Monsters of Rock: These small scale producers shined on a day when monsters made the headlines
The near $30 billion bid from 6Mozpa gold monster Newmont for Aussie gold giant Newcrest (ASX:NCM) will steal all the headlines.
But some small-scale producers are enjoying a little fresh air today after posting improved numbers in the March quarter.
It has been hard in recent times for minor miners, whose businesses have been hamstrung by labour shortages, inflation, operational issues, Covid and more.
Is there light at the end of the tunnel for smaller scale producers?
Chief among those names today is Element 25 (ASX:E25), which rose more than 9% after announcing a 22% lift in production at its Butcherbird manganese mine in WA’s north to 62,200t, along with a 218% rise in sales to 62,400t including inventory destocking.
E25 was cashflow positive and has run its processing plant well ahead of nameplate capacity in the March quarter, churning out a 24 hour record of 1859t against nameplate of 1000t.
A feasibility study on converting its production to high purity manganese sulphate for lithium ion batteries is also ongoing, with the company having signed definitive agreements in January to supply global carmaker Stellantis with product for its EV batteries.
The miner says it is also seeing increasing numbers of applicants for vacant positions, indicating an easing of shortages in WA’s mining and construction labour market.
Also in the good books today was Calidus Resources (ASX:CAI), up 6.5% after announcing a 35% increase quarter on quarter in gold sold from its Warrawoona project in the Pilbara.
It’s been a tough slog, but the new gold miner says it is on track to meet second half guidance of 31,000-36,000oz at AISC of $2000-2250/oz for the second half of the financial year after selling 15,982oz at $2093/oz in the March quarter.
Those sales generated an AISC margin of $416/oz at an average realised price of $2509/oz. Calidus also cleared 11,335oz of hedges, an important step given gold prices are trading well above those levels today.
“These results demonstrate that the initiatives to improve production has successfully resulted in strong cash flow from Warrawoona in the March Quarter,” MD Dave Reeves said.
“As further initiatives are realised, we expect increased gold production in the June Quarter as final de-bottlenecking works are completed on the processing plant to allow sustained operations at above name plate capacity.”
Buoyed by Newmont’s bid for Newcrest the materials sector lifted some 2.24% today, with battery metals also running hot.
All four of the big lithium miners were among the strongest performers along with Lynas Rare Earths (ASX:LYC), Fortescue Metals Group (ASX:FMG) and Evolution Mining (ASX:EVN), which posted a better than expected update on the impact of flooding at its Ernest Henry mine on 2023 production.
Lynas wasn’t the only rare earths stock running, with Arafura Rare Earths (ASX:ARU) among the most active after securing a supply deal with Siemens Gamesa, the world’s largest producer of offshore wind turbines.
Rare earths companies like Lynas and Arafura, rare sources of supply outside China were also buoyed by reports China could restrict rare earth magnet exports overseas in a tit for tat trade dispute with the US.