March Winners: 17 ASX small caps surged by 100% or more; 16 of them were resources stocks
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March 2022 started off with the jitters.
For the composite microcap ASX Emerging Companies index, February’s 1.9% dip followed on from a 7.7% slump in January.
The first US rate hike since 2018 was on the cards. And if that wasn’t enough, Vlad had just sent the tanks into Ukraine on February 24.
So then, ‘Beware the Ides of March’ (just kidding, we don’t really know what that means).
While the Ukraine still may or may not represent the crux of a new cold war, investors ran some quick numbers to start the month.
First up; oil. Russia supplies a lot of it, and that supply was now in doubt. Result: oil prices up (to eight-year highs).
What about iron ore? That market kept functioning, as prices closed out the month near US$160 (almost double the November lows).
Noticing a theme for this month winners list?
It starts with C and rhymes with ‘oddity’, kind of like when the LME nickel market literally broke in response to Vlad’s invasion order (Russia is also a major global nickel supplier).
The conflict helped gold make a push above US$2,000/oz, before easing back.
In short; it looks to have accelerated a trend that was already in play across the post-COVID global economy.
Consumer prices are rising, supply chains are tight and commodities are in short supply and heavy demand.
In other words, the property boom is over, long live the lithium boom!
Also the battery metals boom (hello copper) and the rare earths boom.
March proved to be a strong month and of the Top 50 ASX performers, we counted four stocks that weren’t in mining, oil & gas or adjacent to those two sectors.
By April Fool’s Day (April 1), it was no joke; the Emerging Companies index had rebounded in March with a 10.1% monthly gain to finish Q1 back where it began the year.
Scroll or swipe to reveal table. Click headings to sort.
|CODE||COMPANY||PRICE March 31 (intraday)||1 MONTH % RETURN||MARKET CAP|
|LRS||Latin Resources Ltd||0.1325||268.1%||$140,804,706|
|AVL||Aust Vanadium Ltd||0.098||188.2%||$271,861,775|
|99L||99 Loyalty Ltd.||0.028||154.5%||$31,311,435|
|ARL||Ardea Resources Ltd||1.625||140.7%||$276,346,568|
|BNR||Bulletin Res Ltd||0.265||120.8%||$75,415,577|
|ARU||Arafura Resource Ltd||0.415||118.4%||$565,902,326|
|COB||Cobalt Blue Ltd||0.93||113.8%||$261,909,485|
|BKY||Berkeley Energia Ltd||0.455||102.2%||$202,837,505|
|AJL||AJ Lucas Group||0.076||100.0%||$68,188,338|
|VMG||VDM Group Limited||0.002||100.0%||$13,855,322|
|FHE||Frontier Energy Ltd||0.245||88.5%||$58,403,033|
|MAY||Melbana Energy Ltd||0.13||85.7%||$380,609,909|
|IKW||Ikwezi Mining Ltd||0.95||84.5%||$38,617,475|
|QXR||Qx Resources Limited||0.074||80.5%||$54,836,913|
|IXR||Ionic Rare Earths||0.091||78.4%||$296,748,258|
|FAU||First Au Ltd||0.016||77.8%||$10,974,753|
|RMI||Resource Mining Corp||0.035||75.0%||$13,384,885|
|ESS||Essential Metals Ltd||0.555||70.8%||$117,244,193|
|EUR||European Lithium Ltd||0.155||70.3%||$161,263,816|
|HIO||Hawsons Iron Ltd||0.27||68.8%||$185,913,767|
|BOT||Botanix Pharma Ltd||0.095||66.7%||$84,663,360|
|AGY||Argosy Minerals Ltd||0.4925||64.2%||$623,054,082|
|GME||GME Resources Ltd||0.096||62.7%||$54,053,159|
|BRK||Brookside Energy Ltd||0.026||62.5%||$89,714,941|
|ERG||Eneco Refresh Ltd||0.045||60.7%||$12,256,126|
About 20 ASX stocks doubled up (or more) in March and they were all resources stocks, except for a little-known Chinese financial services company (more below).
