Share price flies as US says yes to Element 25 manganese

Boxing pundits often extol the pugilistic virtues of the legendary Gennady Gennadyevich Golovkin – perhaps better known by his nickname “Triple G”, or “GGG”.

The legendary Kazakhstani fighter held multiple middleweight world titles across a decade and was voted the best pound-for-pound boxer on the planet by the renowned The Ring magazine in 2017-18.

But this week at Runners, we came up with our own version of GGG … and no, I’m not talking about our esteemed editor, who has been known to do the occasional bout of shadow boxing at home when no-one is looking (and sometimes even when they are).

I’m actually referring to the grant, gas and gold influences that drove several respective share prices skyward this week when news of their potential positive impact on the relevant companies was released to the market.

So, onto this week’s top Bulls N’ Bears Runner of the Week, Element 25.

After the company’s shares went into a trading halt last Friday morning, it then revealed on Wednesday that its high-purity manganese project had been selected by the United States Department of Energy (DOE) for award negotiations for a US$166 million (AU$241.5 million) grant.

Management says the grant funding will support the construction of its proposed battery-grade, high-purity manganese sulphate monohydrate (HPMSM) facility to be built in US State of Louisiana. It will enable the company to supply the critical raw material required in lithium-ion batteries for electric vehicles (EVs). 

The funding amount exceeds half the expected cost to build the facility, which was estimated at US$289 million (AU$420.3 million) in a feasibility study released in April last year. Element 25 has already received commitments for US$115 million (AU$167 million) from auto manufacturing offtake partners, General Motors and Stellantis.

The company’s often thinly-traded stock surged on heavy volume of 16.3 million shares on Wednesday. Previously, the shares had exceeded a trading volume of 1 million in a single day only on a handful of occasions in the past year.

Its previous peak volume for the past 12 months was 2.09 million shares swapping hands on May 14.

With such whopping volume on the day, it was no surprise to see the stock burst out of the blocks after the halt was lifted, hitting an intraday high of 48c. After closing last week at 21.5c, that made for a stellar weekly gain of more than 123 per cent.

The company’s plan is to ship manganese ore produced at its Butcherbird mine in the south of Western Australia’s Pilbara region, to the Louisiana facility for processing.

The award negotiations process begins once DOE notifies a successful applicant of their project’s selection. Negotiations allow the DOE’s Office of Clean Energy Demonstrations and the selected applicant to develop an understanding of the scope of the project, the project’s budget, the requirements of the agreement and to ensure the applicant has the necessary financial systems and policies and procedures in place to manage such an award.

Now, if you loyal readers thought we could go a week writing this column without mentioning the pin-up metal of the month – antimony – you would be mistaken. At least that appears to be the case while it remains front-and-centre in many company announcements.

And it certainly gave junior mining company West Cobar Metals a decent shot in the arm this week. The company disclosed on Tuesday that recent diamond drilling at its Bulla Park project, which sits some 110km west of the mining town of Cobar in central-western New South Wales, encountered a 190m-thick intersection grading 0.08 per cent antimony and 0.23 per cent copper from 128m.

Cobar is also known as “the copper city” as it was once Australia’s biggest producer of the red metal.

Selected hits from West Cobar’s latest program included 1m at 0.55 per cent antimony and 1.04 per cent copper from 204m, in addition to 66m running 0.13 per cent antimony, 0.34 per cent copper and 7 grams per tonne silver from 200m.

The impressive hits followed previous results of 33m going 0.15 per cent antimony and 0.47 per cent copper from 229m, bolstering management’s confidence in the presence of a sizeable antimony-copper system at the site. Market punters seemed to agree, propelling the shares that were priced at 2.7c at last Friday’s close to an opening price of 5c.

They then ran to 5.5c, producing a gain of more than 103 per cent from Friday’s close. Volumes set an all-time high for the company’s stock, with 26.6 million shares changing hands, followed by solid trading numbers on Wednesday of 2.3 million units.

