A sharp-falling iron ore price and the teetering performance of embattled Chinese property giant Evergrande ensured a limp September performance for the Australian sharemarket.
But for all the red among the blue chips across the board, it was not all doom and gloom for the savvy investor. Companies involved with battery metals and rare earths are realising long-awaited price rises as the world embraces the electrification of economies while exploration spend in the resources sector remains at all-time highs.
In times of flux, it is the diversified share portfolio that fares well in a volatile market, which is why September 30 – the end of the third quarter of calendar 2021 – marks a good albeit arbitrary time to reflect on the performance of the Investor Insight 20.
An investment of $200,000 spread evenly across the Investor Insight 20 would have delivered a gain of 7.3% or $14,600 from 30 June to the end of the quarter – reflecting the outperformance of different stocks and weakness of others in relation to prevailing macro conditions. By comparison, the S&P-ASX 200 was flat for the quarter while the S&P-ASX All Ordinaries added just 1%.
In alphabetical order, here is a summary of the performance of the Investor Insight 20.
Aeris Resources (ASX: AIS; traded 16.5¢ at 30 September, down from 19.5¢ at June 30) In the 10 months since discovering the Constellation deposit at the Tritton copper mine in NSW, Aeris has drilled more than 150 holes and results continue to surprise on the upside – into a rising copper market. Meanwhile at the Cracow gold mine in Queensland, Aeris followed through on its promise to extend the mine life and resource, by two years.
Artemis Resources (ASX: ARV; traded 8.2¢ at 30 September, up from 5.2¢ at June 30) Diamond drilling program at the Carlow Castle gold-copper-cobalt project in the West Pilbara kicked off in May and returned high-grade results that are being used to design the current RC drilling program. In the East Pilbara at the Paterson Central project – next to the giant Havieron gold-copper discovery – final approvals have been received for the next phase of drilling.
BMG Resources (ASX: BMG; traded 7.5¢ at September 30, up from 4.9¢ at June 30) Cashed up following a $4 million capital raise, BMG completed the first eight RC holes of an 18-hole campaign at the flagship Abercromby gold project near Wiluna. A diamond rig is scheduled to arrive on site shortly to complete diamond tails. Assays are pending.
Buru Energy (ASX: BRU; traded 15.5¢ at September 30, up from 15¢ at June 30) A high-impact exploration campaign in the onshore Canning Basin is underway, with drilling and analysis continuing across the Currajong-1 and Raefel-1 wells. Meanwhile, Buru continues to produce crude from the Ungani JV and selling the cargoes into the spot market under contract with BP.
Core Lithium (ASX: CXO; traded 42.5¢ at September 30, up from 24¢ at June 30) This week’s board go-ahead for the $89 million Stage 1 development for the Finniss lithium project near Darwin capped a milestone quarter for Core, which is fully funded for Finniss’ construction. Key contracts have been awarded and work will begin immediately, in line with Core’s target to be in production before the end of next year. Finniss should become Australia’s next lithium mine.
DDH1 (ASX: DDH; traded $1.24 at September 30, up from $1.17 at June 30) Australia’s premier drilling services provider is suffering an enviable problem – securing enough rigs to keep up with surging demand. Strong organic growth across the company’s three brands – DDH1 Drilling, Strike Drilling and Ranger Drilling – has promoted DDH1 to add to its rig fleet. A maiden full-year result and dividend, which exceeded market expectations, capped a strong performance by DDH1 since listing in March.
FBR Limited (ASX: FBR; traded 3.6¢ at September 30, down from 4.3¢ at June 30) Brick by brick, this Perth company is putting together a strong track record of delivery from its Hadrian X brick-laying robot. The portfolio of completed builds now also extends to commercial structures as FBR justifies its tag as a technology stock on the move.
Focus Minerals (ASX: FML; traded 24¢ at September 30, down from 26¢ at June 30) Work has stepped up to prepare the Coolgardie gold project for a resumption of mining. Approvals processes are advanced and Focus’ technical team is expanding the mineable resource base. And in parallel, a focus is being maintained on the larger Laverton gold project.
Finbar Group (ASX: FRI; traded 81¢ at September 30, down from 85¢ at June 30) Western Australia’s leading apartment development company, fresh from reporting a strong full-year profit, signed off on its $63 million Dianella apartment project on time and on budget. Earthworks are set to commence at the luxury 118 apartment complex in Applecross, and construction is ongoing at both the Civic Heart in South Perth and at AT238 east of the Perth CBD.
