Who made the gains? Here are May’s top 50 small cap miners and explorers
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ASX-listed small cap resources stocks with a gold focus have traditionally dominated our top 50. But this month it was lithium, rare earths and coal plays which made the biggest moves.
We’ll tell you why in a minute, but check out this delicious donut chart first:
“We are very much looking forward to getting on the ground and drilling this exciting project, and we are confident that it could quite quickly emerge as a company-maker for Liontown.”
Liontown chairman Tim Goyder said this in November 2016, a few weeks before the $17 million market cap explorer got its hands on the Kathleen Valley project.
He was probably right – Kathleen Valley is shaping up as a company maker.
In 2019, Liontown continues to find thick zones of high-grade lithium outside the current resource of 21.2Mt @ 1.4 per cent Li2O. In fact, it’s had to increase the exploration target twice in recent times.
If this 19 – 31Mt exploration target is successfully converted to resources, it would make Kathleen Valley one of the largest, highest grade spodumene projects in the Western world.
The stock is now up over 420 per cent in the past two months, and currently boasts a $168 million market cap.
There’s a lot of work to do before Liontown becomes a miner, but Goyder — who owns about 18 per cent of the company — would have to be pretty happy with how things are going so far.
The Galilee Basin is a 247,000 sq km thermal coal basin in central Queensland. It’s one of the largest untapped coal reserves on the planet.
There’s a number of advanced Galilee Basin projects in the works, but no major transport links to port makes them uneconomic to develop.
Here are the big ones:
But then two things happened.
First, the coal-friendly Federal Coalition government was re-elected; and in Queensland, there’s little doubt Labor’s anti-coal agenda had something to with it.
Soon after, the Queensland government decided to fast-track the approval process for Adani’s $2 billion Carmichael mine, which includes a new rail line from Northern Galilee Basin to the Port of Abbott Point (see above).
If approved, Adani’s investment in pit-to-port infrastructure could improve the business case for other projects in the region – including those belonging to small caps East Energy Resources (ASX:EER) and AusChina Holdings (ASX:AUH).
East Energy and AustChina were up 250 per cent and 50 per cent for the month, respectively, as investors bet that their previously stranded assets in the Galilee Basin would be given new life.
China could have as much as 97 per cent of the world’s rare earth minerals production. You know rare earths as “stuff that makes my phone work”. https://t.co/LuNrMUFQlC
— Stockhead (@StockheadAU) May 30, 2019
Similarly, it was speculation that China could ban rare earths exports to the US that saw investors flock to ASX-listed players last month.
Greenland Minerals & Energy (ASX:GGG) led the charge with its share price climbing nearly 80 per cent to around 13c, followed closely by Arafura Resources (ASX:ARU) and Alkane Resources (ASX:ALK).
Alkane managing director Nic Earner reckons this news could be the “big shot in the arm” the industry needs.
Here are the top 50 mining small caps for the month of May:
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