Monsters of Rock: Lithium and uranium stocks produce a healthy glow as commodity prices skyrocket
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With the iron ore price continuing to circle the US$130/t mark it was the other commodities that did the heavy lifting for the materials sector today.
Rare earths miner Lynas (ASX:LYC) was also up on no news, gaining around 5%. The company has more than doubled its value in the past year as it swung from a $19 million loss to a $157 million profit on rising prices for critical minerals.
But it was lithium and uranium, the two hottest metals on the market at the moment, that led the gains.
Pilbara Minerals (ASX:PLS) was the champion large cap stock with its shares climbing more than 7%, adding to its near 600% jump over the past 12 months.
Lithium chemical prices are rising in the double figures in percentage terms on a weekly basis at the moment. Pilbara only sells spodumene at the moment, but raw lithium materials are also getting a bump from the market, and the company’s next auction on its Battery Material Exchange platform will be eagerly watched by lithium bulls.
Its last sale in July garnered US$1250/t, around 25% above spot and three times what PLS was paid for its product around 12 months ago.
That said, it was another lithium stock that stormed out of the blocks today.
Tim Goyder-chaired Liontown Resources won’t be producing the battery metal until 2024, but the lithium explorer is still one of the most in demand stocks on the ASX right now.
It had seemingly no news to report but the owner of the Kathleen Valley lithium deposit rose an incredible 20%, shattering its all time record to close at $1.36 with a market cap of around $2.6 billion.
Liontown’s Kathleen Valley is one of the world’s highest grade lithium deposits of substance, with 156Mt of lithium at a grade of 1.4%. The company is convinced enough in its merits and long-term value it agreed to pay more than $30 million last month to buy Ramelius Resources out of a production royalty over the project.
Liontown, which is spinning out some of its non-lithium assets in the Julimar region near Chalice Mining’s Gonneville nickel-copper-PGE discovery in the Minerals 260 IPO, entered the ASX 300 in S&P’s latest quarterly rebalance.
That has been driven by manic buying of physical uranium from the Sprott Physical Uranium Trust, which has reportedly taken just weeks to buy up the equivalent of France’s entire annual uranium supply.
Paladin, with its Langer-Heinrich mine in Namibia, is one of the largest potential uranium producers with a near-term production asset should prices continue to appreciate at current rates (they are now above six year highs).
It shut Langer-Heinrich a few years ago as heavy debts pushed the firm into administration, but the miner has recapitalised and has the advantage of being a restart story rather than trying to get a major yellowcake mine together from scratch.
Meanwhile, there have been signs of life for Rio Tinto’s uranium miner ERA, which owns the mothballed Ranger mine in the Northern Territory, until recently one of just three in operation in Australia.
It has the Ranger 3 Deeps project, an underground extension of the Ranger mine, on standby should prices reach the right level.
That would appear to remain some way off, but investors were still excited by the commodity’s price movements of late, sending ERA shares soaring by 27.3%.