Pic: Bloomberg Creative / Bloomberg Creative Photos via Getty Images
Resources Top 5: Investors eye ‘value’ stocks as gold, hydrogen, lithium, and uranium bull markets loom
Mining
share
- Citigold has been trying to get mammoth 14moz Charter Towers gold project developed for decades
- Sleepy $40m Chinese explorer Energy Metals has uranium projects in the Northern Territory and WA
- Hexagon Energy Materials announced intention to buy NT hydrogen play Ebony Energy in December
Here’s your top ASX small cap resources winners in morning trade Tuesday, January 12.
Citigold has been trying to get the mammoth high grade Charter Towers gold project in Queensland up and running for decades, to no avail.
In December 2011, the minnow had 330,000oz of gold in reserve (high confidence) and 10 million ounces in resource (lower confidence).
In January 2020, it has 620,000oz in reserve (at a lower ore grade) and 14 million ounces in resource.
Which is massive, but not much has changed from a development perspective.
The consensus is that uranium is due to boom, and punters are looking for exposure in any nook and cranny.
Maybe investors have just figured out sleepy $40m Chinese explorer Energy Metals has uranium projects in the Northern Territory and WA.
Its main game is the Bigrlyi uranium-vanadium project, where a prefeasibility study (PFS) was completed in 2011 before the uranium price hit the skids.
Work was suspended in 2012 and not much has been done since.
The stock is tightly held, with only ~200m shares on issue. Most of this (66 per cent) is held by a subsidiary of the state-owned China Nuclear Power Group (CGN), one of the largest nuclear power providers in the world.
CGN has five more power plants under construction and an additional two planned.
HEXAGON ENERGY MATERIALS (ASX:HXG)
The 2020s will be ‘the decade of hydrogen’, Wood Mackenzie says.
Hydrogen is an environmentally friendly, cost effective energy source that has applications in transport, electricity, industry and heating sectors as well as chemical uses.
A number of small cap stocks have recently acquired projects which give them exposure to the popular hydrogen thematic.
One of these is Hexagon Energy Materials, which announced its intention to buy NT hydrogen play Ebony Energy in December.
Ebony Energy’s flagship Pedirka project will use a surface gasification plant to produce ‘blue’ hydrogen from coal for export and domestic markets with zero carbon emissions.
An informal ban on Australian coal since April — which followed Canberra’s call for an investigation into the origins of COVID-19 — has been a key factor behind China’s coal shortages.
China is also paying a lot more for overseas coal in futile efforts to replace the Australian stuff.
Investors looking to capitalise on the higher prices paid by Chinese coal buyers for North American coking coal can do so through the ASX.
There are five ASX-listed coal producers that have operations in Canada. One of them is Montem, which is planning to restart production at the Tent Mountain coking coal mine in 2022.
WA explorer Essential Metals has a $20m market cap and fingers in a bunch of interesting pies.
It has pencilled in an early stage scoping study at the Dome North lithium project for late in the March quarter “to coincide with further exploration progress and the anticipated continued improvement in the lithium market”.
As well some wholly owned gold, nickel and caesium projects, Essential also holds free-carried minority interests of between 25 per cent and 30 per cent in three gold projects.
Here, “reputable partners” like Novo Resources Corp, Sumitomo Corporation, Northern Star Resources (ASX:NST) and Black Cat Syndicate (ASX:BC8) cover all exploration costs up until a decision to mine.
