Pic: RubberBall Productions, Brand X Pictures/ Via Getty Images
What happened to the top ASX resources stocks of 2017?
Mining
share
- In 2017 punters couldn’t get enough of battery metals or the Pilbara conglomerate gold story
- But of 2017’s top 40, 15 have since suffered losses of 70% or more; 8 of those have lost 90% or more
- A handful have won big, including Bellevue Gold and De Grey Mining
In mining and exploration, six years is enough time to sort the pretenders from the contenders.
Trends will come, go, and sometimes come back again. Often what is left are the explorers and project development companies with a real chance of success.
What was hot in 2017?
In 2017, the embryonic battery metals boom had everyone excited.
About 50% of the top 40 small caps had exposure to battery metals such as cobalt, lithium and high purity alumina.
In hindsight it was too early — hundreds of hopefuls would bail to more palatable metals when sentiment dived a few years later – but those with good projects stuck to their guns, and in 2023, are reaping the rewards.
Gold explorers were the next best performing theme; of these, some of the biggest movers were Pilbara conglomerate gold nugget explorers.
An Australian gold rush kicked off July that year when Artemis Resources (ASX:ARV) and Canadian partner Novo Resources made a gold nugget find at their Purdy’s Reward site in the Pilbara region of WA.
The mention of “Witwatersrand-style” and “conglomerate-hosted” gold had investors salivating. (Witwatersrand refers to the Witwatersrand Basin in South Africa — a geological formation that houses the world’s biggest known gold reserves).
Unlike battery metals, the conglomerate gold story didn’t have legs.
Most of 2017’s top stocks have failed to live up to the hype
One stat shows how difficult it is for investors who fall in love with hype stocks to succeed — of 2017’s top 40 small caps, 15 have suffered losses of 70% or more.
Eight of those have lost over 90% of their value since peaking in 2017. Take conglomerate gold darling ARV for example — down 94% from 29c in late 2017 to 1.6c per share currently.
This exercise is also an interesting glimpse into how years of cap raisings and placements can dilute your holdings. A ballooning number of shares on issue may push up the market cap, but the value of your shares plummet.
Just look at Meteoric Resources (ASX:MEI). The up-and-coming cobalt/gold/rare earths explorer has increased its market cap from $18m to $191m since the end of 2017, a 960% gain.
And yet the share price is only 56% bigger, thanks to the number of shares on issue swelling from 460m to 1.5 billion over the same period.
Now for the good news. Of the 15 stocks that continued to succeed, a handful have succeeded big.
Punters who bought and held onto a couple of these winners in 2017, even after they had made their initial gains, would be laughing all the way to the bank in 2023.
Here’s the current performance of the Top 40 ASX resources stocks for 2017>>>
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop
| CODE | COMPANY | 2017 GAIN (Jan-Dec) | SHARE PRICE CHANGE DEC 2017- FEB 2023 | MARKET CAP DEC 2017 | CURRENT MARKET CAP (FEB 27 2023) |
|---|---|---|---|---|---|
| NVA | NOVA MINERALS (THEN QUANTUM RESOURCES) | 264% | 958% (174% PRE CONSOLIDATION) | $ 35,541,480.00 | $ 114,480,000.00 |
| HAS | HASTINGS TECHNOLOGY METALS | 400% | 546% (-16% PRE CONSOLIDATION) | $ 244,981,216.00 | $ 307,440,000.00 |
| DGO | DGO GOLD | 204% | 241% (ACQUIRED 2022) | $ 11,036,635.00 | $ 308,000,000.00 |
| SPX | SPECTRUM METALS | 233% | 1800% (ACQUIRED 2020) | $ 5,965,155.00 | $ 270,000,000.00 |
| AUZ | AUSTRALIAN MINES | 1000% | -51% (-75% PRE CONSOLIDATION) | $ 235,646,720.00 | $ 25,680,000.00 |
| DEG | DE GREY MINING | 359% | 664% | $ 53,974,228.00 | $ 2,000,000,000.00 |
| BGL | BELLEVUE GOLD (THEN DRAIG RESOURCES) | 809% | 400% | $ 70,610,104.00 | $ 1,130,000,000.00 |
| A4N | ALPHA HPA (THEN COLLERINA COBALT) | 1400% | 300% | $ 80,386,504.00 | $ 566,000,000.00 |
| AVZ | AVZ MINERALS | 1400% | 300% | $ 393,562,912.00 | $ 2,750,000,000.00 |
| RTR | RUMBLE RESOURCES | 216% | 283% | $ 21,130,894.00 | $ 141,270,000.00 |
| AGY | ARGOSY MINERALS | 693% | 204% | $ 205,504,208.00 | $ 976,000,000.00 |
| MAU | MAGNETIC RESOURCES NL | 286% | 204% | $ 32,586,774.00 | $ 165,170,000.00 |
| RMI | RESOURCE MINING CORP | 750% | 123% | $ 10,073,090.00 | $ 40,000,000.00 |
| ASN | ANSON RESOURCES | 204% | 120% | $ 29,031,290.00 | $ 218,740,000.00 |
| BDM | BURGUNDY DIAMOND MINES (THEN EHR RESOURCES) | 211% | 114% | $ 14,777,823.00 | $ 103,900,000.00 |
| BCN | BEACON MINERALS | 423% | 64% | $ 34,237,340.00 | $ 101,680,000.00 |
