• MinRes thinks we’ve seen the bottom for spodumene
  • Lynas thinks the same (maybe) for rare earths, warning all but two miners globally are marginal or lossmaking
  • Every gold miner and their dog reports March production, some dogs probably more productive


Mineral Resources (ASX:MIN) has called the bottom in lithium prices after selling a 22,000t spodumene shipment on the spot market at US$1300/t 6% Li2O in March.

The lithium, iron ore and mining services stock and boss Chris Ellison have long sunk the boot into battery metals bears, delivering a bullish assessment of the lithium market in recent years.

Prices cratered from US$8000/t to a low of US$850/t in January. But MinRes says its weighted average SC6 equivalent price came in at US$1030/dmt across its Wodgina, Mt Marion and Bald Hill mines in the March quarter.

That saw all three operations remain in cash generating mode.

Mt Marion, 50% owned by China’s Ganfeng, produced 91,000t (up 9% QoQ), shipping 76,000t of 4.2% Li2O con at a price of US$718/dmt (US$1048/dmt SC6) against year to date costs of $518/dmt.

Bald Hill produced 30,000t in the first quarter after MinRes’ acquisition, shipping 26,000t of 5.1% Li2O concentrate at a price of US$878/dmt (US$1016/t SC6).

Meanwhile, Wodgina produced 98,000t (down 15% QoQ) and shipped 129,000t (down 10% QoQ), with 68,000t (5.6% Li2O) sold at a realised price of US$974/dmt (US$1028/t SC6) against costs of $930/t YTD.

6800t of toll treated lithium battery chemicals were produced from Wodgina concentrate in the quarter, with sales up 7% to 7000t at a realised price of US$11,098/t after Chinese taxes.

“We believe we’ve seen the bottom in the lithium prices,” Investors relations head James Bruce said. “We’ve seen the restocking phase post the Chinese New Year.

“The market has stabilised and there was strong demand for spodumene.”


Goodbye to midstream

MinRes MD and founder Chris Ellison let loose on the logic of downstream processing in the miner’s half-year results.

Bruce confirmed in answers to questions from analysts that a previously touted mid-stream lithium sulphate product suggested as an alternative to building a lithium refinery in WA did not look attractive either.

“We’ve done a lot of work on that and in our view, we can’t make the numbers work from an economic point of view and we’re going to sell our volumes into the spot market,” Bruce said.

“So I don’t think you should see us putting capital into that sort of enterprise.”

Bruce said MinRes sold more volumes into the spot market than most other lithium producers, who tend to lean towards medium and long term sales contracts, giving the company insight into where spodumene prices are heading.

MinRes’ iron ore shipments fell 6% QoQ to 4.5Mt, with prices of US$98/t a 79% realisation of the Platts 62% IODEX. A vessel breakdown saw 520,000t of lost shipments from its Pilbara production hub.

Costs have come in at $107/wmt YTD in the Yilgarn hub and $73/wmt in the Pilbara against FY24 guidance of $97-107/wmt and $67-77/wmt respectively.

But MIN claims its lower opex 35Mtpa Onslow Iron project is on target for first ore on ship in June, despite concerns over the timing of the completion of a haul road from its Ken’s Bore minesite to the port in Ashburton.

A process to sell a non-controlling stake in the haul road, intended to help deleverage the miner’s balance sheet and replenish cash spent on the development Onslow Iron, is expected to complete in the current half.

Meanwhile, MinRes says FID is due this quarter on its Perth Basin gas wells, but it remains subject to approval from the WA Government to export some of its production to underpin the development.


Mineral Resources (ASX:MIN) share price today



Almost no-one is making money in rare earths right now: Lynas

Lynas Rare Earths CEO (ASX:LYC) Amanda Lacaze said just one other rare earths producer globally is cash positive, in a sign prices should rise despite a ramp up in Chinese production quotas over the past year.

Real estate weakness in China has hurt demand for magnet metals in the past two years, with poor sales of home appliances like refrigerators and aircons keeping the market suppressed.

But the requirement for rare earths in EV motors and renewables continues to grow, with Lynas seeing an increase in market prices in April.

The largest producer outside China, Lynas produced 3545t of rare earth oxides and 1724t of NdPr in the March quarter, up from 1566t and 901t respectively in a maintenance hit December quarter.

But it saw sales receipts lift only fractionally from $107.1m to $107.7m as low NdPr prices averaging US$47/kg  in China kept a lid on profits.

Lynas has stashed 500t of NdPr in its inventory as well as all of its lower value material produced in the quarter, stockpiling material until it realises higher prices, with CEO Amanda Lacaze saying prices were well into the cost curve.

“We have a fairly confident view that there are only two firms which can be sustainably producing NdPr profitably at this sort of price and that’s Northern Rare Earths, which we would say has a slightly lower cost base than ours and some of that’s driven simply by volume, and Lynas and everybody else is either marginal or lossmaking at these prices,” Lacaze said.

Meanwhile, Lynas will eat another $70m cost blowout for its still to be commissioned Kalgoorlie cracking and leaching plant, with the initial $500m development now costing $800m.

China issued a surprise third production quota for rare earths last year, which Lacaze and COO Pol Le Roux said led to oversupply in the dominant Chinese market despite growing demand from EVs and wind turbine developers.

Lynas reduced its sales from 3916t in the December quarter to 2310t in the March quarter, with gross sales revenue falling from $136.2m to $101.2m, but its decision to withhold lower value material from sales saw average selling prices lift from $34.8/kg to $43.8/kg.


