The June 2020 quarter will go down in corporate folklore as the three months when COVID-19 caused havoc across the globe. But there was an unexpected silver lining at the junior end of the Australian resources sector, with a portfolio of explorers and small-cap producers defying the pandemic to deliver massive results for shareholders.
In fact, this portfolio of Cannings Purple’s clients, each with a market capitalisation under $100 million, did so well that a $150,000 investment spread evenly across the stocks at 1 April would have delivered the astute investor a $281,865 return by 30 June.
It equates to an 87.9% gain on the initial investment, an outperformance that would leave Darryl Kerrigan lost for words other than “tell him he’s dreaming”.
Leading the pack has been Zenith Minerals (ASX: ZNC), which experienced a 250% increase in its share price over the June quarter as investors warmed to its Queensland exploration strategy.
Exploration success was not the only guarantor driving share price success. Operational improvements to offset commodity price weakness, balance sheet strengthening through well-timed capital raisings and well-priced corporate transactions completed the cocktail of success.
Not all stocks in the portfolio delivered gains, which was unavoidable in these unprecedented times. But those companies with a negative return spent the quarter advancing their projects and communicating clearly to investors, establishing a platform for future strong performance and returns.
So which stocks made up this Cannings Purple portfolio of outperformance? In alphabetical order:
Aeris Resources (ASX: AIS) shares gained 6.5% to 3.3¢ by June 30 (yesterday’s close: 3.4¢). The quarter’s highlight was the acquisition of the Cracow gold mine in Queensland (the deal settled on 1 July), which completed Aeris’ long-term strategy to diversify into gold. The Tritton copper mine in NSW, meanwhile, has exceeded its full-year targets.
Alice Queen (ASX: AQX) shot up 112.5% to 3.4¢ (yesterday’s close: 2.9c). The gold-copper porphyry explorer has begun drilling at the Yaridury and Boda East projects in the Northern Molong Volcanic Belt in NSW.
Artemis Resources (ASX: ARV) closed the quarter up 176% to 5.8c (yesterday’s close: 6.5c). The Pilbara gold and copper explorer is aggressively advancing its flagship projects, the Greater Carlow gold project in the West Pilbara and the Paterson Central prospect in the East Pilbara.
Australian Potash (ASX: APC) eased 17.9% to 5.5c (yesterday’s close: 6.5c) despite strong progress toward its 2022 first-production target for the Lake Wells sulphate of potash project in WA. The WA EPA has accepted the Environmental Review Document for final assessment while the FY21 exploration program at Lake Wells gold project with joint venture partner St Barbara (ASX: SBM) for a 30,000m regional scale drilling program has been approved. A big September quarter looms.
Core Lithium (ASX: CXO) rallied 150% to 4.5c (yesterday’s close: 4.6c), ignoring the tough macro conditions for the lithium market. The company has grown its Finniss lithium ore reserves, near Darwin, by 159% to 5.7Mt to now support a seven-year life of mine with average annual output of 75,800t of lithium concentrate.
Focus Minerals (ASX: FML) is up 41.2% to 24c (yesterday’s close: 2.3c). The company has kept busy adding ounces to its flagship Laverton Gold Project in WA, with outstanding results at Beasley Creek South further underpinning the feasibility of the Stage 1 production ambitions. At the same time work progressed to deliver shareholder value from the Coolgardie Gold Project.
Great Southern Mining (ASX: GSN) rocketed more than 205% to 14c (yesterday’s close: 14c). Investors rewarded the explorer’s efforts including at the Cox’s Find gold project in WA, where drilling is underway. The company identified multiple occurrences of physical gold within quartz veining in its maiden diamond drill cores.
Magmatic Resources (ASX: MAG) was up 0.75% to 27c (yesterday’s close: 30c). The company started drilling at its 100%-owned Lady Ilse and Boda North gold-copper porphyry targets in NSW, commencing a 14-hole RC drilling program at Lady Ilse that will be immediately followed by a four-hole RC program at Boda North.
Northern Minerals (ASX: NTU), which was caught up in the Kimberley regional travel bans that forced the temporary halt of operations at its Browns Range heavy rare earths pilot plant, eased 28% to 1.8c per share (yesterday’s close: 2c). The company resumed partial operations and exploration activities at Browns Range on 1 July to set the scene for an improved September quarter.
Pacifico Minerals (ASX: PMY) increased 125% to 0.9c (yesterday’s close: 1.1c). Strong newsflow detailing significant advances at its flagship Sorby Hills lead-silver-zinc project in the Kimberley included an increased mineral resource and expanded project area.
St George Mining (ASX: SGQ) improved 43.8% to 11.5c (yesterday’s close: 12c). The company has begun round-the-clock drilling at its 100% owned, high-grade Mt Alexander nickel-copper sulphide project in WA’s Goldfields, alongside preparing a maiden resource for a low cap-ex, high-return starter mine development.
Triangle Energy (ASX: TEG) jumped 32% to 3.3c (yesterday’s close: 35c) as its efforts offsetting a weak oil price with some prudent cost cutting and streamlining, which paid handsome dividends. The Perth Basin oil producer has also brought forward a planned work program at its flagship Cliff Head project.
VRX Silica (ASX: VRX) was up 46.8% to 9.1c (yesterday’s close: 10c) as it progresses the Muchea Silica Sand project toward production. This under-the-radar project is fast shaping the newest entrant to WA’s proud exporting sector. Milestones during the quarter included VRX entering into a Native Title Mining Project Agreement, which paves the way for the granting of mining and miscellaneous leases for Muchea.
White Rock Minerals (ASX: WRM) rose 150% to 1c (yesterday’s close: 1.1c). Buoyed by investor interest in gold stocks, White Rock raised an eye-popping $7.35 million for its Last Chance gold prospect in central Alaska, in the neighbourhood of Northern Star Resources’ Pogo mine. Notwithstanding COVID-19 restrictions, work is getting underway at Last Chance.
Zenith Minerals (ASX: ZNC) soared 275% to 11c (yesterday’s close: 12c). Investors warmed to the Perth explorer’s focus on advancing its projects in Queensland and rewarded strong results from the Red Mountain and Flanagans gold ventures and the Develin Creek base metals asset.
Communicating your story to all stakeholders, including shareholders and prospective investors, is key. To discuss your strategic communications needs, contact Cannings Purple’s Director of Investor Relations Peter Klinger.