Resources Top 5: Iron ore players rip higher on strong Chinese demand
Here’s your top ASX small cap resources winners in morning trade Friday, October 30.
Yesterday, Fortescue (ASX:FMG) boss Elizabeth Gaines said that demand from the Chinese steel sector – which is driving iron ore’s stunning price performance — had smashed all expectations.
Today, a bunch of small cap iron ore plays are basking in the glow.
‘Green’ hydrogen could be exported from Iron Road’s (ASX:IRD) $250 million Cape Hardy Stage I multi-user, multi-commodity port facility in South Australia.
The iron ore explorer is joint developer of Cape Hardy Stage I project with Macquarie and Eyre Peninsula Co-operative Bulk Handling (EPCBH).
It needs the port in order to get the long-life Central Eyre Iron Project (CEIP) up and running.
Now the South Aussie government recognises the ideal location of Cape Hardy for potential “small-scale and large-scale green hydrogen export ranging from 60,000 – 250,000 tonnes per annum”, Iron Road says.
Hydrogen is forecast to contribute as much as $1.7 billion and 2,800 jobs to the national economy by 2030.
Iron Road surged 45 per cent in early trade Friday.
Yesterday, red hot iron ore project developer Magnetite Mines (ASX:MGT) announced that an unfavourable ‘farm-in’ with Braemar Mining Developments would not proceed.
The farm-in proposal announced in April would’ve allowed BMD to earn up to 70 per cent of the Razorback iron ore project if it sole-funded a pre-feasibility study.
But things have changed. The stock is now up ~550 per cent since the start of April.
“In the last four months the company’s market capitalisation increased substantially and, as announced on 2 October 2020, the company closed a rights issue raising $5.95m, a substantial portion of which is allocated to accelerating pre-feasibility study (PFS) work on the project,” Magnetite says.
Harley Grosser’s small cap-focused Capital H Management has picked up a ~5 per cent stake in explorer Gullewa (ASX:GUL).
Gullewa is a low-profile company which holds property investments and shares in other gold explorers, like TSX-listed Central Iron Ore (which has a JV with Red 5 (ASX:RED).
It also has a 1 per cent royalty on a WA gold mine called Deflector, owned by Silver Lake Resources (ASX:SLR).
The minnow received a handy ~$2.4m in royalty payments from Deflector production for FY20, up from ~$1.67m the prior year.
Gullewa – which is up ~290 per cent over the past 12 months – jumped in February after Silver Lake announced some spectacular drilling results which could boost resources and mine life.
Diversified explorer Shree Minerals (ASX:SHH) is aiming to reopen the Nelson Bay River iron ore project in Tasmania in 2021.
The stock is up ~20 per cent in early trade.
Iron ore-gold explorer CZR Resources (ASX:CZR) – formerly Corizon – recently initiated a prefeasibility study on its advanced Robe Mesa iron ore project in the Pilbara “in response to the increased demand and pricing for direct-shipping iron-ore”.
The Robe Mesa PFS is expected to be completed before the end of this year and will deliver “CAPEX, OPEX, a potential mining reserve and provide a pathway, timeline and indicative costing to move the project forward”, the CZR says.