Gold Road Resources (ASX: GOR; traded $1.19 at September 30, down from $1.26 at June 30) Few companies could boast the exploration pedigree of Gold Road. Just 50km south of the 50%-owned Gruyere mine, which Gold Road discovered, the company is beginning to put together a string of strong exploration results across its Southern Yamarna project area. Gruyere, meanwhile, continues to ramp up to its full potential as a long-life, low-cost 350,000ozpa producer.
Hastings Technology Metals (ASX: HAS; traded 24.5¢ at 30 September up from 17¢ at June 30) Neodymium and praseodymium, commonly referred to as NdPr, are rare earth elements vital for the magnets in electric vehicles and Yangibana hosts world-class grades. Following a $100 million equity raising at the start of this year, Hastings has focused on expanding and upgrading Yangibana’s mineral resource base – achieved – and finalising talks with debt lenders including NAIF. All is pointing to a busy end to 2021 as Hastings targets to becom Australia’s next rare earths producer.
Mineral Resources (ASX: MIN; traded $44.78 at September 30, down from $53.73 at June 30) The twin commodities focus of iron ore and lithium is serving MinRes well, especially as one comes off the boil and the other gathers a head of steam. MinRes’ foundation mining services business, meanwhile, has never been busier while its efforts to become energy self-sufficient gained traction with a significant gas discovery in the Perth Basin.
Northern Minerals (ASX: NTU; traded 4.3¢ at September 30, up from 3.3¢ at June 30) Browns Range in the Kimberley is a globally significant source of the heavy rare earth dysprosium which along with NdPr is a key component in the permanent magnets required for electric engines. Northern Minerals commenced second-phase drilling at Browns Range aimed at expanding the inventory of near-surface resources, with investors eagerly awaiting the total rare earths oxide (TREO) assay results at a time when rare earths stocks are attracting a lot of capital markets attention.
NRW Holdings (ASX: NWH; traded $1.56 at September 30, up from $1.47 at June 30) A succession of well-timed business acquisitions over the past few years has set NRW up as one of Australia’s leading mining and civil services suppliers, well positioned to play a key role in the development of the second generation of lithium projects – including Core’s Finniss asset – at the same time as benefiting from COVID recovery stimulus spending.
Rox Resources (ASX: RXL; traded 37.5¢ at September 30, down from 40¢ at June 30) Modern mining and exploration techniques are being used to breathe new life into the historic Youanmi gold mine in WA’s Yilgarn region. Rox is also keeping the drill bit turning at the Link prospect, which is emerging as key target. Drilling returning high-grade intercepts from 120m down plunge of the existing resource envelope. As part of its Youanmi focus, Rox completed the spin-out of its nickel assets through Cannon Resources.
St George Mining (ASX: SGQ; traded 6.9¢ at September 30, up from 6.8¢ at June 30) Few ASX explorers can claim the high nickel-copper sulphide grades that St George has intersected at its Mt Alexander project in WA’s Goldfields. Greenfields exploration is slow but can be hugely rewarding, as St George will be demonstrating as it adds to its five discoveries across the Cathedrals Belt – at a time when nickel prices are flying on the back of the EV evolution.
Tribune Resources (ASX: TBR; traded $4.90 at September 30, up from $4.60 at June 30) and Rand Mining (ASX: RND; traded $1.50 at September 30, up from $1.45 at June 30) The partners in the East Kundana gold joint venture near Kalgoorlie welcomed a new operating partner in Evolution Mining. East Kundana remains a solid cash spinner. Tribune’s sleeper is the fast-growing Japa gold project in Ghana, which already has a 1.8 million ounce resource grading 2.7g/t.
Torrens Mining (ASX: TRN; traded 16¢ at September 30 down from 24¢ at June 30) A maiden drilling program at the Northwood Hill prospect, part of the Mt Piper gold project in Central Victoria, has been completed and intersected high-grade gold in nine out of 13 holes. Importantly, drilling identified the structural control on the gold mineralisation, evoking comparisons to the nearby Fosterville mine.
VRX Silica (ASX: VRX; traded 21.5¢ at September 30, down from 22¢ at June 30) Like battery metals, investors are keenly anticipating the tipping point of a silica sand supply squeeze. VRX’s massive, high-grade deposits at Arrowsmith North, Arrowsmith Central and Muchea north of Perth offer a low cost ultra-long-life opportunity that could supply high-grade silica sand to a global market for more than 100 years. Approvals processes and development planning are well advanced.
Zenith Minerals (ASX: ZNC; traded 20¢ at September 30 down from 25.5¢ at June 30) A $6 million capital raising in July funded drilling at copper targets at Develin Creek (Queensland) and gold targets at Split Rocks in WA. At the exciting Earaheedy zinc JV in WA, an expanded drilling program continues to focus on the boundary limits of the major Chinook deposit.