BHP has a long history of getting it right. It wouldn\u2019t be The Big Australian it is if it didn\u2019t.<\/p>\n
So Garimpeiro has decided he\u2019s big enough to forgive BHP\u2019s unfortunate bet on Nickel West. \u201cIt was not alone in getting it wrong,\u201d he notes, with no less than 20 private-sector forecasters who in January this year were predicting good times ahead for the battery metal. <\/p>\n
The best approach? Chin up, hop on the good foot etc, and what\u2019s this? In the commentary notes accompanying the release of BHP\u2019s $US6.6 billion December profit report during the week, a \u201cdecidedly bullish\u201d tone on copper.<\/p>\n
Not spectacular lately, but up 5% in the December half is certainly solid against the likes of lithium and nickel.<\/p>\n
The rub \u2013 BHP reckons a supply deficit largely mooted to emerge in the final third of the 2020s could actually come earlier.<\/p>\n
And, in BHP\u2019s own words, those deficits could be \u201cpronounced\u201d in the medium\u2013term. That\u2019s \u201cfive years\u201d.<\/p>\n
Time to dust off a couple of copper juniors with \u201ctonnes of leverage\u201d, just in case that \u2018Golden Era\u2019 of copper is finally upon us.<\/p>\n
29Metals (ASX:29M \u2013 27.5c, $192m MC)<\/a>: <\/strong>Trading last year at 70c a share, it is now back around the 28c mark, and trading like a junior.<\/p>\n It\u2019s lost fundie Ausbil as a substantial shareholder but gained the biggest of all, AustralianSuper and is chaired by Australia\u2019s original copper bull, Owen \u201cStronger for Longer\u2019\u2019 Hegarty.<\/p>\n Hegarty recently assured shareholders the \u201crecent dramatic fall\u201d was \u201cunwarranted and of serious concern\u201d, reminding them that 2024 was a recovery year after the group\u2019s Queensland copper operation was hit by floods in 2023.<\/p>\n 29M has one of the biggest resource\/reserve bases on the ASX. <\/p>\n Important disclosure: Hegarty is an AFL Bombers fan, and that is \u201cgood enough for Garimpeiro to hear him out\u201d.<\/p>\n Caravel Minerals (ASX:CVV \u2013 16c, $84m MC)<\/a>:<\/strong> As far as Garimpeiro\u2019s concerned, there is no ASX junior with more leverage to the potential for copper to crack $US4\/lb and then keep going.<\/p>\n The comes from Caravel\u2019s 3.03Mt namesake copper project some 150km northeast of Perth in WA\u2019s wheatbelt. It is being worked up as a 65,000tpa copper producer with molybdenum-gold-silver credits.<\/p>\n Yes, it\u2019s low-grade (0.24% copper) and has a $1.6 billion capex requirement. But its potential scale of production in a Tier 1 location means there is likely to be support in one form or another to get it in to production, just about when copper could be enjoying the sort of price strength that BHP\u2019s forecast pronounced supply deficit would deliver.<\/p>\n \u201cPlug in $US5\/lb or $US6\/lb copper for its planned 143M\/lbs of annual production potential, and the extreme leverage to higher copper prices is plain to see.\u201d Investment manager, Nero Resource Fund<\/em><\/p>\n If you absolutely can\u2019t ignore the feeling that \u201clithium\u2019s a buy\u201d, actual drum-beating resources stock picker Rusty Delroy loves an unloved mining stock.<\/p>\n Delroy\u2019s strategy with Cottesloe-based Nero Resource Fund is all about cutting against the grain, and with metals and mining juniors stuck in a rut for the past 18 months, that tells him to \u201cdeploy capital\u201d.<\/p>\n Among the most sold off parts of the market are the lithium stocks, thanks to a collapse in prices from over US$80,000\/t for chemicals to around US$14,000\/t. And 6% Li2O spodumene concentrate made at WA\u2019s hard rock mines is fetching US$850\/t, down from over US$8000\/t in late 2022.<\/p>\n Delroy likes Delta Lithium (ASX:DLI \u2013 31c, $220m MC)<\/a>, with around 40Mt of spodumene resources in WA \u2013 and the backing of MinRes.<\/p>\n \u201cI still think this is gonna be a very choppy, difficult year for lith with the physical pricing. But you do want to be hunting some things that are beaten up,\u201d he said.<\/p>\n \u201cDelta is not an A-Grade asset. It\u2019s like a C-Grade asset suite but there\u2019s strategic interest there.<\/p>\n \u201cAnd $100-odd million at bank, probably compelling at some point for MinRes to wrap it back up with some paper and take the cash back. I\u2019m sure their balance sheet could do with that.\u201d<\/p>\n Delroy also rates Canadian explorer Winsome Resources (ASX:WR1 \u2013 70c, $134m MC)<\/a> ahead of the $1.62 billion capped Patriot Battery Metals (ASX:PMT), the much-ballyhooed James Bay startup helmed by former Pilbara Minerals supremo Ken Brinsden.<\/p>\n Winsome posted an initial resource in December of 59Mt at 1.12% Li2O at its Adina deposit last year, with a further update expected in the first half of 2024.<\/p>\n \u201cThat\u2019s a quality asset that\u2019s going to continue to grow,\u201d Delroy believes.<\/p>\n \u201cIt\u2019s still got a journey, but it is a proper asset and it\u2019s far more compelling from a valuation standpoint than something like a Patriot.<\/p>\n \u201cAnd it\u2019s also, I think, got a far shorter path to market than Patriot. I think there\u2019s a more credible permitting process with Winsome.\u201d <\/span><\/p>\n The post SUNDAY ROAST: The stocks that lit a fire under our experts this week<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
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\n<\/strong><\/p>\nRusty Delroy<\/h2>\n
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\nThe views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.<\/em><\/p>\n