Garimpeiro has been busy assembling 12 stocks in 12 different commodities to stuff in the Xmas stocking.
The focus has been finding those with leverage to exploration success and/or enhanced development prospects because of some of spectacular commodity price gains in 2021, and what 2022 has in store.
So in no order or preference, here we go:
IRON ORE – Genmin (ASX:GEN): Trading at 21c for a market cap of $85m. Andrew Forrest’s Fortescue has put the spotlight on Gabon’s iron ore potential in a deal that could lead to Fortescue’s involvement in the development of the Belinga project in the central West African nation.
But Genmin is years ahead of him. It has just signed two potential supply deals for 4mtpa with Chinese groups for its advanced Baniaka project as its works towards securing formal offtake agreements to underpin the high-grade development.
ZINC – Eastern Metals (ASX:EMS): Trading at 19c for a market cap of $10.7m. A lightly capitalised explorer holding about $6m in cash to fund its 2022 exploration program across base and precious metals interests, with a potential lithium leg part of its story.
Immediate interest is in a likely mid-January start to a drilling campaign at the advanced Browns Reef zinc-silver-lead project in central NSW.
It is the one that comes with an exploration target of 27-37mt grading 1.3%-1.4% zinc, along with other metals. The drilling will be zeroing in on higher grade mineralisation which could sweeten up project economics.
NICKEL – Panther Metals (ASX:PNT): Trading at 17.5c for a market cap of $11m. It’s new to the ASX and its modest market cap means it is one of the most leveraged to exploration success nickel explorers out there.
Drilling is underway at the Coglia laterite nickel-cobalt project where previous work has allowed an exploration target to be worked up. It’s big too, at 30-50mt grading 0.6%-0.8% nickel with good cobalt grades.
The drilling is all about proving up a maiden mineral resource estimate, as well as testing the potential for sulphide nickel at depth. It is in the same neck of the woods as Glencore’s 40,000tpa Murrin Murrin laterite nickel operation.
GOLD – Traka (ASX:TKL): Trading at 1.3c for a market cap of $8m. The seasoned campaigners running Traka have worked up an interesting story at its Mt Cattlin gold-copper project.
Apart from a batch of high-grade gold hits at historic workings, the company has identified the potential for a large-scale porphyry system at depth. Its small market cap provides lots of leverage to future exploration success.
SILVER – Investigator (ASX:IVR): Trading at 6.4c for a market cap of $85m. Investigator is all dressed up and ready to go at its Paris silver project in South Australia.
It is a 55m ounce deposit, given the project all the leverage that could be expected to silver’s robust outlook thanks to solar panels and EVs adding to the demand outlook. Should silver break out in 2022 as some suspect, Investigator will pull the trigger on a development.
GRAPHITE – Black Rock (ASX:BKT): Trading at 20.5c for a market cap of $177m. Elon Musk has been fretting about graphite supplies for the anode side of batteries. He should give Black Rock a call.
It has been methodical about bringing its Mahenge project in Tanzania into production. It’s capable of meeting 5% of global demand for an initial 26 years. The government is now on board with a free-carried 16%, removing previous uncertainty on the issue to make project financing all the easier to arrange.
LITHIUM – Breaker (ASX:BRB): Trading at 29.5c for a market cap of $96m. Lithium stocks ran hard in 2021. So it is difficult to find some value amongst the explorers.
Breaker is a way around the problem. Its market cap is all about its 1.4m ounce Bombora gold project, with nothing priced in for its emerging Manna lithium story. To capture value for the lithium, it could well spin it off into a new ASX company.
URANIUM – A-Cap Energy (ASX:ACB): Trading at 12c for a market cap of $138m. It was a breakout year for uranium, with the price for the nuclear fuel rising to an eight-year high. The rally has prompted strong share price gains for the uranium stocks but A-Cap is yet to benefit as much as the other players.
It is hard to ignore the scale of its Letlhakane project in Botswana. A-Cap also comes with nickel exposure through its Wiluna project.
TIN – Stellar (ASX:SRZ): Trading at 2.3c for a market cap of $19m. Another case where a bumper commodity price has yet to be reflected in a company’s valuation.
Tin has doubled this year to 10-year highs. It stands to reason then that the development prospects of Stellar’s Heemskirk project in Tassie have also improved dramatically. A 2019 study pointed to all-in sustaining costs of $US13,100/t. Tin last traded at $39,500/t.
MANGANESE – Firebird (ASX:FRB): Trading at 39c for a market cap of $21m million. It is working on a low capex and fast start-up of a its Oakover manganese project in the East Pilbara now that it has confirmed a big supporting resource base.
Planning to eventually become a value-added producer of manganese sulphate for lithium-ion batteries is also underway. It is a similar playbook that Element 25 followed at its Butcherbird project, now an exporter. It has a $195m market cap.
TUNGSTEN – EQ Resources (ASX:EQR): Trading at 5.9c for a market cap of $79m. Currently Australia’s only primary tungsten producer, a strategic metal if there ever was one.
It has been working off low-grade stockpiles from previous operations but is well advanced in planning a bigger future from resuming mining in the open pit and going underground.
The bigger plan all comes together in the first quarter of 2022 with the release of a scoping study into the underground development.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.