Lynas Rare Earths (ASX:LYC) share price today



Quick hits: A parade of goldies pump out their March numbers

Gold prices are stabilising after two days of massive falls, sliding below US$2300/oz in US trade yesterday.

But a reversal in sentiment has been good for ASX gold equities today, who in either a canny act of collusion intended to hide failures or frustrating absence of communication have all decided to drop their March quarter reports.

Let’s start with Regis Resources (ASX:RRL), which was up 2.38% as of 2.30pm AEST and seems to have shaken off the disappointment from a major explosion in capex estimates on its McPhillamy’s project in NSW.

Regis generated 90,600oz at an all in sustaining cost of $2735/oz, including $234/oz in non-cash inventory adjustments.

67,500oz at $2638/oz came from its wholly owned Duketon operations near Laverton and 23,200oz at $2887/oz from its 30% share of the Tropicana mine.

It was Regis’ first quarter without the overhang of out-of-the-money hedges, generating $108m in operating cash flow to underpin a $31m lift in cash and bullion holdings.

RRL has maintained FY24 production and cost guidance of 415,000-455,000oz at $1995-2315/oz.

“Whilst the March quarter was forecast to be softer due to planned maintenance activities and scheduling of ore, the protracted rain events in the Goldfields region further softened our quarterly production and pushed up costs,” RRL MD Jim Beyer said.

“Despite these events, our team remains focused on safely delivering profitable ounces. In-line with the current schedule our mining areas are primed with good access to ore, our planned maintenance activities are now complete and we are confident in our ability to deliver on our FY24 production and AISC guidance which will see us continue to grow our cash balance especially in light of our now hedge free gold sales.”

Disappointing with its output was Alkane Resources (ASX:ALK), which delivered 10,861oz at all in sustaining costs of $2454/oz, generating just $5.9m in operating cash flow.

That means production and costs at the Tomingley mine — regularly an industry out-performer — will come in at the low and high end of guidance respectively for FY24, which has been set at 60-65,000oz and $1750-2100/oz.

The culprit was low recoveries in ore from the Caloma Two zone at Tomingley, with MD Nic Earner saying the opening up of the new Roswell zone will lead to higher grades and recoveries.

Australia’s top two African gold stocks were also on the card. Perseus Mining (ASX:PRU) sold 127,471oz at all in site costs of US$1091/oz at its Edikan, Sissingue and Yaoure mines.

PRU has US$702m in the bank, and says it remains on track to produce 226,000-254,000oz at US$1189-1340/oz in the June half-year.

It also moved to over 90% ownership of OreCorp, enabling Jeff Quartermaine’s gold miner to begin compulsory acquisition of holdouts in its $270m cash bid.

West African Resources (ASX:WAF) saw gold sales fall from 66,059oz in the December quarter to 49,509oz in the March quarter despite a lift in gold poured from 53,696oz to 60,319oz.

WAF pulled in an average price of US$2078/oz, but saw costs lift 21.6% to US$1291/oz thanks to the 25% loss in gold sales at the Sanbrado mine in Burkina Faso. But WAF has maintained gold production guidance for 2024 of 190,000-210,000oz at under US$1300/oz, with the Kiaka development — intended to bring its production to 400,000ozpa — still on schedule and budget.

In nearby Cote d’Ivoire, shareholders are finally wavering on the long arduous takeover attempt launched by Chinese shareholder Zhaojin for Tietto Minerals (ASX:TIE).

Zhaojin recently upped its offer from 58c to 68c a share, and now says it has freed defeating conditions to the upgraded bid for the Abujar mine owner. It now holds 16.24% of Tietto thanks to acceptances, up from a pre-bid stake of 7.02%. Watch this space.

St Barbara (ASX:SBM), Westgold (ASX:WGX), Red 5 (ASX:RED) and Silver Lake Resources (ASX:SLR) were also on the bill.

Betrothed Red 5 and SLR produced 50,132oz at $1926/oz and 64,967oz at $1522/oz respectively, in positive production updates. The scheme meeting for the $2.2b merger has been set for May 31.

Westgold shares fell after a weak quarter of 52,100oz at $2492/oz which has already seen it cut guidance — caused by poor weather and the closure of the underperforming Paddy’s Flat mine. Focus will now shift to its $2b merger with TSX-listed Karora Resources.

St Barbs rose almost 4% after lifting production at the Simberi mine in PNG by 33% to 17,257oz, though costs of $3074/oz showed the mine remained marginal.

All in sustaining cost guidance has been lifted beyond its previous upper end of $3050 to $3200-3400/oz, with recent and anticipated improvements unable to counteract a poor first half.

Outside the world of gold diggers, Chalice Mining (ASX:CHN) shares fell over 10% after a big cut in resources at its Gonneville nickel-copper-PGE deposit near Perth to plan for a smaller higher grade development ahead of a 2025 PFS after a furious market reaction to the bulk open pit envisaged in a controversial 2023 scoping study.

The materials sector was largely unchanged today.


Today’s Best Miners 🚀

Tietto Minerals (ASX:TIE) (gold) +6.6%

Silver Lake Resources (ASX:SLR) (gold) +3.8%

Regis Resources (ASX:RRL) (gold) +3.8%

Liontown Resources (ASX:LTR) (lithium) +3.2%


Today’s Worst Miners 😭

Chalice Mining (ASX:CHN) (nickel/PGE) -10.1%

Adriatic Metals (ASX:ADT) (silver) -5%

Aeris Resources (ASX:AIS) (copper) -3.6%

Azure Minerals (ASX:AZS) (lithium) -3.3%


Monstars share prices today



ASX 300 Metals and Mining Index today