Resources Top 5: Fertiliser stocks catch a bid as prices hit record highs
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Here are the biggest small cap resources winners in early trade, Monday April 11.
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A basket of fertiliser prices measured by CRU’s fertiliser index recently climbed to a record high, eclipsing the previous record set in 2008 by 8%.
A Barry FitzGerald favourite, project developer AMN is well placed to benefit from sky high prices.
AMN’s large Mackay sulphate of potash (SOP) project in WA is expected to be shovel-ready by mid-2022.
“Mackay’s cash costs have been put at $US159/t, making it one of the lowest cost, if not the lowest cost, SOP projects out there,” Barry says.
“Agrimin recently noted that SOP prices in Europe had climbed to $US860/t.”
Last week AMN inked a binding offtake agreement for the supply of 50,000tpa of SOP from Mackay’ potash for sale and distribution in the US.
It has now committed its minimum target of 70% of planned SOP production under long-term binding offtakes to support the $640m in project funding, it says.
The $160m market cap stock is up 62% year-to-date. It has ~$12m in the bank “to advance Mackay to a final investment decision in 2022”.
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An aspiring fertiliser-battery materials producer.
The small cap stock has bounced around a bit but is currently up 175% since refocusing on its advanced 550Mt ‘Wonarah’ phosphate project in the NT in November last year.
Wonarah, currently one the largest and highest-grade phosphate projects in Australia, has been in the portfolio since 2007.
It reached advanced feasibility study level in 2013 before the company acquired a more advanced, production-ready project in Senegal.
It was dusted off and propelled to the front of its portfolio after prices began soaring late last year.
A new scoping study (the first proper look at the economics of building a project) is now investigating the development of Wonarah to produce fertiliser and critical end products for LFP (lithium iron phosphate) batteries.
AEV has about ~$4m in the bank.
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Another one of Barry FitzGerald’s ‘fertiliser stocks to keep an eye on’.
“Its Chaketma phosphate rock project in Tunisia is as big as they come,” Barry says.
“Now that it has resumed control of the project after winning an ownership dispute, a re-rating is in store as the fresh momentum around the company and project deliver strong newsflow.”
PHO made gains early March when it delivered a 50% increase in its KEL mineral resource – one of two at Chaketma — in a major step towards the start of feasibility studies.
The project now has a total resource of 148.5Mt at 20.6% P2O5. Work is now underway to deliver an upgrade at the neighbouring GK deposit.
Already PHO is talking up the potential of a 30-year mine life at an initial production rate of 1.5Mtpa.
The $35m market cap stock is up 94% year-to-date. It had $3.1m in the bank at the end of December.
The gold explorer has picked up some “compelling” ground prospective for rare earths in the goldfields region of WA.
OZZ calls the greenfields (unexplored) project at ‘Vickers Well’ “low risk, low-cost entry into rare earths”.
While it has never been explored for anything other than gold and base metals back in the 80s, there is promise here.
A regional biochemical vegetation sampling survey completed by the CSIRO back in 2007-2008 – aka taking samples from Mulga trees — returned strong rare earths (REE) anomalism.
The samples received from Vickers Well show elevated REE’s well above the regional averages generated from the total CSIRO data – often by factors of 5-10 times.
That’s significant, OZZ says.
“Vickers Well is a grassroots-generated project that demonstrates that OZZ is prepared to diversify from gold when a compelling project can be secured,” managing director Jonathan Lea says.
“The potential at Vickers Well is based on significantly elevated REE in bio-geochemical vegetation sampling completed by the CSIRO.
The tenements cover a cluster of REE values that are significantly higher than regional average values.
OZZ will collate and review existing data with a view to commencing active exploration as soon as the tenure is granted.”
The $4m market cap stock is down 11% year-to-date. It had $2.5m in the bank at the end of December.
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Coal prices are also going mental, and this small South African producer is poised to benefit.
IKW aimed to ramp up its ‘Emoyeni’ wash plant throughput to 90,000t a month in the March quarter. Wash plants improve product value.
Coal production would also be increased to 100,000 tonnes a month through production from both ‘Kliprand’ and ‘Goedehoep’ pits.
The $56m market cap stock is up 105% year-to-date. It had $4.5m in the bank at the end of December.