Experts at the RIU Explorers Conference in Fremantle have offered some advice to juniors for the year ahead.
The market for juniors has deteriorated since the start of January, though the strong turnout at the conference is a sign there’s still plenty of interest.
ANZ relationship manager – junior resources Tim Robertson said there was one word to sum up the year ahead: volatile.
The bank forecasts little upside in battered lithium or nickel.
For lithium, ANZ expects production to rise by 40% this year, while demand will only increase by 25%.
“We could see further lithium projects being deferred or existing projects curtailed,” Robertson said.
On the macroeconomic front, the US election will be a key theme of 2024.
“The $64 million dollar question is this: what would a second Trump presidency look like?” Robertson said.
While there’s speculation Trump would repeal the Inflation Reduction Act, Robertson noted that two thirds of the IRA money to date has gone to Republican districts.
“You could mount an argument that Republicans, rather than Democrats, are benefitting from the IRA,” he said.
“It poses a conundrum for Trump.”
Interest rates and inflation will be another area to watch in 2024.
Robertson warned juniors with decent cash balances to manage them carefully.
“For juniors with cash balances, unfortunately interest rates coming down is not so good,” he said.
Geopolitical turmoil and reducing interest rates are likely to benefit the gold price and Robertson said ANZ expected the price to average above US$2000 an ounce.
BDO corporate finance partner Adam Myers said there should be a pick-up in merger and acquisition activity, based on the number of inbound inquiries being received.
Already during the conference, Horizon Minerals and Greenstone Resources have announced a merger and Hammer Metals and Carnaby Resources have confirmed merger discussions.
Hamilton Locke partner, corporate Jeremy Newman warned juniors to get their market compliance and disclosure right.
“If you get the little things right, it improves your reputation with investors and the regulator and makes the big things easier,” he said.
“The ASX is particularly active in a quiet market so we can expect a more interventionist ASX in 2024.”
Newman said areas of focus for the ASX was visual mineralisation estimates, production targets, scoping studies and acquisitions.
The inclusion of the term “bag of dicks” in the JORC tables of Great Boulder Resources’ announcement last week led Newman to his final piece of advice.
“A gentle reminder to proof-read your tables.”
