As the third quarter of calendar 2022 wound to a close on Friday, one thing has been made perfectly clear across the board – everyone is scrambling for a slice of the lithium pie in these uncertain times.
The ongoing war in Ukraine has continued geopolitical tensions and high gas prices, the sudden death and prolonged memorial of Queen Elizabeth II brought the global community to a standstill and the RBA board continued to increase Australia’s cash rate – now sitting at 2.35 per cent ahead of a further expected hike on Tuesday.
The constant, however, was the reinstated importance of clean, green energy and the Net Zero transition for the world. Critical battery metal prices shone as demand continued to rise despite supply crunch.
The Investor Insight Picks, a basket of stocks across the resources, technology and property sectors, clocked a modest increase of 3.88 per cent for the three months to September 30.
In comparison to the S&P-ASX 200 and the S&P-ASX All Ordinaries indices, which finished the September quarter down 1.43 per cent and 1.01 per cent respectively, the Investor Insight Picks outperformed the broader market.
Although lithium was the star in the market for this quarter, overall volatility continued across the board. The Investor Insight Picks also followed the trend, with the top performing stock up 147 per cent and the weakest performer down 35 per cent.
In all, if $100,000 had been invested evenly across the Investor Insight Picks, the September quarter would have delivered not just a full return of the investment – unlike a punt on the S&P-ASX 200 index – but a modest $3,880 windfall.
The Investor Insight Picks has a strong lithium representation – as well as several other stocks exposed to battery materials like nickel, cobalt, copper, manganese, rare earths and high-purity alumina – that delivered significant newsflow during the quarter.
Just this week, Core Lithium (ASX: CXO) announced a $100 million institutional placement to fast-track expansion work at its Finniss project, near Darwin in the Northern Territory.
Finniss is on track to become Australia’s next lithium-producing operation and the Core team led by new CEO Gareth Manderson is already turning its attention to project life and scope extensions.
St George Mining (ASX: SGO) has spent the past the past year extending the scope of its high-impact exploration portfolio to four projects in minerals-rich regions of Western Australia. But what pleased investors most was that St George discovered outcropping pegmatites dykes at its nickel-rich Mt Alexander project in the Goldfields. St George intends to drill these lithium targets this quarter.
And rounding out the lithium news was market speculation that Australia’s largest producer of the battery ingredient – Mineral Resources (ASX: MIN) – was considering a spin-off of its lithium division. MinRes produces spodumene concentrate from the Mt Marion (Goldfields) and Wodgina (Pilbara) hard-rock mines and lithium hydroxide from a toll-treating operation in China.
Footnote: Cannings Purple’s Investor Insight Picks basket of stocks is updated regularly. At the moment, member stocks are Artemis Resources (ASX: ARV), BMG Resources (ASX: BMG), ChemX Materials (ASX: CMX), Core Lithium (ASX: CXO), Dreadnought Resources (ASX: DRE), FBR (ASX: FBR), Finbar (ASX: FRI), Gold Road Resources (ASX: GOR), Jupiter Mines (ASX: JMS), Lykos Metals (ASX: LYK), Mineral Resources (ASX: MIN), Northern Star Resources (ASX: NST), Northern Minerals (ASX: NTU), NRW Holdings (ASX: NWH), Rox Resources (ASX: RXL), St George Mining (ASX: SGQ) and VRX Silica (ASX: VRX).
