Resources Top 5: Aussie potash, phosphate stocks could be big winners in global fertiliser war
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Here are the biggest small cap resources winners in early trade, Friday October 29.
In China – a major producer — some provincial governments have requested fertiliser producers and traders to stop exports, causing a phosphate price spike to $643.8/mt for di-ammonium phosphate (DAP) and $147.5/mt for phosphate rock in September.
Yesterday, CXM raised $4m to advance the flagship $78m, 800,000tpa Ardmore rock phosphate project in Queensland. The placement was done at 9c per share, a 14% discount to the last closing price. This didn’t deter investors, which pushed the share price past 10c in early trade Friday.
“With this additional capital, we are now in a position to recruit key management and necessary technical staff required to progress the project, with it being one of the highest-grade undeveloped rock phosphate projects in Australia at a time of buoyant prices for phosphate globally,” managing director Robert Mencel says.
In August, an updated definitive feasibility study for Ardmore envisaged gross revenue of $1.453 bn and free cash of $429m over a 10-year life.
Last week, CXM re-rated after signing an offtake and marketing agreement with Samsung C&T, one of the world largest fertiliser traders.
(Up on no news)
Potash prices have also soared by up to 300% since the start of the year, sitting above US$700 per tonne (CFR Brazil Spot).
Gold focused explorer AEV has a phosphate project in the recesses of its portfolio. This project, called ‘Wonarah’, is probably the reason the share price has jumped 140% over the past month.
In response to a recent speeding ticket from the ASX, AEV pointed to “increased positive sentiment with regards to the phosphate industry including a twofold increase in the Moroccan phosphate price in the last 12 months.
It also flagged “increased activity in public announcements in phosphate technology in batteries in the last week, and increased activity and sentiment in offtake deals with other listed phosphate companies in the last week”.
AEV has signed a deal with a company called Polyhedrous, which wants to farm into the Wonarah project in the NT.
“Due diligence by Polyhederous has only just started and is expected to be completed in 2 months,” the $15.5m market cap stock says.
“At this stage there is no guarantee that a farm in or other agreement will occur at any time in the future following from the due diligence, however AEV will update the market as and when required.”
A bunch of iron ore juniors jumped onto the next cool thing when prices tanked, but Freehill has so far stayed the course.
Its focus is the ‘Yerbas Buenas’ magnetite project in Chile, where low capex/opex phase 1 trial mining of 5,000t per month of 53%-63% iron fines will kick off soon.
Anticipated revenues from Phase 1 mining operations will help strengthen the company’s financial position, FHS says.
“After committing considerable resources to the project, it was pleasing to witness significant progress made to the point where phase one mining operations are now underway as equipment mobilises to site,” chief executive Paul Davies said yesterday.
“We have deployed experienced mining contractors MTN Gold SpA to deliver their turnkey solution.”
“With considerable demand for the Yerbas Buenas ore, we will continue to assess the number of different sales channels available to us.”
The $45m market cap stock is down 3% over the past month, and 51% year-to-date.
(Up on no news)
In September, ACB raised $14.7m at 6.5c per share, giving it sufficient cash funds to move forward on both its ‘Wilconi’ nickel-cobalt and ‘Letlhakane’ uranium projects.
Th company is current updating the resource at Wilconi in WA after completing an 11,000m drilling program last quarter. As part of on-going PFS work baseline flora/fauna and groundwater studies kicked off.
With uranium prices now on the move ACB has dusted of Letlhakane in Botswana – one of the world’s largest undeveloped uranium deposits, it says — where a work program will be commenced in Q1 2022.
This +$150m market cap battery metals-uranium explorer is now up 333% year-to-date, and 550% over the past year.
Previously focused on gold and iron ore, the small explorer has now shunted its long-held lithium assets back to flagship position.
A couple of years after mothballing its US brines projects due to poor sentiment and lack of suitable processing methods, ‘Alkali Lake North’ and ‘Clayton Valley’ have now been hauled out from the dusty recesses of RLC’s project portfolio.
The company recently expanded the Alkali Lake North project area and geophysical survey on the new ground was commenced during the September quarter.
RLC had $1.18m in the bank at the end of September. The $19m market cap stock is up 3% over the past month and 210% year-to-date.