HIO Hawsons Iron Ltd 0.205 51.9% $153,736,384
SHE Stonehorse Energy Lt 0.021 50.0% $15,057,572
ZNC Zenith Minerals Ltd 0.335 48.9% $123,769,496
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ASX microcaps — January winners

Of the 50 best performing stocks at the small/micro/nanocap end of the market, 45 were resources and energy companies.

Leading the way on a monthly basis was lithium play Critical Resources (ASX:CRR), which caught the market’s attention on January 5 after completing its 100% acquisition of the Mavis Lake lithium project in Ontario, Canada.

That was followed by the discovery of a unique kind of copper mineralisation at what CRR hopes will be a large scale, multi-element, base metals system at its Halls Peak project near Armadale, NSW.

Shares in the company jumped from ~4c to +14c before cooling off into the end of the month.

With lithium featuring heavily at the top end of the January winner’s list, WA-based lithium player Essential Metals (ASX:ESS) was another top performer.

ESS actually has lithium in the ground at its ‘Pioneer Dome’ project (about 11.2Mt of it so far) and is keeping the market updated regarding ongoing drilling results, mining lease applications and capital-cost projections for a processing plant.

Shares in the company got another boost last Friday (+22%) with the release of its quarterly trading update summarising its busy activities schedule.

Had enough lithium yet? Too bad — Morella Corporation (ASX:1MC) ripped higher in January on light news flow (including a speeding ticket from the ASX on January 20).

1MC shares have eased back from their monthly highs, but investors are still banking on more good news from the company’ Fish Lake Valley lithium project in the US state of Nevada — just a one-charge EV ride from Tesla’s Gigafactory.

Another US-adjacent resources player — American Rare Earths (ASX:ARR) — also had a strong month, more than doubling with a gain of ~130%.

ARR, which operates the La Paz critical minerals project in Arizona, posted strong gains through the middle of the month, following news of a US Senate ban on defence-sector contractors buying Chinese produced rare earths by 2026

Is that… 3D printing?

3D printing technology has always held promise, but after a brief hype-phase local investors have demanded proof of scalability from the ASX’s cohort of 3D players.

Largely, that’s meant voting with their feet and taking their investment dollars elsewhere.

But Melbourne-based additive manufacturing company Titomic (ASX:TTT) had a good month, bouncing off recent lows with a gain of 60%.

The company reported its 4C filing on January 31, with operating cash outflows of $3.03m on cash receipts of $674,000. It finished the quarter with $13.786m in the bank.

While TTT gained ground in February, at a close of 28c the stock is still well off its 2019 highs above $2.50, when the outlook for additive manufacturing was more optimistic.

Joining Titomic on the winner’s list was sub-$10m market cap 3D printing company 333D Ltd (ASX:T3D), which ticked higher in the month to 0.35c — good enough for a January gain of 75%.

Pinky and the brain(chip)

Speaking of speculative tech, we’d be remiss if we didn’t mention AI chip technology company Brainchip (ASX:BRN), which was the only non-resources stock to make the top 10 with a monthly gain of more than 100%.

At a close of $1.42, Brainchip is off its January highs above $2.30, following a face-melting rally that took the largely pre-revenue chip developer to a market cap north of $3 billion.

Coinciding with BRN’s January zenith, Stockhead asked what we thought was a fairly-phrased question; Brainchip… what’s the go there?

Shortly after that, the stock got caught in the clutches of a month-end tech meltdown.

But a market cap of $2.374bn is still nothing to sneeze at. And $1.42 marks a hefty premium to the 3c BRN traded at pre-pandemic.

And lastly…

Precious metals (more specifically, gold).

Rounding things out, January also saw the emergence of a couple of junior goldies among the monthly winners.

While the macro forces driving the gold prices will always be debated ad nauseum, small cap investors can look for other investment catalyst — such as a $3m tick of approval from mining luminary Mark Creasy.

That was enough to prompt a surge for Zuleika Gold (ASX:ZAG), which ripped higher after getting direct funding from Creasy to proceed with drilling programs across multiple exploration targets at ZAG’s gold-rich Kalgoorlie projects.

Also near the top of the winner’s list was Pacgold (ASX:PGO), which has climbed consistently since a 53% surge on January 12.

On that day, PGO said that it might be sitting on top of a large-scale, high-grade gold system at its Alice River project in Queensland following a string of positive drill results.

Investors are now keenly awaiting the next round of results, following a 111% gain in Pacgold’s share price for the month of January.

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