These 10 small cap miners and explorers outgunned everyone in 2019
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A number of sub-$400m market cap miners and explorers enjoyed monster gains this year.
We’ve got 44 multi-bagger stocks on our resources list in 2019 (a return of 100 per cent or above); in 2018 there was just 11.
But unlike the very balanced winners list from 2018, our top 10 movers for 2019 (so far) are a sign of the times — gold, copper-gold porphyries, and more gold.
>>Scroll to the end for our Top 50 resources performers of 2019 (so far)
Market Cap: ~$100m
As the New Year dawned – full of possibilities — Spectrum was just a sub-$5m market cap, ‘bottom-of-the-drawer’ spec stock.
The former rare earths play almost purchased a Californian gold mine in late 2018 – but then the thing burnt down just before management signed on the dotted line. Lucky break.
It was providential for another reason, when Spectrum decided to acquire the historic high-grade Penny West gold mine in WA’s Youanmi region instead.
In February, Spectrum immediately struck ‘bonanza’ grade gold about 150m north of the historic high-grade open pit.
By the end of March, it had a $26.3m market cap, and investors were beginning to take notice.
Fellow explorers pegged or bought ground in the Younami, looking to replicate Spectrum’s wild success.
It also prompted a tsunami of historic gold mine acquisitions, Australia-wide.
Spectrum recently unveiled a maiden resource of 799,000 tonnes grading 13.8 grams per tonne (g/t)(that’s very high grade) for 355,500oz. Another resource update is slated for the first half of 2020.
Things were going very well — until Spectrum got caught up in a messy legal battle with neighbouring Younami explorer Venus Metals, which has helped trim some of those crazy share price gains.
Market Cap: ~$68m
Like Spectrum, Andromeda’s unexpected success had a ripple effect.
If you’d asked us “what’s a kaolin?” a few years ago we (along with most punters, presumably) would’ve guessed ‘expensive fabric’, ‘niche martial art’, or ‘indigenous string instrument’.
Now, there’s a growing number of small caps dabbling in this special aluminous clay, used to create high purity alumina (HPA) which is in demand because it helps stop lithium-ion batteries from catching fire.
But Andromeda doesn’t care about complex and costly HPA production just yet.
The explorer is investigating a simple business model – starting with shipping raw ore from its flagship Poochera project in South Australia to kaolin-hungry offtakers in Asia.
It doesn’t hurt that Poochera ore includes halloysite; a rare, much sought after derivative of kaolin.
The main markets for halloysite are the ceramics and also the petroleum industry, but there are emerging uses in things like nanotube technologies and cancer therapeutics.
The market really liked the Andromeda story. A year ago, Andromeda had a share price of about 0.5c for a market cap of ~$5m. Now, heading into 2020, it is trading at about 4.8c for a market cap of almost $70m.
Market Cap: ~$28m
In early September, ~$5m market cap Magmatic Resources was finalising an uninspiring WA gold project acquisition and, simultaneously, the demerger of its flagship East Lachlan copper-gold porphyry assets in NSW.
Porphyry deposits are low grade but very, very large which allows for bulk mining methods and economies of scale.
The Bingham Canyon mine in Utah, for example, produces 300,000 tonnes of copper, 400,000oz of gold, 4 million ounces of silver and 30 million pounds of molybdenum every year.
Magmatic floated on its East Lachlan projects in 2017, but just couldn’t get the market excited about their massive potential.
Without funding, these projects were destined to go nowhere.
Then NSW neighbour Alkane Resources (ASX:ALK) hit the big one at Boda – a monstrous +500m intersection grading 0.48 grams per tonne (g/t) gold and 0.2 per cent copper.
Now — following a $2.2m cap raise and the appointment of experienced mining exec David Flanagan and porphyry expert Peter Duerden to the leadership team — $24.5m market cap Magmatic has dumped the WA acquisition and officially refocused on copper-gold in the East Lachlan.
Market Cap: ~$75m
Another advanced porphyry play, this time in Chile (strangely enough).
In February, the sub $15m explorer announced that it was acquiring a major copper-gold discovery called Cortadera, about 14km from its advanced Productora project.
Up to that point, drill results from the Cortadera discovery had never been publicly released.
Hot Chili called it a “game changer”, and so far, they’ve been right.
Minus the dips and peaks, the Hot Chili share price has been on a steady march northward since February in the back of some crazy drilling intersections.
In early December, Cortadera delivered what the explorer calls “One of the Best Global Drill Results of 2019” — 972m grading 0.5 per cent copper & 0.2g/t gold from surface.
That’s a ~12-minute walk end-to-end.
“In little over nine months we have transformed the growth trajectory for our company and outlined what could become the world’s next Tier-1 copper-gold discovery,” managing director Christian Easterday says.
Market Cap: ~$200m
Our third and final top 10 porphyry play for 2019 is Stavely Minerals, which had been dialling in on the motherload at Thursday’s Gossan in NSW for much of the year.
