Monsters of Rock: Miners cop a drubbing as 29Metals avoids Covid issues

Mining stocks got smacked today despite strong commodity prices, with the Materials index sagging by 1.15%.

There were few winners, with rare earths play Australian Strategic Materials (ASX:ASM) and lithium explorer Sayona Mining (ASX:SYA) among the better performers in the big resources stocks.

Regis Resources (ASX:RRL) was punished for a big production downgrade, slipping 14.3% after revealing a wall slip at its Duketon operations would cut 40,000oz in FY22.

Tietto Minerals (ASX:TIE) was a rare standout after hitting gold grading close to 3000g/t inside a big intercept of 25m at 131g/t in drilling at its Abujar mine in Cote d’Ivoire.

Gold and iron ore stocks were hit despite finishing with weekly gains on Friday.

ANZ’s Hayden Dimes said supply issues out of Brazil was supporting port draws and prices.

“Iron ore future extended recent gains following data showing iron ore stockpiles at Chinese ports fell by 1.7% to 154.3t last week,” he says.

“This was likely driven by supply disruptions in Brazil, where heavy rain has curtailed exports in recent weeks.

“Major resource companies BHP and Rio Tinto have also warned that labour shortages as a result of COVID-19 restrictions may impact output in the short term.”

Monsters share price today:

Copper miner 29Metals avoids Covid crunch

Copper miner 29Metals (ASX:29M) says it is yet to see an impact on its production from Covid after a series of miners revealed hits to its workforce from the virus would result in lower output this year.

The company beat copper guidance for 2021 after hitting its straps with higher grades and recoveries at its Capricorn Copper operations in Queensland and Golden Grove polymetallic mine in WA in the December Quarter.

29Metals, which listed in a $500 million float last year, produced 40,700t of copper against guidance of 38,600-40,500t, and came out at the upper end of its gold and silver guidance for 2021.

Its only miss came in the zinc department, where output of 47,800t was below its 49,000-51,700t guidance range, and beat guidance on a copper equivalent basis, producing 68,200t against guidance of 67,300t.

The company expects its full year EBITDA to meet or exceed forecasts, with the company saying it has seen no material impact from Covid despite the rising scale of the outbreak in Queensland, but was seeing cost pressures on labour at the Golden Grove mine in WA amid border restrictions.

“Production ended the year well with improved copper production at Golden Grove and another strong quarter at Capricorn Copper, including record copper metal production in December,” 29Metals CEO and MD Peter Albert said.

“Copper performance partly offset the under-performance in by-product metals for the Dec-Qtr and the full year at Golden Grove, reflecting the rescheduling of the stope mining sequence flagged in the Sep-Qtr quarterly report.

“Costs and labour market pressures persisted in the quarter, exacerbated by border closures, particularly at Golden Grove.”

29Metals has set guidance for 2022 of 39,000-46,000t of copper, 55,000-65,000t zinc, 27,000-34,000oz of gold, 1.37-1.64Moz silver and 2000-3000t lead.