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Lithium let-down softens miners

Today saw a soft ASX session for resource sector bulls with the Metals & Mining index closing down about 0.3% as the super fashionable lithium sector was sold down.
Lithium let-down softens miners Lithium let-down softens miners Lithium let-down softens miners Lithium let-down softens miners Lithium let-down softens miners

Staff reporter

The sell-down came as Rio Tinto reportedly dropped a plan to buy a stake in Chilean lithium major SQM.

Meanwhile, base metal futures were broadly positive in Asian trade, while the gold patch was an exception with a gain of 0.5% - and a bullion price of about US$1,318 per ounce when the market closed.

AngloGold had the biggest headline gain among the bigger miners, though turnover was piffling.

For the juniors Diatreme Resources (DRX) leapt as much as 150% during the session as it pointed to Chinese backing for its Cyclone zircon project in the Eucla Basin near the Western Australian border with South Australia.

Details are sketchy, but the broader backdrop is pricing for zircon and other mineral sand products is strong and the outlook good - give or take.

Ditto the case with zinc, and zinc-leveraged Ferrum Crescent (FCR) was showing a gain of 50% in late trade on less than impressive turnover.

Elsewhere tungsten stock Vital Metals (VML) gained 40% on the back of no company-specific news, with the company also drilling for gold in Niger last month.

Meanwhile one of the recent junior lithium favourites of late, Dark Horse Resources (DHR), had another good session with a 33.3% gain on no news - after telling quizzical market authorities yesterday that any recent buying in the stock could probably be attributed to the good vibe in the sector (up until today!)

Another lithium junior Walkabout Resources (WKT) moved up 26% as it expanded its exploration in Namibia, while Angola diamond producer Lucapa Diamond Co was showing a gain of more than 20% in late trade after finding microdiamonds while exploring in Australia.

Finally royalty company Royalco Resources (RCO) moved up 25% on weak turnover. Royalco changed its board late last year and is looking at various options to reduce its costs and improve returns to shareholders including de-listing.

Sounds drastic.