This week’s Bulls N’ Bears top ASX runner is … Orion Equities. Its shares rose more than 250 per cent to join fellow movers and shakers Pan Asia Metals, MTM Critical Minerals and Calima Energy.
A new year means a fresh start and a moment of excitement for those punters following ASX-listed companies.
Questions abound about which commodity will be the next to spark the imagination of investors, or which medtech will make a significant breakthrough in the quest to cure those pesky diseases still troubling the world.
But more importantly, the start of 2024 also means a fresh new list of companies running up the ASX boards and while it has been a relatively slow start for the market, there are certainly a handful that have kicked the year off with a bang.
This week’s big mover and shaker is Orion Equities, which surged more than 250 per cent from a previous close of 6.8 cents to touch 24c. Even though the trading volume was modest, the company may prove to something of a role model for how to play the long game.
Orion looks set to receive a tidy $5 million for relinquishing a long-held royalty it earned from the sale of some tenements, including the Paulsens East iron ore project, way back in 2005.
Strike Resources this week revealed it had entered into a share and asset agreement for the sale of its wholly-owned subsidiary, Strike Iron Ore Holding – the owner of Paulsens East – to Miracle Iron Holdings for $20.5 million. As part of the deal, Miracle requested the cancellation of the royalty that is payable to Orion’s subsidiary CXM for $2 million, with a further $3 million payment deferred until to the end of June.
Strike has advised that shareholder approval will be sought for the deal at an upcoming general meeting expected to be held next month. Orion currently holds 10 million Strike shares and will be excluded from voting.
Orion has already received more than $206,000 in royalties from Strike, but could be on the verge of pocketing more than 20-times that amount if the sale goes through. So, it appears that those tiny royalty payments that companies often add into sale agreements sometimes do pay off – or at least, for Orion this time.
Lithium certainly had an interesting 2023, with projects bought and sold in the now dominating James Bay region of the Canadian province of Quebec that so often appears in this column. And it probably will again … but not this week!
However, this year’s first major lithium runner has jumped on the purchase of a lithium brine project way down to the south of Canada, although it remains in the Americas.
Pan Asia Metals jumped from 12.5c to touch 26c for an increase of 108 per cent after it signed formal documentation to acquire the 1200-square-kilometre Tama Atacama project in Chile.
Management says the operation spans three salars – better described as salt flats or salt-encrusted depressions – and within the area are extensive lithium surface anomalies with assays up to 2200 parts per million lithium averaging 700ppm on a north-south trend that extends for 160km.
Pan Asia has entered into three binding option agreements to buy 100 per cent of the Dolores North, Dolores South, Pozon and Pink project areas that form Tama Atacama, in addition to the northern half of the Ramatidas project area.
The sheer size of the combined operations makes it one of the biggest lithium brine projects in South America. The company is in discussions with geophysics and drilling service providers and plans to begin drilling at the Pink project early this year.
Chile has long been known as part of the “lithium triangle”, with Bolivia and Argentina. So, could we be looking at an increased interest in the area? Could we have a new James Bay on our hands? Well, no, because this is lithium brines not pegmatites. But with major players like SQM and Codelco already in the region, it could be worth keeping an eye on.
A new year also means an opportunity for a company to claim the title of the first “Please Explain” from the ASX in this weekly column. And it is my absolute pleasure to announce that in 2024, the title goes to an explorer that interestingly featured in our last column of 2023.
Late last year, MTM Critical Metals saw its share price triple to 6.3c from a previous close of 2.1c after it acquired private company Flash Metals. However, that has nothing to do with its latest share price hike, which was a mildly more modest leap from 6.8c last week to 17.5c today during intraday trading.
On Wednesday, the ASX sent out its standard price and volume query after the market decided that MTM was the perfect stock du jour to start 2024, with more than 25 million shares changing hands when trading reopened the previous day.
MTM’s response was swift and brutally honest. The company simply said it was in possession of assay results relating to four diamond drill holes at its Pomme rare earths-niobium project in Québec, which had not yet been released to the market.
It then promptly released the results and lo-and-behold, they were pretty good. One hole intersected 330m grading 0.34 per cent total rare earth oxides (TREO) and 0.02 per cent niobium oxide from 71.7m, including several zones greater than 0.6 per cent TREO. A second hole recorded 468.35m going 0.29 per cent TREO and 0.06 per cent niobium oxide, including 74.75m at 0.47 per cent TREO and 0.06per cent niobium oxide from 252m.
Now some of you may be thinking Quebec. Is the Pomme project near that most famous of Canadian regions in James Bay? Well, no, not really.
While Pomme is closer to James Bay than say, Montreal or Quebec City, it is still a fair distance away. However, it is positioned only 7km from the world-class carbonatite-hosted Montviel deposit that has a resource of 266 million tonnes at 1.45 per cent TREO.
Maybe the area is the James Bay of rare earths? Time will tell.
Our final runner to start the new year is Calima Energy, which saw its share price move from 6.5c to 11.5c during intraday trading today when it agreed to sell its wholly-owned Canadian subsidiary Blackspur Oil Corp to Astara Energy for $83.3 million.
Blackspur Oil holds the Brooks and Thorsby oil production assets in the Canadian province of … wait for it … Alberta. Of course, it wasn’t going to be James Bay – it’s oil and gas, not lithium.
Management says its objective is to distribute no less than 85 per cent of the funds received from the Blackspur sale to Calima shareholders in the most tax-effective form and will seek an ATO ruling on the matter in a timely fashion.
Not a bad start to 2024 for some astute investors.
Upon the closing of the Blackspur sale and distribution to shareholders, Calima will continue to be listed on the ASX and will focus on maintaining the production from its Paradise well in British Columbia and on the acquisition of further oil and gas assets that align with its current portfolio.
And so ends the first Runners column in what looks set to be another intriguing year on the ASX.
Will Canada continue to make headlines as one of the premier mining jurisdictions in the world? Will South America become the lithium producer to rival the mighty Greenbushes? Or will a new use of a somewhat relatively undervalued resource lead to a climb of astonishing new heights?
Stay tuned, dear readers, and we will enjoy the wild ride together.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
