MarketTalk, a new investor event series launched by Sydney-based Investability and Perth-based Resolve IR, is bringing together four ASX-listed resource developers and producers for an afternoon of presentations on 21 March at Melbourne’s Chancery Lane Bistro.
Focused largely on traditional commodities like iron ore, coal and oil and gas, the one-day investor event is designed to bring institutional investors face-to-face with the management teams behind high-quality natural resource development and production companies.
The 10-minute presentations will be followed by a 5-minute Q&A session, lunch and drinks as CEOs and managing directors outline their upcoming plans, flagship projects and goals over the 6-12 months.
Smart money favouring traditional commodities
Given the current state of the market, Investability founder Dannika Warburton says it is the near-term producing stories and undervalued producing assets that are currently piquing investor interest.
“The market lacks liquidity so investor appetite is focused on businesses that are either generating cash or soon will be,” she says.
“The smart money is favouring commodities that have experienced strong and relatively stable performance like iron ore, coking coal and gold.
“There’s a lot of very high-quality development and production stories that we felt weren’t getting the market appreciation they deserved.
“The underlying commodities are strong, but there’s a disconnect with equities, which creates a perfect storm for investors – high quality investment opportunities with undemanding valuations and very appealing growth potential.”
More than 200t of coal needed to build a wind turbine
The climate transition currently under way requires massive investment across a wide range of metals and materials, which means the ability of each region to meet the challenges of adaptation won’t be evenly distributed.
The world still needs energy sources such as coal and gas, given 2MW windmills containing 260t of steel requiring 170t of coking coal and 300t of iron ore – all mined, transported and produced by hydrocarbons.
Australian coal with its high energy, low ash characteristics match the requirements for modern, high efficiency coal fired power plants being built throughout Asia, while our high-grade metallurgical coals are amongst the best in the world for modern steel making.
While huge systematic change is set to take place, as it stands today, we’d be left without a paddle if we nixed materials like coal and gas overnight.
ASX resources stocks discuss upcoming plans
This week’s MarketTalk event will showcase four developers and producers that prove there’s still immense value to be unlocked on the ASX.
Here’s a little sneak peak into the companies presenting.
Fenix Resources (ASX:FEX)
John Welborn, executive chairman
Fenix Resources is an integrated mining, logistics and port services company centred in the Midwest of WA.
The company has successfully recommissioned the Iron Ridge iron ore mine, currently producing 1.4Mtpa, and is rapidly expanding.
“We are building a diversified mining and logistics business around our infrastructure assets at the Geraldton port,” Wellborn told Stockhead.
“We’ve just announced our half year numbers, we slightly outperformed our run rate of 1.3Mtpa for Iron Ridge.
“It is a really significant 6-month period because of that production, which produced a net profit after tax of $22.1m, so we’re highly profitable,” he said.
The significance comes from the fact the iron ore company is generating revenue and profit from just one mining operation.
“We are currently working to commission a new mine of similar scale at the W11 deposit under a deal we’ve done with Sinosteel Midwest Corporation, 20km from Iron Ridge and we’ve also announced production from 10M’s Twin Peaks mine,” Wellborn continued.
“So we’re rapidly working through increasing production from one iron ore asset to four, targeting a close to 5Mtpa production in the next 12 months.”
ADX Energy (ASX:ADX)
Ian Tchacos, executive chair
ADX is a producer, developer and explorer of hydrocarbons with an asset base predominantly in Austria, Europe where its flagship Welchau-1 gas exploration well resides.
Earlier this week the well intersected 115m of condensate-rich gas shows in the primary target formation from 1,452m, paving the way for a very large potential commercial reserve only 14m from an open access pipeline.
Tchacos told Stockhead the results are in line with pre-drill expectations, confirming the exceptional geological and technical work by the company’s Vienna team supported by local and international experts.
“Looking forward we’re going to be doing some down-hole logging which will give us greater confidence in what we’ve got, understand the pressure regime, how well it might flow and then later on in a few months we’ll be going in and testing the well,” he said.
“There’s a hell of a lot going on, this well opens up a whole new area of potential large gas resources which are really valuable in Europe.”
Pursuit Minerals (ASX:PUR)
Aaron Revelle, managing director and CEO
Lithium developer Pursuit Minerals is focused on the Rio Grande Sur lithium project in the Salta province of Argentina.
The company has kicked off a highly anticipated maiden drilling campaign following the receipt of exploration environmental permits from the Salta Mining Secretary in early January.
The four-hole diamond drilling campaign across the southern tenements is designed to reach depths of 500-600m below surface, targeting a material resource upgrade in Q2 to build on the inferred resource which currently sits at 251,300t.
“We’re quite excited for the potential scale of the project with some of the initial results that have been delivered but also what we’re seeing around the salar by other competitors,” Revelle says.
“In parallel, we are also in the process of completing commissioning at our lithium carbonate Stage 1 plant which has a 250t capacity, so we’ll be looking to bring that plant online and start producing lithium before the end of this year.”
Aspire Mining (ASX:AKM)
Samuel Bowles, CEO
Aspire Mining has been working on the discovery and development of its coking coal assets in Mongolia since 2008.
The company is working through major permits and approvals required to begin mining at the flagship Ovoot project as it prepares updates to its JORC coking coal reserve estimates.
“Together, these will be presented in an independent technical report to satisfy the due diligence of debt financing to enable the construction of the project,” Bowles told Stockhead.
“The project is expected to generate a significant amount of tax royalty income for the people of Mongolia.
“At a local level, the project will result in investment of infrastructure that will be of benefit to communities, particularly the road that we are planning to build,” he said.
“This will be supportive of the existing tourism industry and the traditional, nomadic and agricultural industries that are currently in existence in the Khuvsgul province where we are looking to build this project.”
MarketTalk presenters share prices today:
At Stockhead we tell it like it is. While ADX Energy are a Stockhead client, it did not sponsor this article.
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