| MEI | METEORIC RESOURCES NL | 592% | 56% | $ 44,446,976.00 | $ 191,390,000.00 |
| EPM | ECLIPSE METALS | 220% | 25% | $ 18,298,786.00 | $ 40,560,000.00 |
| TGN | TUNGSTEN MINING NL | 243% | -9% | $ 52,966,704.00 | $ 78,640,000.00 |
| AAR | ASTRAL RESOURCES (THEN ANGLO AUSTRALIAN RESOURCES) | 420% | -10% | $ 21,909,726.00 | $ 47,910,000.00 |
| AXN | ALLIANCE NICKEL (THEN GME RESOURCES) | 381% | -24% | $ 60,267,528.00 | $ 65,760,000.00 |
| ASO | ASTON MINERALS (THEN EUROPEAN COBALT) | 1150% | -51% | $ 152,339,472.00 | $ 112,760,000.00 |
| NWC | NEW WORLD RESOURCES (THEN LONGFORD RESOURCES) | 233% | -54% | $ 38,110,136.00 | $ 100,730,000.00 |
| OKU | OKLO RESOURCES | 223% | -57% | $ 108,776,728.00 | $ 78,200,000.00 |
| EUR | EUROPEAN LITHIUM | 242% | -67% | $ 105,797,552.00 | $ 97,100,000.00 |
| ORM | ORION METALS | 593% | -69% | $ 37,354,452.00 | $ 16,350,000.00 |
| CCZ | CASTILLO COPPER | 277% | -71% | $ 28,406,254.00 | $ 13,640,000.00 |
| LPD | LEPIDICO | 387% | -72% | $ 143,626,048.00 | $ 80,200,000.00 |
| PEX | PEEL MINING | 253% | -73% | $ 110,301,584.00 | $ 92,920,000.00 |
| JRV | JERVOIS MINING | 1356% | -74% | $ 121,157,624.00 | $ 380,000,000.00 |
| TAR | TARUGA GOLD | 223% | -80% | $ 10,079,972.00 | $ 13,410,000.00 |
| GED | GOLDEN DEEPS | 700% | -85% | $ 7,981,704.00 | $ 10,400,000.00 |
| CLA | CELSIUS RESOURCES | 543% | -88% | $ 78,970,024.00 | $ 25,260,000.00 |
| SUH | SOUTHERN HEMISPHERE MINING | 400% | -90% | $ 11,720,421.00 | $ 7,090,000.00 |
| ODM | ODIN METALS | 336% | -90% | $ 33,292,640.00 | $ 17,230,000.00 |
| RIE | RIEDEL RESOURCES | 1022% | -91% | $ 33,519,028.00 | $ 6,720,000.00 |
| KFE | KOGI IRON | 337% | -91% | $ 49,148,836.00 | $ 12,600,000.00 |
| ARE | ARGONAUT RESOURCES NL | 357% | -93% | $ 37,442,044.00 | $ 3,600,000.00 |
| ARV | ARTEMIS RESOURCES | 625% | -94% | $ 166,339,184.00 | $ 22,600,000.00 |
| CLE | CYCLONE METALS (THEN CAPE LAMBERT RESOURCES) | 254% | -95% | $ 40,053,116.00 | $ 6,100,000.00 |
| PUA | PEAK MINERALS (THEN HILL END GOLD) | 700% | -97% | $ 24,178,186.00 | $2,600,000 |
WHO KEPT WINNING?
DE GREY MINING (ASX:DEG) +664% (post 2017)
In 2017, DEG was plugging away at its Pilbara gold project where it had amassed 1.2Moz across several targets.
However, it was the company’s involvement in the short-lived conglomerate gold craze which ensured its inclusion in top resources stocks of 2017.
Once that frenzy died down so did the DEG share price – to a low of 5c per share —until it made one of the biggest gold discoveries in recent memory, early 2020.
The rest is history. Hemi is now one of the best Australian gold finds of the 21st century and the third globally significant deposit to be discovered since 2000 after AngloGold and IGO’s Tropicana find (2005) and Gold Road’s Gruyere discovery (2013).
DEG share price chart
BELLEVUE GOLD (ASX:BGL) +400% (post 2017)
A November 2017 drill hole represents the rebirth of Bellevue Gold (ASX:BGL), now one of Australia’s most beloved gold project developers.
The now-3.1Moz and growing mine is in development, with 200,000ozpa expected in the first five years of production at all-in sustaining cost (AISC) of A$1,000-$1,100/oz – in the lowest quartile of Australian gold producers.
Maiden production is expected in Q3 this year.
BGL share price chart
THE LITHIUM STOCKS
AVZ Minerals (ASX:AVZ), Argosy Minerals (ASX:AGY) and Anson Resources (ASX:ASN) were amongst a large group of lithium stocks riding the initial wave of battery metals sentiment.
Unlike many of their peers, these companies continued working on their projects during the dark days of 2019-2020 and are now preparing to reap the rewards over the next few years.
Except for AVZ, maybe. Let’s wait and see.
AVZ, AGY and ASN share price charts
…AND THE TAKEOVER TARGETS
In 2017 lethargic rare earths stock Spectrum (ASX:SPX) jumped on the Pilbara conglomerate train for some short term success. It then died in the arse until early 2019, when it bought an old WA gold mine called Penny West for $1m.
The $5.3m capped minnow immediately hit bonanza grade gold.
The gold kept coming. In February 2020, gold miner Ramelius (ASX:RMS) launched a successful off-market takeover bid for the company worth one Ramelius share for every 10 Spectrum shares, plus 1.7c cash per Spectrum share held, valuing it at a cool $270m.
Ed Eshuys’ gold exploration and investment vehicle DGO Gold (ASX:DGO) was also hunting Pilbara gold in 2017.
In May 2018 it began investing in De Grey, and saw its share price explode in tandem with the big mine finder early 2020. It was that 14.4% stake which prompted Gold Road Resources (ASX:GOR) to table a $308m takeover offer last year, which was quickly accepted.
