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Brought to you by BULLS N’ BEARS
Andrew Todd
Bull’s back on the menu, boys… and girls.
After a brief period of playing dead and toppy tech talk, the ASX has strung together two straight weeks of gains, led by the big boy miners, banks and a buffet of solid Wall Street earnings.
BHP’s copper arm has overtaken iron ore as its top earner for the first time, generating 51 per cent of earnings and helping deliver a stronger US$5.6 billion (A$7.9 billion) half-year profit.
Goldies are killing the pig, with South African giant Goldfields reportedly eyeing off Western Australia’s consolidating gold sector from atop its mountain of $2.5 billion cash at bank.
The US economy flexed unexpectedly, with January jobs blowing past forecasts, prompting the White House to crow about “defeating Biden’s inflation crisis” while the Fed’s minutes hinted at a longer pause on rate cuts.
The US economic dream is still holding up better than expected, pegging last year’s closing growth numbers at a zippy 3.7 per cent.
Factories are producing more, and recent data suggest businesses and consumers are still active. Hot inflation readings have pushed the Federal Reserve to shelve rate-cut talk, with policymakers signalling they need firmer evidence that price pressures are easing before lowering borrowing costs.
Perhaps the only dampener on markets this week is the never-ending ego battle between the US and Iran, which looks like it might finally spill over.
Trump is mulling strikes as the Islamic Republic of Iran flexes its military muscles alongside Russia in the Strait of Hormuz,
The channel that controls 20-25 per cent of the world’s oil and gas trade is looking increasingly like it could be closed for business, and not surprisingly, oil has jumped 2 per cent to close the week, as analysts warn of a spike in crude prices to $100 a barrel if war breaks out.
Our Runners roundup this week was awash with gold and a little lithium as the pack of juniors flashed their fancy new projects and fresh discovery stories at the RIU explorers conference down at Fremantle in Western Australia.
In a flourishing late finish, our Bulls N’ Bears Runner of the Week has pulled a Steven Bradbury to take out gold with a last-minute project acquisition.
RECHARGE METALS LTD (ASX: REC)
Up 123% (2.2c – 4.9c)
Finishing with a surge and living up to its namesake, the Bulls N’ Bears Runner of the Week is Recharge Metals, which inked a deal to snap up the Sunset Well gold project smack in the middle of Western Australia’s thriving Leonora district.
The broader tenement package covers 181 square kilometres and is located 10km east of Leonora township and within 100km of seven operating gold processing facilities, with good road access.
The prime WA real estate encompasses the flagship Prospero deposit, which already packs a shallow resource of 2.87 million tonnes at one gram per tonne (g/t) gold for a handy 94,500 ounces.
Despite its address, Recharge says no one’s poked a hole in the project since the 1990s. The gold at Prospero remains wide open along strike and down plunge, with the Prospero Shear Zone stretching a lazy 10 kilometres along strike, littered with old drill hits that have easily become walk-up targets at today’s gold price.
The company says only a handful of holes have dipped below 100m across the tenure, leaving plenty of promise for expansion and follow-up drilling.
Near-surface results include 36m at 2.73 g/t gold from 32m (including 16m at 5.39 g/t from 36m), while only a limited number of holes have tested below 100m vertical depth, indicating potential for extensions.
Recharge has secured $3.75 million through an accompanying placement and plans a $2 million pro rata rights issue to fund all foreseeable drilling at the new project.
The acquisition has easily recharged the company’s batteries in a location surrounded by some of the industry’s heaviest weights.
COSMOS EXPLORATION LTD (ASX: C1X)
Up 105% (8.1c – 16.5c)
Snagging second place on the week is South American lithium hopeful Cosmos Exploration, which has hit the major league through its private company EAU Lithium, partnering up with state-owned Yacimientos de Litio Bolivianos (YLB) to develop industrial lithium production facilities for the country.
The proposed development pathway hinges on major lithium producer Vulcan Energy’s VULSORB direct lithium extraction technology, over which EAU holds exclusive rights for use in South America.
The DLE technology, already tested on brines from several Bolivian salt flats, has the potential to unlock some of the world’s largest lithium resources in Bolivia. An estimated 23 million metric tonnes of lithium lies locked away within the country’s Uyuni, Coipasa, Empexa and Pastos Grandes salt flats, accounting for roughly 22 per cent of known global supply.
The government is obviously very keen to develop these assets as lithium prices bounce back into relevance, presenting a huge new opportunity for the Bolivian economy.
Cosmos has locked in an option to fully acquire EAU into the company’s broader portfolio of lithium projects back in December and this week, its shares more than doubled.
With lithium prices also doubling in recent months, dipping its toes into the Lithium Triangle and being parked right in the thick of South America’s brine bonanza is paying early dividends for Cosmos.
KING RIVER RESOURCES LTD (ASX: KRR)
Up 56% (2.3c – 3.6c)
Rounding out our runners is the locked-on gold junior King River Resources, which is dusting off its newest Mindoolah gold project 70 kilometres northwest of Cue in Western Australia’s Murchison belt – a region that’s spat out over 35 million ounces.
Historic mining at Mindoolah dates back to the early 1900’s and delivered an eye-watering average grade of 19.02 grams per tonne (g/t) gold for more than 5700 ounces.
Back then, miners were stymied by water and depth, pulling up stumps around 20 metres. They barely scratched what today’s rigs and algorithms are built to chase.
The ground spans about 100 square kilometres of prospective greenstone, much of it under shallow cover and largely ignored.
Management reckons the real source of the old high-grade reefs has never been subjected to modern geophysics, ultra-sensitive soils, or systematic drilling, meaning there’s plenty left in the tank.
There’s no shortage of walk-up targets either, with gold in rock chips and quartz veins marching along strike from the old Mindoolah pits.
Drilling in the 1980s at Excelsior clipped 4m at 9.3g/t from 33m and 4m at 8.85g/t from 32m, lurking beneath historic workings. The lodes didn’t stop where the old-timers did.
The new addition rounds out King River’s gold hand across Mt Remarkable in the Kimberley and its Tennant Creek ground in the Northern Territory, where gold and copper exploration rolls on.
Mindoolah has the feel of an age-old revival play; with modern tools and a ridiculous gold price, the dust will fly off this precious gem.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
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