Monsters of Rock: BHP and gold miners carry materials to a Monday win

Fortescue falls more than 5% but BHP and gold miners carry ASX materials sector to a slight gain
Imdex and Sayona shares tumble on results and executive departures respectively
OM Holdings profits trimmed as manganese alloy prices fall

Between lower profits and (more) executive departures, Fortescue (ASX:FMG) did all it could to send the ASX materials sector into the red today, but a crop of high performing gold miners and major iron ore stocks saved the day, leading to a 0.22% gain.

You can get the nitty gritty of the latest FMG drama here, but the long and short of it is this: Metals CEO Fiona Hick handed in her resignation over the weekend, departing just six months after hopping over from a high level post at Woodside to join Andrew Forrest’s iron ore miner and green energy play.

They weren’t the only company struck by the turnover blues.

Canadian lithium stock Sayona Mining (ASX:SYA) plunged 27% to a 12 month low after MD and CEO Brett Lynch left ‘for personal reasons’ to be replaced as interim CEO by NED James Brown.

A thorough review of its operations has also been pledged. The company re-opened the North American Lithium operation in Quebec this year but subsequently raised $200 million in fresh equity and faced a big protest vote against barely passed motions to issue shares to Lynch and CFO Paul Crawford at a recent EGM.

“The Board will take this opportunity to undertake a thorough review of operations and the strategic direction of the Company to further enhance shareholder and stakeholder value,” Sayona said in a statement today.

“The Company holds a valuable position by recently entering the lithium concentrate production phase with its 75% shareholding in NAL. NAL recently delivered its first shipment of spodumene to the international lithium market.

“Sayona will focus on NAL’s production and sales ramp-up whilst simultaneously adding value via exploration and assessment of its existing portfolio, including the northern Moblan Lithium Project.”

The $900 million company is still up 203% over the past five years owing to a dramatic increase in lithium prices and the acquisition in 2021 of the mothballed NAL operations, currently Canada’s largest spodumene mine.

On the plus side, higher iron ore prices and some water treading in gold after the US Fed’s Jackson Hole meet up saw resources close Monday on a high.

Evolution Mining (ASX:EVN) rose 3.17%, with Northern Star (ASX:NST) up 2.69% and BHP (ASX:BHP) more than 1% higher.

Monstars share prices today

Imdex sees softer exploration spend

Meanwhile, drilling services provider Imdex (ASX:IMD) noted juniors in Australia and Canada were cutting exploration spending after seeing a 22% fall in NPAT to $35m, with the company down almost 16% today.

The contractor still paid out a 2.1cps dividend, in line with its 30% of NPAT target.

Normalised EBITDA lifted 17% to $122.6m as revenue rose 20% to $411.4m, though the company noted the second half had been softer.

“We continued our strong trend of earnings growth, despite softer exploration activity during 2H23. Activity was impacted as resource companies sought to combat inflationary cost pressures, demand greater productivity, and shift their exploration spend to jurisdictions with greater opportunities.

“This was most evident with juniors in Canada and Australia. Devico’s EBITDA contribution of $8.5m was also impacted in the short-term by an increased investment in the directional core drilling business to support future growth.

“Our normalised EBITDA margin was maintained at circa 30%. The slight decrease can be directly attributed to a combination of product mix due to growth of our drilling optimisation business and our increased investment in IMTvii and Digital 2.0 on the back of significant progress during the year.

“It is vital to recognise while S&P forecast a 20% contraction in exploration activity for calendar 2023, our leading technologies, global presence and limited exposure to juniors meant that we continued to outperform. As at 30 June 2023, IMDEX sensors on rent were only 8% behind pcp and as of today, they have grown 5% since 1 July 2023.”

Meanwhile, manganese refiner OM Holdings (ASX:OMH) saw its profit fall by over two thirds from US$60m in the first half of 2022 to US$19.3m due to lower prices for manganese ore, ferrosilicon and silicomanganese, with revenues down 31% to US$319.7m. OM, which owns the OM Sarawak smelting business and an indirect 13% stake in the Tshipi manganese mine in South Africa, will not pay an interim dividend.