• Benchmark Aussie index is up about 0.72% over the past week after Wednesday crash reversed much of the early week gains 
  • Interest rate easing cycle “to commence in November 2024 (from September 2024 previously)”: CBA
  • Explorer Rincon Resources (ASX:RCR) pumps ~250% over the past week on WA1 Resources nearology

 

Tracking gains on Wall Street, the ASX 200 is heading to end a choppy old week higher, thanks to a strong Friday tailwind from the north.

Over the last five days, the benchmark Aussie index is up about 0.72%.

Via ASX

Local equities reversed much of the gains of earlier in the week when it crashed on Wednesday, closing at its second-lowest level since February.

Less than 10% of the main board closed higher on Wednesday, with the broad-based sell-off sending all 11 major sectors lower.

The bourse was unable to regather it’s confidence in time after a weak lead and miserly opening ahead of the midweek US Fed’s interest rate decision, which ended up being more about smoke than fire as the Fed left interest rates unchanged at a 23-year high. This was the sixth consecutive meeting with no change.

And speaking of a date with rates, this week the boffins at the CBA economics brains trust shifted their base case for the RBA.

“We now expect an easing cycle to commence in November 2024 (from September 2024 previously),” writes one of the bigger boffins, snr economist Belinda Allen on Friday.

“And we now expect only one 25bp interest rate cut in 2024.

“We now also forecast a more elongated cycle with 100bp of cuts in 2025 taking the cash rate to 3.1% by year end.”

The catalyst for the change was the stronger than expected Q1 24 CPI print last week.

As that news was digested across local equities markets, the US FOMC did it’s own rate dance, holding the Fed Fund’s rate steady at 5.25‑5.50%.

There was widespread expectation in financial markets that the post meeting statement and communication from Fed Chair Powell would be hawkish following the re-acceleration of inflation to start 2024.

In the event, J. Powell was actually quite measured and Wall Street took that as bonus dovish tilt.

On the possibility of further hikes, Powell surprised by suggesting there was ‘no evidence supporting that conclusion’.

CBA international economics crew forecasts the FOMC will start an easing cycle in Q4 24 with 25bps of cuts in both November and December.

On the commodities front, WTI crude futures are well below US$80 on Friday, which means oil prices have pretty much lost 5% this week. The welcome slide is largely thanks to a mix of a better week in the Middle East, burgeoning US crude supplies and further demand uncertainty thanks to China.

Looking quickly ahead, there’s Q1 24 retail trade volumes next week but otherwise at home it’s all about the May RBA Board Meet.

The wider economic universe reckons the home cash rate will be left on hold at 4.35%.

The May Statement on Monetary Policy will also be foisted upon us, and the Governor will front the now customary media conference.

Who won the week’s Small Caps race? Read on to find out…

 

THE ASX SECTORS THIS WEEK

 

Via MarketIndex

SMALL CAP WINNERS THIS WEEK

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Rincon Resources (ASX:RCR) jumped over 25% on Monday and on Friday morning it added another 26% as investors piled in after news earlier in the week that the company has kicked off initial reverse circulation drilling program of up to 2,000m at Pokali to test four target areas that are looking great for solid copper hits.

RCR is now up around 250% over the past week as news of its recent uncovering of a ‘bullseye’ target at its project in the West Arunta region of WA continues to spread.

And that’s a target, dubbed Avalon, “of similar size and character” to WA1 Resources’ (ASX:WA1) Luni carbonatite, and IOCG (iron oxide copper-gold) deposits like Prominent Hill and Ernest Henry.

 

SMALL CAP LAGGARDS THIS WEEK

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HOW THE WEEK SHOOK OUT

Monday 29 April, 2024

No news, but up like a French flag on Bastille Day.was copper prospect Canterbury Resources (ASX:CBY).

Probably because Stockhead’s Garimpeiro went looking last week for juniors in the copper porphyry space and got frothy when it came to a little thing he covered years ago

Garimpiero believes CBY’s closer to a Tier 1 copper-gold porphyry deposit.

“It has stuck to its task over the years and has some 1.8Mt of copper and 3.16M ounces of gold in resources spread across projects in Queensland and PNG, all of which are the subject of joint ventures with deep-pocket partners.”

Rincon Resources (ASX:RCR) jumped over 25% and RCR is now up around 220% over the past week as news of its recent uncovering of a ‘bullseye’ target at its project in the West Arunta region of WA continues to turn heads.

