The ASX 200 reached a record high early in the week before flattening out, a reminder that markets can hit milestones even as uncertainty simmers beneath the surface.
Despite the sideways finish, a couple of stories caught our eye:
- Gold surges past US$3,400 on the back of rising geopolitical risk, inflation concerns and debt anxiety.
- Asian Battery Metals keeps hitting high-grade massive sulphides at Oval, with the story growing deeper.
- The Adriatic Metals cinderella story from 20c share price concluded this week with a $5.60 takeover.
Gold Hits Two-Month Highs as Conflict Fears Rise
Gold surged past US$3,400 this week, and frankly, it’s not hard to see why. The Middle East has well and truly kicked offwith Israel and Iran trading serious blows that have raised fears the conflict could spill beyond the region.
What started as tensions has escalated into armed drones and missiles flying back and forth between the two, with casualties sadly reported on both sides.
Analysts from FX Street and CNBC also pointed to the mounting pressure from sovereign debt levels, inflation persistence and a weakening US dollar.
Amid it all, gold rocketed to eye-watering levels.
The gold spot price jumped more than 4% in two days and has shown little sign of retreat. Traders are now openly wondering if we’re at the start of a new bullish cycle rather than a temporary spike.
Some forecasts are already pencilling in US$3,650/oz this year if this conflict escalates further and macro conditions keep deteriorating.
This has direct implications for ASX investors with gold producers finally starting to see margins expand, and developers with quality ounces in the ground being reassessed.
Juniors with credible targets and tight capital structures, such as Bubalus Resources (ASX: BUS), should be front and centre in our eyes.
Even though BUS continues to trade at a $7 million valuation and $4 million in cash, those pending assay results could be a serious catalyst if they come back showing any decent gold grades.
Explore our top small-cap gold stock picks.
AZ9 Continues to Build a Copper Discovery Story in Mongolia
Asian Battery Metals (ASX: AZ9) released the first batch of assays from their phase 3 drilling this week, building out a much larger picture at their Oval discovery.
The response was initially positive, with the stock up more than 10% before being sold down to close the week.
As AZ9 shareholders, that sell-off surprised us a bit as we saw more thick, high-grade hits near surface and signs the system’s still growing.
Put simply, they’re getting closer.
The company still has a modest market cap of $11 million with a strong cash position of $5 million, which is plenty to keep exploring. We haven’t sold a share and will continue to hold.
There were a few highlights from the AZ9 announcement this week:
- Drill hole 34 returned 1.3m of massive sulphide with over 4% copper and over 3% nickel, from only 80m deep.
- Drill hole 33 delivered 27m at 1.36% copper and .86% nickel within a broader 88.5m mineralised zone at .62% copper and .45% nickel.
- Drill hole 32 intercepted sulphides from 293m deep, indicating that there may be a larger system at depth.
With copper supply tightening globally and exploration success stories few and far between, AZ9 finds itself in a position where each drill result is adding weight to the investment case.
Adriatic’s 20c IPO to $5.60 Takeover Shows What the right ASX Small-Cap Cn do
Adriatic Metals (ASX: ADT) first listed on the ASX back in 2018 at just 20 cents per share, quietly raising $10 million to fund exploration in an under-explored region of Bosnia.
This week, it was confirmed that Canada’s Dundee Precious Metals will acquire the company for US$1.3 billion, valuing Adriatic at the equivalent of $5.60 per share.
That’s a 28-bagger for early believers.
The scale of that uplift is about backing a team that kept delivering across every stage of the value curve.
Adriatic advanced the Vares Project into one of Europe’s most robust, high-margin polymetallic mines with a clear path to production and low operating costs in a favourable jurisdiction.
Dundee’s willingness to pay a premium shows the quality of the underlying asset and their confidence this thing will print money for years to come.
For retail investors and small-cap followers, it’s a real-world example of the upside that only this end of the market can offer.
Most small-caps don’t deliver anywhere near this kind of return, but the ones that do usually have strong management, consistent execution, and the ability to raise capital without diluting the story.
Opportunities like this still exist on the ASX, particularly in the metals space where supply gaps are widening and majors are hunting for new inventory.
Finding them early and holding on through the ups and downs is tough, but when it works, as Adriatic just proved it can, you’re looking at retirement money.
The Wrap
Gold has reasserted itself as a true safe-haven, copper is getting tighter, and quality exploration stories are finally starting to show their teeth. With all exploration stories we just need the drilling to return something substantial and we are off to the races.
This week we’ve seen the kind of deal that makes us all remember that investing in the small-cap space is worth it. Can we find the next ADT? We hope so, we’ll keep on researching and informing you as best we can along the way.
And Don’t Forget our ASX Stock-Picking Competition…
There’s still some time to get your tips in for our $2,500 stock-picking competition.
It’s a bit of fun and a little thank you to our community. If you’ve missed it so far – there’s $2,500 up for grabs if you can pick the best performing ASX stock from July through December.
Pretty straightforward – back your best conviction play and see how it stacks up.
Takes 30 seconds to enter and it’s completely free. Worth throwing your hat in the ring if you’ve got a stock you’re genuinely excited about, and you might earn a nice Christmas bonus for your troubles.
Give it a crack and send to any mates or fellow stock punters you think might be interested.
General advice warning
The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.
Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.
Disclosure
The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 750,000 shares of AZ9 at the time of publishing this article. Equities Club has been engaged by AZ9 at the time of writing.
Confidentiality notice
The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.
Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No. 519872.
General advice warning
The contents of this document are intended to provide general securities advice only and have been prepared without taking account of your objectives, financial situation or needs. Because of that you should, before taking any action to acquire or deal in, or follow a recommendation (if any) in respect of any of the financial products or information mentioned in this document, consulting your own investment advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs. If applicable, you should obtain the Product Disclosure Statement relating to the relevant financial product mentioned in this document (which contains full details of the terms and conditions of the relevant financial product) and consider it before making any decision about whether to acquire the financial product. Whilst the Equities Club Pty Ltd (“Equities Club”) believes information contained in this document is based on information which is believed to be reliable, its accuracy and completeness are not guaranteed and no warranty of accuracy or reliability is given or implied and no responsibility for any loss or damage arising in any way for any representation, act or omission is accepted by Equities Club or any officer, agent or employee of Equities Club or any related company.
Neither Equities Club, nor any of its directors, authorised representatives, employees, or agents, makes any representation or warranty as to the reliability, accuracy, or completeness, of this document or any advice. Nor do they accept any liability or responsibility arising in any way (including negligence) for errors in, or omissions from, this document or advice.
Disclosure
The directors, authorised representatives, employees and associated persons of Equities Club may have an interest in the financial products discussed in this document and they may earn brokerage, commissions, fees and advantages, pecuniary or otherwise, in connection with the making of a recommendation or dealing by a client in such financial products. Equities Club owns 750,000 shares of AZ9 at the time of publishing this article. Equities Club has been engaged by AZ9 at the time of writing.
Confidentiality notice
The information contained in and accompanying this communication is strictly confidential and intended solely for the use of the intended recipient/s. The copyright in this communication belongs to Equities Club. If you are not the intended recipient of this communication please delete and destroy all copies immediately.
Equities Club Ltd (CAR No. 001308139) is a corporate authorised representative of ShareX Pty Ltd, Australian Financial Services License (AFSL) No. 519872.