Mining experts have given their take on the outlook for commodities like nickel, uranium, lithium and copper for 2024 at the WA Mining Club
\nAura Energy\u2019s Andrew Grove says the nuclear sector is growing faster than previously neglected uranium stocks can supply plants
\nCanaccord Genuity\u2019s Courtney Libby says lithium could be entering counter-cyclical play territory<\/p>\n
\u201cSeller of Hope\u201d: That\u2019s how Argonaut PCF vice-chairman Liam Twigger once referred to his job trading gold mines when approached by a punter at the pub.<\/p>\n
Chairing a panel of industry experts for the WA Mining Club yesterday of industry, those most optimistic in the mining space appear to be zeroing in on uranium and copper as the metals of the day.<\/p>\n
Meanwhile, sold off commodities like lithium and nickel could provide hidden gains if they have indeed found their floor, amid negative sentiment that has sent the battery metals sector to the brink and sapped the space of capital.<\/p>\n
Among the positives for the market, Twigger says, is that Australia is now the market of choice for resources capital, with a number of Canadians looking to chase money Down Under.<\/p>\n
\u201cThe ASX has taken a global leadership position in terms of raising capital. Ten years ago it was always Canada and the Toronto Stock Exchange was the big one and we\u2019d have some follow on here,\u201d he said.<\/p>\n
\u201cBut for the last five years, we\u2019ve raised more money and you\u2019re getting Canadians coming to Australia. And now projects in South America are getting a good hearing on the ASX.\u201d<\/p>\n
Courtney Libby, an investment banking associate at Canaccord Genuity, said interest from investors was coming in fastest for uranium and copper.<\/p>\n
Uranium prices rose to post-Fukushima highs of US$107\/lb last month before dropping back to US$96\/lb over the past week, well above most incentive price levels. Meanwhile, copper has remained in a holding pattern at around US$8500\/t as investors wait for US Fed rate cuts or Chinese stimulus to give it the boost the tightly supplied sector needs.<\/p>\n
\u201cThere are no surprises that uranium, on the back of the uranium price doubling (is seeing money flow). We\u2019ve done four uranium deals so far this year, we\u2019ve just raised $30 mil for Lotus (ASX:LOT)<\/a>,\u201d Libby said.<\/p>\n \u201cCopper as well we\u2019re seeing a lot of interest in particularly because there\u2019s not a lot of options of pure play copper companies on the ASX at the moment. \u201cWe\u2019ve had Hillgrove (ASX:HGO)<\/a> start producing copper as well.\u201d<\/p>\n \u00a0<\/p>\n Meanwhile, Lunnon Metals (ASX:LM8)<\/a> MD Ed Ainscough said the nickel sector in WA was far from dead despite concerns about the fate facing BHP\u2019s (ASX:BHP)<\/a> Nickel West division after the giant miner flagged it could place the lossmaking business on care and maintenance.<\/p>\n Ainscough said quality resources at high grades could make money at prevailing prices of around US$17,500\/t, despite concerns Indonesia\u2019s growing supply line has structurally shifted prices down.<\/p>\n If BHP is to shut the Kambalda concentrator due to a lack of third party material, he suggested it should be compelled to sell it, or share the infrastructure so companies with the grade to compete in the current environment can make use of it.<\/p>\n \u201cWhat BHP does, obviously the cards are up in the air. But to remove that uncertainty, we need some guidance. We need some decisions to be made<\/a>,\u201d he said.<\/p>\n \u201cBetween ourselves and say Wyloo, we\u2019ve got about 300,000 tonnes of nickel in the ground in and around Kambalda at just under 3%. Put that in context, that\u2019s what Nova was when it was discovered at a 1% cut off, it was about 300-odd thousand nickel tonnes at 3.4%. <\/p>\n \u201cIf you found Nova today it would get built. So this isn\u2019t really much about price.<\/p>\n \u201cIt\u2019s about the quality of what\u2019s being produced and this uncertainty has created this kind of equity market capitulation. <\/p>\n \u201cIf they do shut it and they try and warehouse it. Again I said publicly, if they don\u2019t value it I would more than happily to take it off their hands for $1 and use it or lose it I guess would be my grab.\u201d<\/p>\n \u00a0<\/p>\n Aura Energy (ASX:AEE)<\/a> managing director Andrew Grove, whose company has a large permitted project at Tiris in Mauritania with prices suddenly returning to levels that could underpin new investments<\/a>, said equity markets had turned sharply for uranium stocks.<\/p>\n He said the factors that led to the surge in prices in the past 12 months, including short and long term supply shortages and an ambitious nuclear capacity build out globally led by India and China, had not gone away.<\/p>\n \u201cThey\u2019re building again the capacity we\u2019ve got now in the next 15-20 years. So there\u2019s a strong growth in nuclear power which reflects in the price of uranium,\u201d he said.<\/p>\n \u201cAnd given that we\u2019ve been sitting at sub US$30 for 10 years there\u2019s been no exploration, no new mines no invested capital into the existing operations. <\/p>\n \u201cIt\u2019s a big catch up and whether they can catch up with that growth remains to be seen.\u201d<\/p>\n Canaccord\u2019s Libby predicted there would be more M&A in uranium as the bull cycle evolved and companies looked to stake a claim in the commodity or grow their market share.<\/p>\n She also sees more corporate activity on the cards from gold miners looking to pick up resources near their mills and potentially in lithium, where prices appear to have bottomed at US$850\/t for 6% Li2O spodumene concentrate in recent weeks.<\/p>\n \u201cWe believe in the EV thematic, so that mid to longer term we still believe there will be a turnaround and it just gives a chance \u2026 for people to be counter cyclical at the moment but all the supply demand thematics, they all still stack up,\u201d she said.<\/p>\n At Stockhead, we tell it like it is. While Aura Energy was a Stockhead advertiser at the time of writing, it did not sponsor this article.<\/em><\/p>\n <\/span><\/p>\n The post Sellers of Hope: How mining experts feel about the outlook for metals in 2024<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nWe had the Metals Acquisition (ASX:MAC) <\/a>IPO, which was upsized. <\/p>\nIs nickel dead yet? Not by a long shot<\/h2>\n
Equity flying in for uranium stocks<\/h2>\n