And that’s a target, dubbed Avalon, “of similar size and character” to WA1 Resources’ (ASX:WA1) Luni carbonatite, and IOCG (iron oxide copper-gold) deposits like Prominent Hill and Ernest Henry.

Errawarra Resources (ASX:ERW) was back in the news after striking a deal with Alien Metals  (LSE:UFO) for a handy looking JV at Pinderi Hills located in the West Pilbara.

Executive Chairman Thomas Reddicliffe says the project comprises 175km2 of prospective ground which comprises both granted mining leases and exploration licences and  is located 25km to the southwest of Errawarra’s heroic Andover West.

Also digging for dosh on Monday, was Aspire Mining (ASX:AKM) which has developing coking coal assets in Mongolia.

AKM says it’s been working through major permits and approvals required to begin mining at the flagship, 100% owned Ovoot project as it prepares updates to its JORC coking coal reserve estimates.

The final one of those important approvals has been ticked off the to-do list, as of Monday, AKM told the exchange.

 

Tuesday 30 April, 2024

Sihayo Gold (ASX:SIH) rose after announcing an off-market takeover offer from a cashed-up group called Provident Aurum, owned by Indonesian firm Provident Minerals, which happens to be Sihayo’s largest shareholder since 2013. Provident provided a recent unsecured working capital loan of US$3.9 million to Sihayo, and assistance in connection with Indonesian regulatory approvals. The proposed offer is at a price of 0.225 cents cash per Sihayo share, and is subject to a number of conditions, naturally.

A successful relaunch for Ovanti (ASX:OVT) which recommenced trading today and saw its price triple from its recent 1 cent raise to as much as 3.1 cents to settle at 2.8 cents. Ovanti wants to capitalise on resurgent interest in the BNPL space and grow its offering aggressively throughout the lucrative markets of South-East Asia

Oceana Lithium (ASX:OCN) announced a defined a large uranium anomaly, +4.5km long and 700m wide, and the Napperby project in the Northern Territory. That’s a project situated within the Arunta Province, which is known for its highly prospective lithium rocks, Rare Earth Elements (REEs) and uranium mineralisation. The Paleoproterozoic Wangala and Ennugan mountains in the region are renowned as “hot granites”, notes the company, hosting uranium and REEs in particular.

Also rising sharply was the software stock Knosys (ASX:KNO) which hauled in some $507K in Q3 profit, reportedly leaving KNO on track to deliver “a strong maiden annual positive EBITDA and positive cashflow in FY24.”

Marmota (ASX:MEU)  announced that, as part of its Project X regional reconnaissance program, drilling at Target 5, ‘Goolagong’, on EL 5818 (100% owned) has yielded a potential new gold discovery. The last 2 metres drilled in Hole 23MR184 returned significant gold, with the grades notably increasing to the end of hole at 38m: 2m @ 0.64g/t gold From 36m downhole to end of hole, and from 36m to 37m: 0.53g/t gold.

 

Wednesday 01 May, 2024

Strike Resources (ASX:SRK) is in the winner’s circle after  Lithium Energy (ASX:LEL)  announced yesterday that it had sold its 90% share of the Solaroz lithium brine project in Argentina to CNGR – one of the world’s largest producers of precursor materials for leading companies in the battery materials supply chain – for about $97 million in cash. Strike is a 27% shareholder in LEL.

YPB Group (ASX:YPB) was top of the small caps charts on news that the company has raised $33,075 after costs at a small 5.6% discount to the 15-day VWAP via an At-The-Market (ATM) subscription facility with Dolphin Corporate Investments. That deal was signed in November of last year, giving YPB access to up to $2 million – and today’s dip into the kitty comes on the heels of the company’s recent quarterly, showing that it has managed to reduce cash burn by 24% on Q4 2023 thanks to a revenue bounce.

Kalina Power (ASX:KPO) inched up $0.001 (+33.0%), ostensibly on news that it has appointed former Macquarie Capital Markets Canada CEO Matthew Jenkins to its board as non-exec director, as well as the board of its wholly owned Canadian project development company, Kalina Distributed Power.

Lithium project developer Anson Resources’ (ASX:ASN) signs a binding offtake deal with battery maker LG Energy Solution, which will buy 4000tpa battery grade lithium carbonate per year.

