Gold and copper stocks move up in the world as S&P rebalances ASX indices

Gold stocks dominated the S&P ASX sector inclusions, as record prices stirred major price runs for large and small cap goldies
MinRes drops out of the ASX 50 after nearly three years in the index, to lead dropouts across battery metals
Spartan storms into ASX 200 alongside Capstone Copper, with Ora Banda, Catalyst and Pantoro among the miners entering the ASX 300

With gold and copper prices in and around record highs it’s little surprise the tea leaves have been read by S&P, the operator of the ASX’s key market indices.

Gold miners are pulling in record profits with inflation slowing and prices sitting above $4600/oz, turning the tables on lithium miners and explorers now facing losses after prices swung from records beyond US$8000/t in 2022 for the spodumene concentrate sold by Aussie producers to a touch under US$900/t early this week.

The largest and most predictable casualty of the shake up is Chris Ellison’s Mineral Resources (ASX:MIN), which has tumbled out of the ASX 50 almost three years after the (now former billionaire’s) mining services, lithium and iron ore firm climbed into the second most exclusive major stock index in the country.

With a market cap of a touch over $4bn, MinRes’ shares have fallen over two-thirds in the past 12 months on the back of weak lithium prices, ballooning debt linked in large part to the construction of the new Onslow Iron project in the Pilbara, and corporate governance issues that will see Ellison step down as MD at some point in the next year and a bit.

The latest shock to the system was the revelation that a haul road for the Onslow Iron project would chew up over $200m in additional capital this financial year, after damage from heavy rain and ramp up lessons saw MinRes make the decision to fully asphalt the route from the Ken’s Bore mine to the Port of Ashburton.

It wasn’t the only critical minerals play falling on hard times.

Iluka Resources (ASX:ILU), down 18% YTD and over 37% in the past 12 months, crashed out of the ASX 100.

The mineral sands miner generated a $231m net profit after tax in 2024, but has been hit by weak industrial demand for its zircon and titanium dioxide products, as well as blowouts on a planned rare earths refinery at Eneabba in WA.

The federal government was forced to up the value of a loan critical to the project’s construction from $1.25 billion to $1.65bn.

See the full list here.

Gold stocks prosper

Smaller lithium and rare earths stocks weren’t spared by the index managers.

Arafura Rare Earths (ASX:ARU), Meteoric Resources (ASX:MEI), Sayona Mining (ASX:SYA) and Wildcat Resources (ASX:WC8) all dropped out of the ASX 300.

So did Syrah Resources (ASX:SYR), which has faced the twin tumult of weak graphite prices and civil unrest in Mozambique, where it operates the Balama mine.

Strongly backed by AustralianSuper, the company has been effectively preserved by its relationship with the US government after the Biden administration offered a range of grant and loan support for a battery anode material plant in Louisiana.

But enough for the doom and gloom, because gold bugs are about to have a bigger say in the direction of the key ASX 200 and ASX 300 indices.

Spartan Resources (ASX:SPR) has capped a triumphant return to prominence for the one-time Gascoyne Resources, narrowly avoiding going into administration for a second time before steamrolling to a $1.85bn market valuation off the back of the high-grade Never Never discovery at its Dalgaranga gold project.

It entered the ASX 200 last week alongside dual-listed copper producer Capstone Copper Corp (ASX:CSC), displacing among others the struggling met coal producer Coronado Global Resources (ASX:CRN).

They weren’t the only gold miners moving up in the world.

Catalyst Metals (ASX:CYL) stormed into the ASX 300, leading to a 10.6% gain on Monday that took the ~100,000ozpa gold miner and owner of the Plutonic gold operations in WA’s Mid West beyond the $1bn market cap mark.

Catalyst’s warpspeed move into the ASX 300 was particularly impressive, given Friday’s rebalance also marked its entry into the All Ords index, which comprises the top 500 liquid companies on the ASX.

Index inclusion, especially in the ASX 300, is massive for liquidity and can provide a short-term boost as institutions and passive funds are forced to buy up to rebalance their portfolios, which are linked to the indices.

Ora Banda (ASX:OBM), the owner of the Davyhurst gold project north of Kalgoorlie, also stepped into the ASX 300 after its market cap pushed close to $1.9bn, while Pantoro (ASX:PNR), owner of the Norseman gold mine, also ran into the index.

Outside the gold miners mining services player SRG Global (ASX:SRG), up over 56% in the past year, also joined the ASX 300.

Further down the line there were plenty of All Ords index inclusions among the junior mining space, largely in gold, including new producers Brightstar Resources (ASX:BTR), Black Cat Syndicate (ASX:BC8) and Meeka Metals (ASX:MEK).

Antimony hopeful Larvotto Resources (ASX:LRV) was the best performing resources stock in percentage gain terms in 2024 and forced its way into the All Ords as a result, as did copper duo Aeris Resources (ASX:AIS) and AIC Mines (ASX:A1M), and bauxite boomer Metro Mining (ASX:MMI).

Unsurprisingly, a host of lithium stocks, including MinRes backed Delta Lithium (ASX:DLI) and Argentine developer Argosy Minerals (ASX:AGY) tumbled out of the All Ords.

At Stockhead, we tell it like it is. While Ora Banda, Spartan Resources, Brightstar Resources and Meteoric Resources are Stockhead advertisers, they did not sponsor this article.