Lithium helps light fuse for investors

TIN and European exploration rarely excite investors, but add the favoured element of lithium and suddenly everyone is all ears.

Work starts on a lithium mine in Western Australia.

TIN and European exploration rarely light a fire under investors here, but add one of the new favoured elements — in this case lithium — and suddenly everyone is all ears.

On Saturday news broke that Indonesia’s top miner Timah has suspended new tin sales until the solder material rises above (at least) $US20,000 a tonne. The metal got as low as $US17,445 a tonne during the week. That was a 30-month low, although it did recover as the week ground on. Still, even the Friday close of the three-month price at $US18,275 a tonne is a loss of 7.2 per cent since January, the second worst (after copper) on the London Metal Exchange and trailing the LME’s index.

So if a big tin release had been put out last week, it would probably have been largely ignored. But add lithium and it was all very different.

European Metals (EMH) has attracted little attention so far with its Cinovec tin-tungsten-lithium project in the Czech Republic, but that changed on Monday when it announced a 175 per cent increase in contained lithium, along with 7 per cent more contained tin and tungsten. Shares went from 4.7c to 6c on the news.

The enthusiasm spilled over on to Cobra Montana (CXB), which has a joint venture with EMH covering the lithium at Cinovic. Cobre is using its licensed technology to extract the lithium. Tests have achieved float recoveries of 98 per cent. Cobre is looking at producing battery-grade lithium carbonate as a by-product of the tin. (The next day CXB reported it had completed the process of acquiring another lithium project, at Ravensthorpe in Western Australia.)

The other European story that piqued interest was that of Talga Resources (TLG) with its graphite projects in Sweden.

There were no new developments but it seems that a report in Tuesday’s The Australian raised the excitement level. This newspaper reported that veteran stockpicker Warwick Grigor, of Far East Capital, had built a $3.4 million stake in the junior because its graphite is of a type that can be processed directly into the wonder material graphene.

The stock, which had closed on Monday at 30.5c, had risen as high as 44c by Thursday.

Nyoto Minerals (NYO) did not manage a price jump on its Italian news but certainly there was a spike of trading: by the time of its Tuesday announcement, 13 trading days had passed without a single Nyota share changing hands, but on Wednesday 4.8 million shares went through, with another 5.8 million on Friday.

Nyoto is buying a 70 per cent interest in a project in the Piedmont region of Italy. The permit area contains at least five underground historic nickel mines.

Recently Forte Energy (FTE) unleashed some interest with the 70 per cent upgrade (to 166,000 tonnes) at its uranium ground in Slovakia. At 0.3c it was ideal for those who hunt in the deep recesses of the penny dreadfuls but 23 million shares changed hands on the news and the stock rose to 0.5c.

Dragon Mining (DRA) last week was able to generate a zephyr of interest by acquiring another gold project in Scandinavia, and Highfield Resources (HFR) has been getting some market traction with its Spanish potash. Among the other European plays possibly worth following are Prairie Mining (PDZ), which this month expanded its Lublin coal project in Poland by another 54sq km. Plymouth Minerals (PLH) is hunting tungsten in Spain, Potash West (PWN) is targeting the fertiliser ingredient in Germany, while Variscan Mines (VAR) has received encouraging gold assays from one of its French projects.

Gold still shines

THE headlines from the World Gold Council’s latest update during the week shouted that demand was down in 2014, and particularly in China, a year in which global mine production reached a new high. Yet we never hear of a gold surplus and the $US1228 an ounce close on Friday does not suggest buyers are heading for the hills.

Then there was Friday’s Reuters report that stock valuations of Chinese gold producing companies have hit multi-year highs. A year ago the median price-to-earnings ratio of the six Chinese listed companies earning a profit — Zijin Mining, Shandong Gold, Zhongjin Gold, Chenzhou Mining, Jin Guyuan and Shandong Humon Smelting — was 22.1. Now it’s 57.4.

In gold news here, Metals X (MLX) showed what you can do when you have $120m in the bank, strong cashflow from mining operations and no corporate debt. It made junior Tanami Gold (TAM) an attractive offer for 75 per cent of its gold project in the Tanami Desert and had it accepted.

General stars

SHARE price performance of the week surely goes to General Mining (GMM). The junior’s shares closed at 0.3c on February 6 but last Tuesday would hit an intraday high of 13c, a 4233 per cent rise, on news it was taking over the Mount Catlin mine.

GMM is interested mainly in the tantalum at the West Australian project. It will announce a raising this morning.

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No investment advice is implied and investors should seek professional guidance. The writer does not own shares in any company mentioned.