If you have been following commodity indices lately, it's hard not to say that base metals had a volatile 2022.
The year started with several metals clocking all-time highs, then dropping to record lows, with the Ukraine war and China COVID lockdowns aggressively swaying the prices.
However, several base metals like copper and nickel made a resurgence in the December quarter and continued on the same trend in the new year.
In the spotlight: Copper
Copper prices made a resurgence in the December quarter, after reaching record highs in March and then plummeting to a two-year low in June, still ending the year down more than 14%
In the March quarter, copper prices soared to a record high above US$10,000 a tonne on the London Metals Exchange, with US high-grade copper futures clocking above US$5 per pound.
However, these record prices were short-lived as the prices took a plunge with growing recession fears, spiralling downward to a nearly two-year low below $7,000 per tonne or $3.20 per pound.
Looking ahead, several commodity analysts expect copper prices to remain muted as tightening central bank monetary policies and weak demand out of China take their toll on the market, at least during the first half of the year.
Copper prices in 2022
Here are some of the copper stocks that generated strong news flow in the December quarter:
Aeris Resources
Aeris Resources Ltd (ASX:AIS) demonstrated strong financial figures during the December quarter, banking $76.4 million in cash and receivables, up 39.4% compared to the previous quarter in 2022.
During this period, the company delivered copper equivalent production of 13,100 tonnes, dominated by quarter-on-quarter production increases from its Tritton and Cracow operations.
Notably, the quarter saw operating costs below or in line with the plan across all operations, with a group-wide initiative being rolled out to continue to focus on cost management.
At Tritton in NSW, Aeris continued to generate positive news flow, intersecting high-grade copper drill intersections at Avoca Tank and Kurrajong.
Also, during the quarter, the company confirmed mineral resource upgrades at the Golden Plateau prospect at Cracow in Queensland and Turbo prospect at the new Jaguar operations in WA.
Furthermore, Aeris received $28.7 million from Washington H. Soul Pattison as part of finalising the working capital adjustment associated with the Round Oak Minerals acquisition.
Production figures in comparison to the September quarter
Celsius Resources
Celsius Resources Ltd (ASX:CLA, AIM:CLA) continued to make significant progress during the December quarter at its Maalinao-Caigutan-Biyog (MCB) Copper-Gold Project in the Philippines, advancing key activities towards mine construction and operations.
With an updated mineral resource estimate (MRE), the global MRE for MCB is now 338 million tonnes of 0.47% copper and 0.12 g/t gold for 1.6 million tonnes of contained copper and 1.3 million ounces of contained gold reported to a preferred lower cut-off grade of 0.2% copper.
The results from MCB continue to extend the envelope of the near-surface mineralisation to the east complementing previous drill results from holes completed at MCB from 2021 to 2022 and validating the historical drilling information completed by Freeport-McMoRan.
At the Sagay Copper-Gold Project, also in the Philippines, the highlight was the maiden MRE of 302 million tonnes of 0.41% copper and 0.11 g/t gold, at a lower cut-off grade of 0.2% copper.
Furthermore, a continuation of desktop review and study of recent drilling results were undertaken, along with previous drilling and exploration data, to reinterpret the geologic and mineralisation models and resource evaluation to improve exploration and future development strategies.
Location map of MCB drill holes.
Cooper Metals
During the December quarter, Cooper Metals Ltd (ASX:CPM) intersected more significant copper-gold mineralisation at its flagship Mt Isa East Project in Queensland and has confirmed continuous mineralisation to 170 metres below historical workings and this remains open at depth.
Standout assays include:
- 17 metres at 1.7% copper and 0.38 g/t gold from 49 metres, including 4 metres at 6.2% copper and 1.31 g/t gold;
- 9 metres at 2.5% copper and 0.25 g/t gold from 94 metres, including 5 metres at 4.2% copper and 0.39 g/t gold; and
- 12 metres at 0.6% copper and 0.02 g/t gold from 148 metres, including 2 metres at 1.3% copper and 0.04 g/t gold.
The company's Induced Polarisation (IP) survey highlights chargeability anomaly continuing at depth, with the southern end of King Solomon 1 the highest priority.
In Western Australia, a program of work was resubmitted for auger drilling at Gooroo Copper-Gold Project to better define the gold anomalies discovered in early 2022 in preparation for drill testing.
Mount Isa Project location.
In the spotlight: Nickel
Nickel has emerged as the clear winner among base metals that have survived a volatile year.
Nickel prices have increased by 29% since the beginning of 2022, despite falling from $100,000 per tonne during a short squeeze in March.
After rising to multi-year highs in the first quarter as a result of Russia’s invasion of Ukraine, a global economic slowdown caused by central banks’ aggressive monetary tightening and the effects of COVID-19 lockdowns on China’s economy have wiped out gains for other industrial metals.
Nickel prices in 2022
Here are some of the nickel stocks that generated strong news flow in the December quarter:
Queensland Pacific Metals
Queensland Pacific Metals Ltd (ASX:QPM) kicked off the December quarter with a major investment and offtake agreement with General Motors (NYSE:GM), receiving a potential investment of up to US$69 million by the way of equity subscription for ordinary shares in the company.
