The resources market posted a major turnaround in November as the dour mood that fell over commodities through the second half of the year from China’s Covid crisis and US Fed’s interest rate rises gave way to optimism.
Virtually every major commodity posted massive price rises, led by a more than 30% run for iron ore as speculation China would end its economy curdling Covid Zero policy grew alongside a growing and unusual protest movement against Xi Jinping’s Communist Party.
Check out our in-depth analysis of all the major commodity price movements over the past month below.
The ASX 200 Resources index is up more than 14% over the past month, a tranquil mood which trickled down to the riskier junior end of the mining and exploration scene.
Seven companies rose by 100% or more across a range of commodities, three alone exploring for rare earths. That is the largest number since the 13 that hit that milestone in August and more than double the number (3) that hit the tonne over the past two months.
21 of the 50 biggest ASX resources gainers for November were primarily in gold, with just eight primarily focused on lithium, though the leading mover was a phosphate stock.
Niobium is now entering the lexicon of the mining investor. The lightly traded critical metal is mainly used to make steel better, but also has growing uses in lithium-ion batteries, intelligent glass, solar panels, 5G tech, and nuclear energy.
Just two Brazilian and Canadian companies have a virtual duopoly on the niobium market and ferroniobium metal (65% Nb) currently sells for ~US$45,000/t.
But incredibly, three companies still outperformed WA1 across the month.
The leading gainer at 158% was $40 million phosphate small cap Avenira (ASX:AEV), a favourite of Stockhead expert panellist Niv Dagan.
It owns the Wonarah phosphate project in the NT and is wants to capture the growing market for lithium-iron-phosphate batteries by shipping DSO phosphate suited for conversion into battery grade phosphoric acid.
LFP cathode batteries have a lower energy density than traditional nickel-cobalt-manganese cathodes, but LFP cars are cheaper.
“TESLA already using (LFP) in half its fleet, LFP (is) stronger, safer and cheaper,” Dagan says.
“(It also has) applications in fertiliser which is a high-growth area.”
Avenira has a ‘tripartite non-binding MoU’ in relation to Wonarah with the NT Government and LFP cathode manufacturer Aleees to jointly develop a cathode plant in Darwin.
OD6 Metals (ASX:OD6) is the latest rare earths explorer to moon on investor ebullience around the critical minerals, crucial to the production of EVs and wind turbines.
It rerated on assays showing widespread high grade clay rare earths mineralisation at its Splinter Rock project near the coastal WA town of Esperance.
Winsome Resources (ASX:WR1) bucked the trend across the lithium sector in November, catching a rocket after announcing a “significant pegmatite intercept” late October at the Adina lithium project in Canada.
All up 160m of pegmatite was intercepted in drilling below the recently discovered, well mineralised Jamar outcrop.
A 12,000m drilling program currently underway will culminate in a maiden resource at the Adina and Cancet projects in 2023.
It also raised $6.8 million during the month at $1.67, a massive 98% premium to its prevailing share price thanks to a quirk of some flow-through shares from a Canadian exploration incentive program.
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