Getting closer and closer to the target porphyry where the motherload was theoretically located.
In late September it happened — a monstrous shallow, very high-grade intersection of 32m at 5.88 per cent copper, 1g/t gold, and 58g/t silver. Incredible.
The market’s verdict? Stavely immediately leapt ~330 per cent to $1 per share, peaking at ~$1.42 per share in mid-October before subsiding.
Thursday’s Gossan is definitely a project to watch in 2020.
Market Cap: ~$190m
No one likes coal anymore apparently — and yet here we are. Despite the bad PR, about 1 billion tonnes of coking (high quality) coal is used for steel production worldwide every year and there’s no replacement. Want steel? Need coking coal.
In late February, private miner Hancock Prospecting launched a sensational takeover offer for Riversdale Resources, which valued the unlisted Canadian coal explorer around $740m.
This offer had an immediate effect on explorer Atrum, which has a high quality coking coal project called Elan right next door.
The Atrum share price soared 138 per cent for the month, and – after raising $20m, getting some big investors on the register, and launching a successful 20,000m drilling program — has maintained that momentum ever since.
Market Cap: ~$18m
We first profiled battered $4.7m market cap explorer Celamin as a stock due for re-rate in early February.
Celamin was in the investor doghouse due to a multi-year dispute with its partner in Tunisia over a tidy looking phosphate project.
But this year it got the final win. No appeals. This dodgy partner will now be forced to pay ~$US4.4m or hand over 100 per cent of the project.
“We look forward to getting back on the ground,” Celamin managing director Simon Eley said.
Market Cap: ~$77m
In February, Tietto told Stockhead it was aiming to double the 700,000oz Abujar project resource in Cote D’Ivoire, West Africa, in an April resource update.
It exceeded that goal, significantly. Abujar was soon 1.7 million ounces and growing fast.
Since then, +20,000m of additional diamond drilling has been completed using the company’s three (now four) wholly owned rigs.
This drilling blitz fed into an updated 2.2-million-ounce resource estimate for the AG deposit in November.
A subsequent ~$17m cap raise will fund a fresh 50km diamond drilling campaign, which will hopefully add high-grade ounces to the resource “as rapidly as possible” in 2020.
Market Cap: ~$100m
Former iron ore play Magnetic made its initial foray into the gold sector in early 2016, acquiring three early stage projects in the well-endowed 34-million-ounce Leonora-Laverton district of WA.
Since then, this quiet achiever is up 920 per cent.
But as you can see below things really didn’t start to take off until January this year … and now Magnetic has a +$100m market cap. Why?
Because this explorer – which is only chasing giant +1-million-ounce discoveries — reckons it is onto something big at the Hawks Nest 9 (HN9) target.
Right now, HN9 is a 3km-long, 200m wide gold mineralised zone “open to the northwest, south-southwest and at depth”.
All gold intersections are within 50m of the surface and drilling is ongoing. Stay tuned.
Market Cap: ~$390m
The production metrics around Capricorn’s flagship Karlawinda project haven’t changed much since a feasibility study was released in 2017-18.
The company began 2019 gearing up for project development, but things soon devolved into a complete s@*tshow.
A new managing director was appointed, before resigning a month later. Three non-exec directors were also removed via shareholder vote in the same period.
“Exactly what went wrong in the company’s boardroom has never been fully explained, but it’s reasonable to assume that a lot fell into the category called ‘personality clash’,” Treadgold writes.
A sad-looking share price told the story. The company managed to fend off a couple of takeover attempts, before ex-Regis boss, a certified companymaker, Mark Clark came in to right the ship.
Which he has done, very successfully.
Capricorn now has development costs sorted, covered by equity raisings completed in July (~$15m) and August (~$65m), and a $100m debt financing package via Macquarie Bank in December.
Now — hopefully — full scale construction of the 105,000oz-120,000oz per year operation will finally kick off next year.
Here are the top 50 mining small caps for 2019:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop
|Code||Name||Total 12 Month Return %||Dec 17, 2018||Dec 17, 2019 [intraday]||Market Cap|
|SEI||SPECIALITY METALS INTERNATIONAL||260||0.015||0.054||52.08M|
|BCB||BOWEN COKING COAL||179||0.019||0.057||42.60M|
|GSN||GREAT SOUTHERN MINING||150||0.028||0.069||23.32M|
|EGA||EGAN STREET RESOURCES||144||0.205||0.500||69.82M|
|ABR||AMERICAN PACIFIC BORATES||128||0.145||0.330||72.68M|
|BC8||BLACK CAT SYNDICATE||110||0.150||0.315||26.52M|
|AYM||AUSTRALIA UNITED MINING||100||0.002||0.004||7.37M|
|TGM||THETA GOLD MINES||94||0.080||0.155||67.69M|