During the quarter, the company released the results of an advanced feasibility study for the 1.6 million tonnes per annum stage 1 TECH Project, demonstrating attractive project financial metrics.
In addition, QPM has now received all major federal and state regulatory approvals for the construction of the TECH Project.
Furthermore, the company has launched QPM Energy, a wholly-owned subsidiary, to vertically integrate the gas supply chain with the TECH Project and facilitate the reduction of carbon emissions from waste coal mine gas.
GM and QPM representatives.
Future Metals
During the quarter, Future Metals NL (ASX:FME, AIM:FME) intersected near-surface, magmatic sulphide mineralisation from its diamond drilling program, providing further evidence for a potential large nickel-copper-PGE sulphide system at its Panton Project in the eastern Kimberley region of Western Australia.
In total, six diamond drill holes were completed during the quarter as part of the company’s ongoing drill program, with every hole intersecting sulphide mineralisation.
Detailed gravity and magnetics modelling were completed, delineating nickel-copper-PGE sulphide targets including modelling of the highly prospective keel position.
The company has made significant progress across its metallurgical test work and scoping study activities and will provide a detailed update to the market in the coming weeks.
Future's Panton location.
Poseidon Nickel
Poseidon Nickel Ltd (ASX:POS, OTC:PSDNF) reached an important milestone during the December quarter with the completion of the Black Swan 1.1 million tonnes per annum feasibility study, demonstrating that the project could deliver free cash flows of up to $333 million.
During the quarter, the company received offtake and financing proposals for the Black Swan restart activities, with shortlisted parties to conduct due diligence during the current quarter
What’s more, the Black Swan 2.2 million tonnes per annum expansion feasibility study continues to progress with some of the work undertaken for the 1.1 million tonnes study to be used.
Drilling at Black Swan.
In the spotlight: Zinc
Zinc is still shaking off the volatility it experienced in 2022 and has a mixed outlook in the market due to the uncertainty caused by geopolitical instability and high energy prices.
The metal prices surged in the March quarter as post-COVID demand recovery outstripped supply.
However, zinc prices fell in the second and third quarters as China imposed a mass lockdown across the country to control the spread of COVID-19, causing Chinese economic growth to decline sharply.
The London Metals Exchange three-month zinc contract fell to a near two-year low at US$2,680 a tonne on November 3, before climbing above US$3,000 in the following sessions.
Despite the supply constraints this year, some analysts were wary of the weak global demand weighing on the overall metal market and maintained a conservative zinc price forecast.
Zinc prices across the years
Here are some of the zinc stocks that generated strong news flow in the December quarter:
Apollo Minerals
Apollo Minerals Ltd (ASX:AON)’s Kroussou Zinc-Lead Project in Gabon has demonstrated the scale potential to be a 'super giant' base metals project and feature amongst the most significant underdeveloped zinc and lead projects globally.
During the quarter, the company revealed its initial JORC-compliant exploration target which consists of between approximately 140 and 300 million tonnes at grades between 2.0% and 3.4% zinc plus lead, identifying the significance of the exploration and development opportunity at Kroussou.
Apollo returned high recoveries and ‘exceptional’ high-quality zinc and lead concentrates from its metallurgical test work program at Kroussou.
Test work conducted using an optimised flow sheet demonstrated top-tier world-class recoveries with:
- 93.0% zinc recovery of the contained metal into a saleable zinc concentrate; and
- 94.4% lead recovery of the contained metal into a saleable lead concentrate.
Diamond drilling at regional target TP13 confirmed multiple holes intersect major high-grade mineralised structures in regional drilling, significant intersections included:
- 40.0% zinc+lead over 3.5 metres from 3.5 metres depth within a broader 6 metres at 18.0% zinc+lead;
- 10.0% zinc+lead over 4.4 metres from 37.4 metres within a broader zone of 8.7 metres at 6.0% zinc+lead; and
- 8.6% zinc+lead over 4 metres from 27.7 metres within a broader zone of 6.2 metres at 5.9% zinc+lead.
Exploration target comparison
Rumble Resources
Rumble Resources Ltd (ASX:RTR) ended the December quarter in a strong financial position, with $9.3 million in cash, advancing its emerging world-class Earaheedy Base Metal Discovery in Western Australia.
At the Chinook prospect, drilling targeting flat-lying zinc-lead mineralisation has discovered a vertical fault/structure related to high-grade copper and silver, with associated molybdenum, tungsten and nickel in a newly recognised polymetallic system.
At Navajoh, early interpretation of preliminary airborne gravity gradiometric (AGG) data highlighted a potential series of stacked east-west high-grade feeder structures along a nine kilometres strike.
Rumble returned high zinc recoveries of up to 90% zinc in cleaner concentrates from its metallurgical test work program at Earaheedy.
Notably, recoveries and concentrate grades are at the higher end of global benchmarks.
Looking ahead, Rumble is set to deliver its maiden mineral resource estimate in the first half of 2023.
Earaheedy prospectivity map.
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