And at the pointy end of this month’s list, it was all about the hits. Specifically, copper hits.
Tempest Minerals (ASX:TEM) went parabolic last week, after flagging multiple sections of strong copper mineralisation from the first drill-holes at Orion, part of its flagship ‘Meleya’ project in WA.
(After climbing from 2c to 18c [800%] in six trading days, the stock cooled off yesterday following a results update from its second drill-hole.)
Tempest’s find kicked off a historic run of big copper hits, as Recharge Metals (ASX:REC) followed up the very next day with 300m worth of mineralisation of its own at the ‘Brandy Hill South’ project, also in WA.
For a clue as to what happened next, here’s a video of Peter Siddle’s classic hat trick (to the tune of Titanic).
Culpeo Minerals (ASX:CPO) made it three from three, surging by +200% after hitting the copper motherlode in its very first drillhole at the historical ‘Lana Corina’ project in Chile.
In an interview with Stockhead at the start of this week, Pilbara Minerals boss Ken Brinsden said current prices for lithium spodumene US$5000/t are the equivalent of US$6000-7000/oz gold prices.
And what’s more, global supply is still so tight that the current lithium boom is here to stay. Strap in and hold on tight.
In addition to those lithium large caps noted above, plenty of lithium stocks still occupied the pointy end of last month’s small caps winners list.
Up near the top was Riversgold (ASX:RGL), which is now confusingly named after recently flagging plans to acquire four lithium-prospective tenements in the Pilbara.
In the current market, getting involved in lithium-prospective tenements may be enough to see your share price more than quadruple in the space of a month.
Those gains were assisted by two positive results from rock-chip sampling at RGL’s sites and on March 31 it flagged plans to raise $987,374 via a share issue.
The issue gives RGL shareholders the right to buy one share for every eight they own. And at just 1.7c (RGL’s March 31 closing price: 7c), the new RGL stock is likely to be in high demand.
Also running hot last month was Brazil-based lithium play Latin Resources (ASX:LRS), where drill results at its Salinas project “have confirmed a potential new high-grade lithium discovery”, the company said last week.
Of note from the company’s latest assay results are sections of mineralisation with +2% lithium, which is better than the industry standard of around 1%.
In terms of exploration, market standards are often high for junior O&G players compared to, say, the first sign of any mineralisation for junior battery metals stocks.
But the macro forces supporting +US$100/barrel oil prices have flowed through to the junior end of the market, with two such players in last month’s top 50.
Leading the pack was Cuba-based Melbana Energy (ASX:MAY), which posted a string of good updates from its Alameda-1 well which briefly saw the stock hit 19c — a gain of ~10x from where it started the year (2c).
Investors are now awaiting flow testing results from the well, after Melbana’s drilling program at the site reached total depth earlier in March.
For some extra reading in this sector, Stockhead’s Emma Davies last week recapped the five best performing O&G small caps of 2022.
So, amid that resources onslaught, which non-rezzy ASX companies managed to stand out with healthy gains of their own last month?
The best of the rest was marketing technology company 99 Loyalty (ASX:99L), which describes itself on its website as “China’s leading loyalty technology service provider in financial services”.
99L posted strong gains at the start of March following the release of its preliminary financial report on February 28.
That was despite flagging a 10% fall in revenues to $42.95m, flowing through to a net loss of $15.32m, down from a $6.51 profit in the previous financial year.
99L blamed the slowdown on domestic COVID-19 restrictions in China, along with “financial risk control measures” by Chinese authorities which “led the company’s enterprise clients to being cautious in loyalty and marketing activities”.
However, 99 Loyalty was optimistic about 2022, where it said it’s positioned to benefit from the banking sector regulations in the country.
“We expect a concentration and rationalisation of the industry structure leading to 99 Loyalty Technology, as a licensed insurance brokerage service provider, positioned to benefit from the new regulatory environment,” 99L said.