Orexplore Technologies (ASX:OXT) has been boosted this morning on news that it has developed a nuggety gold detection system that is being validated through commercial testing with multiple tier-1 gold mining companies. The company says its tech “identifies gold nuggets larger than ~100 micrometres throughout the entire core, providing data to support improved operational grade control and to assist in producing more useful estimates of gold mineralisation”.

Adisyn (ASX:AI1) will sell its VMware cloud platform for a total consideration of up to $1.4 million cash.

And Black Canyon (ASX:BCA) provided an update on activities in relation to production of beneficiated manganese concentrate feedstock from the KR1 and KR2 deposits. Dense Media Separation (DMS) has produced manganese (Mn) concentrates grades of 31.8% Mn and 31.3% Mn from the KR1 and KR2 test samples respectively. These results complement previously announced Heavy Liquid Separation (HLS) concentrates grades ranging between 29.2% Mn & 37.4% Mn also from KR1 and KR2.

 

Thursday 02 May, 2024

Cracking the top of the small caps market on Thursday was critical minerals-hunting junior Krakatoa Resources (ASX:KTA), smashing through on news that the company has identified a promising new niobium-REE gravity target at the Mt Clere tenement, located in the northwestern margins of the Yilgarn Craton in Western Australia.

Pivotal Metals (ASX:PVT) is concentrating its efforts in Quebec, Canada, eschewing the usual trendy lithium search in that region in favour of copper, nickel, and PGMs. First assay results from the first two of 34 diamond drill holes are back from its 100% owned Horden Lake project. It’s hit some thick copper zones, with Cu-Ni-Au-PGM-Co mineralisation, including 37.5m at 1.31% Cu equivalent.

Vinyl Group (ASX:VNL) was up on yesterday’s news that that Songtradr has issued a conversion notice for a portion of its Tranche #2 convertible note, increasing its beneficial ownership in VNL to 19.95%. The company says that Songtradr will convert a principal balance of $1,629,351 into 77,588,162 ordinary shares in VNL at the conversion price of $0.021 per share, with Songtradr CEO Paul Wiltshire saying his company is “very impressed with the strategic progress and discipline Josh and the team at Vinyl Group have shown over the last year”.

Meteoric Resources (ASX:MEI) says it has entered into a non-binding MoU with Neo Performance Materials (TSX:NEO) for an offtake of 3,000 metric tonnes total rare earth oxide (TREO) per year from its Caldeira Project in Minas Gerais, Brazil, to supply Neo’s magnet manufacturing plant. The deal allows a right of first refusal for Neo to purchase additional MREC (mixed rare earth carbonate) that Meteoric produces from the Caldeira Project in excess of 6,000 MT TREO per year, on similar terms.

Augustus Minerals (ASX:AUG) has been granted a co-funded drilling grant of up to $110,000 for 2 x 700m deep diamond drill holes under the WA Government’s Exploration Incentive Scheme (EIS) for the Minnie Springs prospect. The deeper diamond drill program is designed to test and to provide a 550m deep, 1km wide geological/geochemical/structural cross-section through the large 3km long by 1km wide copper moly porphyry system, linking the Mo mineralised leucogranite to the extensive Cu in soil anomaly to the northeast.

Insignia Financial (ASX:IFL) says Funds Under Management and Administration (FUMA) increased by $11.7 billion (+3.9%) to $312.3 billion as at 31 March. Total net outflows for the quarter were $1.7 billion, largely reflecting the transitory impact of execution of wrap platform consolidation.

 

Friday 03 May, 2024

PPK Group (ASX:PPK) was out in front Friday morning, making gains on Thursday’s news that investee company Craig International Ballistics has been handed a very juicy $30 million order for body armour by the Australian Defence Force.

The remit for the contract will see Craig International Ballistics manufacture and deliver a new order of body armour components to help protect troops from moving threats like fragmentation, and low and high velocity rounds, from its factory in Queensland.

Emu (ASX:EMU) was showing a healthy uptick on Friday morning after announcing the completion of it’s 1:30 consolidation.

And Savannah Goldfields (ASX:SVG) was up on news that definitive transaction agreements have been entered into for the sale of the company’s remaining shareholding in Renison Coal, the entity that owns the Ashford coking coal project, to Clara Resources Australia for $3.95 million, and a tidy $0.75 per tonne royalty on coal sales as the cherry on top.