After China imposed export restrictions on the military-use alloy, which is known for strengthening bullets and other equipment, the lustrous grey metal has taken off on a run like a stallion let loose from its paddock. The latest pricing has antimony trading near US$23,000 (AU$33,400) per tonne, a gain of more than 100 per cent for the year.

Junior gas hopeful Emperor Energy also had the market sitting up and taking notice when it revealed a double-banger of an announcement that it had raised $1.25 million from three of Australia’s leading small-resources investment funds and appointed broking firm Argonaut to bring a consortium of heavy-hitters together to develop the company’s 100 per cent-owned Judith-2 well within the Judith Gas Field exploration permit area in Victoria’s Offshore Gippsland Basin.

Regal Funds Management, Perennial Value Management and Nero Resource Fund will assume “substantial shareholder” status with their investments, post approval of the second-tranche placement, taking them past the 5 per cent share ownership threshold.

All three will be licking their lips at securing shares for a slightly-discounted 0.7c, after the news sent the stock that closed on Friday at 0.8c to a high of 1.7c on Thursday, for a mighty leap of 112.5 per cent.

Market punters must have also been tickled pink, as unlike many small companies which see share prices shoot skywards only to watch them then plummet to earth just as quickly after a big announcement, Emperor’s price has continued to rise since its latest disclosure.

At a price of 1.4c at Monday’s close, after its highest daily volume for more than two years with a huge 22.1 million shares changing ownership, the price reached 1.5c on the next two trading days before touching 1.7c on Thursday. It was still trading at the same level Friday morning at the time of writing.

Management believes the Judith-2 well and the greater Judith Gas Field has the potential to supply south-eastern Australia with a new source of gas supply.

The price of gold has continued to surge in the past week, up almost three per cent at one stage, in addition to its stellar gain this year of nearly 30 per cent.

So, when you declare a big exploration target for a project that previously focused on other commodities, the market’s gold bugs will raise an eyebrow in interest.

Aspiring goldie Neometals did just that this week and caught the wave of positive sentiment for the shiny yellow metal, rising a solid 80.23 per cent from last week’s 8.6c close to touch 15.5c on Thursday on good volumes.

It came after management revealed it had dusted off historical data to unveil a new WA gold strategy at its Barrambie project that previously produced 27,000 ounces at 27.8g/t.

The region’s rich titanium and vanadium reserves has left the area's potential for gold largely unexamined. However, the company says recent rock-chip samples that threw up grades from 5.1g/t to as high as 44g/t, has prompted it to pivot back to the yellow metal and it now views it as the company’s priority commodity.

Neometals believes the results, corroborating historical grades, indicate camp-scale potential where multiple deposits across the belt could contribute to a much bigger, untapped gold resource. It has delineated an exploration target for Barrambie ranging between 8 million tonnes at 1.3g/t of gold to 10.5Mt at 2.3g/t, translating to a potential of between 335,000 and 775,000 ounces.

Still, punters need to be aware it is only a conceptual target, with more exploration required to establish a formal resource.

A further positive for Neometals’ share price was that the European Union (EU) recently delivered a crucial endorsement for its vanadium recovery project (VRP) in Finland, co-funding part of the company’s bid to become Europe’s first vanadium producer. The funding deal for the project that refines waste from steelmaking into the valuable vanadium battery metal was executed with Germany’s EU-backed EIT RawMaterials and could be worth up to some AU$42.3 million.

In closing, it is fair to say that we here at Runners love to see a company going back-to-back and securing consecutive appearances in our esteemed weekly column. After appearing in both our Runners and Big Hits columns last week, Mithril Silver and Gold has once again captured the market’s full attention this week, taking another giant leap forward with its share price climbing again, this time from 37c to hit a high of 81.5c.

The magnitude of Mithril’s run in the past few weeks justifies the high level of interest that is maintained in the small-cap resources sector.

Sitting at 12.5c on September 13, a series of announcements from the company sent its share price on an absolute tear to hit the 81.5c on Wednesday, eight trading days later.

The 552 per cent increase in the share price within such a short timeframe proves there is money to be made if you put it into the right companies, before and even shortly after their “game-changing” reveal.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au