Monsters of Rock: Strong commodity prices movement a tailwind for today’s reporting stocks

Fenix, AIC Mines, Genesis Minerals, Alumina, Mt Gibson and Bellevue among miners to report results today
Bellevue edges to commercial production, a prompt for GDX inclusion
Mt Gibson and Fenix Resources bank the cash for junior iron ore sector

Bellevue Gold (ASX:BGL), Alumina (ASX:AWC), AIC Mines (ASX:A1M), Fenix Resources (ASX:FEX), Genesis Minerals (ASX:GMD) and Mt Gibson Iron (ASX:MGX) were all among the reporters who followed in BHP’s (ASX:BHP) slipstream to dump their March data on a feel-good ASX materials market.

Basking in the glow of some strong commodity price movements yesterday, the ASX 200’s diggers, drillers and refiners were up 0.99% today.

That’s great news for any company dropping numbers, with an iron ore price run on Wednesday leaving investors in the big iron ore players in good spirits.

Gold, coal and lithium stocks were all up as well, leaving a fertile trading environment for any quarterly reports not disappointing investors with a results curveball.

The closest to that was Genesis Minerals (ASX:GMD), which produced 30,473oz at an all in sustaining cost of $2497/oz, but said it remains on track to hit FY24 guidance of 130,000-140,000oz at $2300-2400/oz having delivered 99,834oz at $2236/oz so far this year.

Genesis was sitting on $180.7m of cash after generating $91.5m in revenue in the March quarter, noting that the Gwalia owner has no hedges to worry about.

GMD has made $53.5m from its operations since July 1 last year, but just $2.4m in the March quarter, with another $22.3m out the door in ‘investing activities’ including exploration and evaluation.

The story for Raleigh Finlayson’s $2b producer will be about its future growth prospects though, having outlined a five year plan to grow production to at least 325,000ozpa by 2029 in early March.

Also reporting from the gold sphere today was Bellevue, which reported normalised free cash flow of $20m (excluding pre-production payments for activities undertaken in the December half) for the March quarter on 37,338oz of gold production.

BGL expects to produce 75,000-85,000oz this half year, saying its grades are improving. It processed 5.8g/t stopes in the month of March with development head grades rising to 9.2g/t, well above reserve grade levels.

The Darren Stralow led gold producer thinks it will hit commercial production in June. BGL was up 3% today, while Genesis slid 1.6%.

RBC’s Alex Barkley said Bellevue’s cash on hand of $22m was well below market expectations, but that the miner’s operating trends were positive.

“Total cash and bullion of A$40m was below RBCe/Cons at A$62m/A$47m. However, after normalising from one-off payments BGL generated ~A$20m of FCF in the quarter,” he said in a note.

“The strong ramp through MarQ, with a better JunQ expected should see its cash balance rise from here, in our view. Mining tonnes continued to increase, which should in-time allow BGL to test its milling capacity. Grades also sequentially improved. The 9.2g/t development grade in March gives the prospect of high-grade stopes in JunQ.

“We see potential for grade at the site to reconcile above Reserve (6.1g/t). The lower Q3 cash is of some concern; however, we see BGL’s positive operating trend as able to overcome this. We consider this a somewhat neutral result, given mid-Q3 updates had already indicated the positive operating trend.”

BGL’s commercial production declaration will be closely watched since it will qualify for GDX index inclusion, which could see the GDX buy up to 4-5% of its stock, according to Barkley.

Genesis Minerals (ASX:GMD) and Bellevue Gold (ASX:BGL) share prices today

Alcoa eyes expansion decision next year

Alcoa, which has been at the centre of controversy regarding an expansion of mining activities in WA’s South West, says it expects to receive ministerial approval for its Myara North and Holyoake projects near Perth by the end of 2025.

That would see the high grade bauxite orebodies developed no earlier than 2027, a step critical to improving the long term outlook of its WA alumina business.

Alcoa has been busy in 2024 already, announcing plans to curtail its Kwinana alumina refinery and mop up the 40% minority stake in its AWAC JV by acquiring ASX listed Alumina (ASX:AWC).

Alcoa’s Bill Oplinger told analysts on an earnings call overnight he was “pretty bullish on aluminium” thanks to rising demand from green energy. Supply challenges for bauxite in Guinea and south east Asia have also led him to say the alumina market will be in deficit this year, though aluminium is likely to be balanced.

He also said sanctions against Russia would likely improve price realisations, with discounts applied to Russian metal having set the benchmark in recent times.

In its quarterly release Alumina said AWAC had seen alumina prices rise US$18 to US$362/t, lifting EBITDA from US$84m in the December quarter to US$139m in the March quarter despite refined tonnes slipping from 2.6Mt to 2.5Mt as higher prices made up for lower tonnes and higher costs.

However, Alumina saw net debt grow from $294.3m to $360.2m with contributions to the AWAC business outstripping operating receipts, highlighting the case for merging with its American JV partner.

Alumina (ASX:AWC) share price today

Rounding off

A couple of little guys with big ambitions were also on the bill. Mt Gibson Iron (ASX:MGX) rose 3.8% on a solid if higher cost quarter of production at its Koolan Island mine in WA’s Kimberley.

Most of these numbers were already flagged a couple weeks back, with Mt Gibson flipping 700,000 wet metric tonnes of 65% Fe hematite in the March quarter.

At 3.2Mt YTD it’s well on track to deliver to full year guidance of 3.8-4.2Mt, especially considering the wet weather WA’s remote north tends to make the March quarter a round one for iron ore exporters.

MGX has $430m in cash, and looks like it will have a bloated warchest by June 30, having made $58/t margin despite cash costs blowing out to $99/t. They have average $67/t this financial year, with guidance of $65-70/t implying a return to form in the June term.

MGX was up 3.8% today. Fellow junior iron ore miner Fenix Resources (ASX:FEX) lifted its cash pile by $25m to $88.3m after shipping a record 415,903wmt of ore largely from its high grade iron ridge mine, pulling in a $95/dmt margin with C1 costs of $77.5/wmt, shipping costs of $29/dmt (US$18.80/dmt) and realised prices of $206/dmt (US$136/dmt).

Flat was AIC Mines, which produced 3066t of copper in concentrate at an all in cost of $5.49/lb in the three months to March 31.

AIC, owner of the Eloise mine near Mt Isa in north Queensland, reckons it’s on track to exceed full year production targets of 12,500t Cu. AIC had $25.7m in the bank at March 31, down on $26.7m three months prior, but had 453t of copper in concentrate worth $6.1m awaiting shipment.

Stronger copper prices also helped, with AIC seeing those rise from $12,079/t to $13,549/t in the quarter.

AIC also sold 1412oz of gold at an average $3390/oz and 28,354oz silver at $38/oz.