In breaking news, the Nasdaq Composite Index in the US – measuring the share price performances of stocks like Apple, Microsoft, Amazon and Tesla – shed 13% of its value in April, its worst monthly performance since the global financial crisis in 2008.
The broader US stocks benchmark, the S&P 500, lost almost 9% of its value in April, its worst effort since the initial coronavirus economic shock at the start of 2020.
Many investors in ASX-listed mining stocks glossed over the US indices’ performance as our focus this past week centred on the release of companies’ March quarter activities reports.
Their inattention would have been aided by the fact our own sharemarket benchmark, the S&P-ASX200, closed down less than 1% in April, despite similar macro concerns around inflation and slowing economic growth.
Central bank interest rates in the Western world will rise, probably faster than anticipated, though economists are keeping a nervous eye on China to see how the regime in Beijing handles its latest phase of the pandemic.
One of the themes to emerge – unsurprisingly – across the mining sector during the March quarter reporting season was inflationary pressure as evidenced in rising labour, energy and supply chain costs.
The headwinds facing the mining companies meant many made mention of this during their quarterly commentaries.
But for all the appropriate focus on macro factors, it is interesting to look at the pure output deliver and progress made to build the next generation of mines.
This is not to ignore the priority focus to return value for shareholders – rather than chasing volume growth for the sake of it – but to reflect on the scale of what is happening.
For the mining and exploration stocks in the Investor Insight 20 basket of companies, the summary performance during the March quarter looked like this:
Gold
- Northern Star Resources (ASX: NST) sold 380,075 ounces for quarterly sales revenue of $937 million from its three world-class production centres of Kalgoorie and Yandal in WA and Pogo in Alaska.
- Gold Road Resources (ASX: GOR) sold 35,080 ounces from its half-share of the Tier 1 Gruyere gold mine in WA’s northern Goldfields for revenue of $85.4 million. It also launched an agreed $308 million scrip takeover of DGO Gold, a listed investor that owns a cornerstone stake in emerging producer De Grey Mining.
- Tribune Resources (ASX: TBR) said its share of quarterly gold production from the Evolution Mining-led East Kundana JV in WA’s Goldfields was 7,056oz, which have a market value today of almost $19 million.
- Similarly, Rand Mining (ASX: RND) said its share of quarterly gold production from East Kundana was 2,352oz, with a market value of almost $6.3 million.
- Rox Resources (ASX: RXL) is taking great strides towards making the Youanmi project – in WA’s Murchison – bigger and better, increasing the mineral resource 93% to 3.2Moz at 3.6g/t and finalising studies into a mining operation.
- BMG Resources (ASX: BMG) had a highly productive quarter with significant intercepts of high-grade gold at the Abercromby project near Wiluna, including a hit of 1m over 100g/t.
- Focus Minerals (ASX: FML) is working towards a resumption of production at its Coolgardie project, with scope of works for the Three Mile Hill mill refurbishment finalised and pit designs being optimised.
Battery Minerals
- Mineral Resources (ASX: MIN) shipped 94,000t of spodumene concentrate from its half-owned Mt Marion lithium mine in WA’s Goldfields for sales revenue of $US183.5 million, based on a realised price of $US1952/t. The start-up of Wodgina, in the Pilbara and Australia’s second-largest spodumene mine, is on track for this quarter.
- Core Lithium (ASX: CXO), which joined the S&P-ASX 300 index during the quarter, reached a landmark binding term sheet with Tesla to supply spodumene concentrate from its Finniss project near Darwin, which remains on track to start producing by the end of this year.
- Hastings Technology Metals (ASX: HAS) secured a $140 million NAIF loan and a $40m equity investment from L1 Capital as part of funding for its world-scale Yangibana rare earths project in WA’s Gascoyne region, which has a post-tax net present value of $1 billion.
- Northern Minerals (ASX: NTU) confirmed a strategy to develop a commercial-scale beneficiation plant at its Browns Range heavy rare earths project in WA’s Kimberley, where a pilot plant has already delivered success.
- Artemis Resources (ASX: ARV) completed an 8000m RC and diamond drill program across its Greater Carlow and Paterson Central copper-gold projects in WA’s Pilbara.
- St George Mining (ASX: SGQ) maintained its aggressive exploration push at the high-grade Mt Alexander nickel-copper sulphide project in WA’s Goldfields and struck massive sulphides with the first two extensional drill holes at the Stricklands deposit.
- ChemX Materials (ASX: CMX), which only listed in January on a promise to produce critical materials required for electrification and decarbonisation, made significant progress with its HiPurATM high purity alumina project and kicked off a first-drill campaign at its Eyre Peninsula manganese and kaolin tenements.
- Lykos Metals (ASX: LYK) spent the March quarter preparing for upcoming drilling and trenching programs across the company’s three priority projects, in Bosnia-Herzegovina, where the Cajnice copper and Sinjakovo copper-gold projects are showing particular promise.
Steel making
- Mineral Resources (ASX: MIN) shipped 4.7 million tonnes of iron ore from its Yilgarn and Pilbara operations in WA, generating sales revenue of $US476 million, based on a realised price of $US101.31/t.
- Jupiter Mines (ASX: JMS) reported that the Tshipi manganese mine in South Africa, in which the Perth company has a 49.9% beneficial interest, sold 752,518t of the metal in its most recent quarter (to 28 February 2022) to generate EBITDA of $43.8 million.
Clean Energy
- Vimy Resources (ASX: VMY), the developer of the Mulga Rock uranium project in WA’s Goldfields, agreed a $658 million merger with Deep Yellow via a scheme of arrangement that will result in Vimy’s shareholders owning 47% of the enlarged Deep Yellow.
- VRX Silica (ASX: VRX), which is developing high-quality silica sand projects in WA that can supply the solar glass panel industry, finally has approvals certainly for its North Arrowsmith project and in the meantime also carried out a major drill program at Boyatup.
A quarter’s performance is always judged on the previous quarter’s numbers, which is why reporting is a game demanding constant improvement with little allowance for slippages.
But sometimes it is worth standing back from the trees and taking a look at the forest.
