Monsters of Rock: Resources stocks rock out with 2pc gain to end the week on a high

ASX Resources index up ~2% as commodity prices lift
Iron ore and gold miners have a field day while Chalice gains almost 20% on Julimar drilling approvals
Bill Beament’s Develop completes Woodlawn acquisition

The ASX 200 Resources index jumped 1.93% as of 4pm AEST today as higher commodity prices brought a sprinkling of joy to investors heading into the weekend.

In a rare two-for-one gold was up as well as a weaker US dollar along with expectations of improved commodity demand in China combined to deliver gains for both gold and industrial metals.

Iron ore prices on the Singapore exchange rose 2.76% today to US$130/t while Dalian Iron Ore futures climbed 3.87%.

On the LME overnight copper gained 2% to US$9416/t, nickel rose 7.9% to US$28,231/t, zinc was up 2.6% to US$3714.50/t and aluminium climbed 1.7% to US$2907/t.

That delivered some positive moves for miners, with Fortescue (ASX:FMG) up 3.87% to $20.15, moving back above $20 a share, BHP (ASX:BHP) 2.06% higher after Woodside shareholders approved their scrip merger with its Petroleum division and Rio Tinto (ASX:RIO) up 1.5%.

Gold miners got in on the act as the safe haven metal kept up its overnight gains through the Australian trading day to hit US$1846/oz.

Northern Star (ASX:NST) led all the major miners with a 3.79% lift, while fellow majors AngloGold Ashanti (ASX:AGG) and Newcrest Mining (ASX:NCM) were also up ~2.4%.

The mid-tier was all about Chalice Mining (ASX:CHN), which saw an outsized 19.06% gain as news circulated through the markets about its successful bid for approval to drill beneath the Julimar State Forest.

The ASX 200 listed firm has attributed its share price malaise in 2022 to evidently failed appeals against the WA Government’s permission to conduct ‘low impact drilling’ on targets beneath the trees.

IGO (ASX:IGO), meanwhile, was up 5.14% to $11.64 after announcing the first battery grade lithium hydroxide produced from the long delayed Kwinana plant with its Greenbushes JV partner China’s Tianqi Lithium.

It is the first of three approved plants expected to produce battery grade lithium in Australia, along with MinRes and Albemarle’s Kemerton and the SQM-Wesfarmers Covalent Lithium JV, which is also planning a Kwinana-based refinery using feedstock from its future Mt Holland mine near Southern Cross.

Monstars share price today:

Beament seals copper-zinc deal

On the M & A front, former NST head honcho and WA mining identity Bill Beament has sealed his deal to pick up the Woodlawn zinc and copper mine in New South Wales for just $30 million from the adminstration of Heron Resources.

His ASX-listed mining services and base metals mining play Develop Global (ASX:DVP) has paid $15 million in cash and will issue almost 5 million shares at $3.14 a pop to Heron’s creditors.

Develop will also pay Heron’s former financier Orion Mine Finance up to $70 million in cash or shares depending on milestones being met.

Until the Woodlawn mine was placed in care and maintenance in 2020 and Heron went into administration in July last year some $340 million was invested in its development.

The orebody has picked up a fresh shine as copper and zinc prices have touched fresh highs over the past year, and remain at elevated levels.

Both are considered key metals for renewable energy and the green energy transition.

Develop is aiming to look at the project through fresh eyes with preparations for an exploration decline and underground drilling program “well advanced.”

“This is an outstanding deal which has delivered Develop a world-scale project complete with an underground mine and processing infrastructure,” Beament said.

“We have used the three months since we agreed the purchase to devise a full exploration strategy with the aim of converting Inferred Resources, extending the mineralised lenses, which we know are open at depth, and drill testing the EM conductors identified by leading consultants NewExco.”