As we roll into 2025, the signs are starting to show what is in store for the ASX mineral exploration sector. Gold is the standout but what is trending is the market response to good exploration results.
As we continue from our last blog, "Finally Gold Is King Again: The Tolukuma Gold Mine - Tolu Minerals Limited (ASX:TOK)", the gold trend is gaining strength. Over the last few years of the "Clean Energy Revolution", I do feel that we have been largely dragged down the path of critical metal and lost the simple basic principle of "Investing" in brick and mortar.
There is a reason the likes of Warren Buffet and Rick Rule keep telling us that the casino is not a place to build wealth. Unfortunately, like most "punters", I am always keen on the small mineral explorer sector and still see "investing" in the small end of the ASX as a sexy form of "Investment".
Figure 1: Gold price chart for the last 5 years. The rising strength in price is now getting serious. (source: Kitco)
In 2025, the strength of the gold price (Figure 1) is now a "Must Take Notice" as the gold producers are seriously laughing all the way to the bank. The ASX small end, where the mineral explorers exist, is very sensitive to things such as a rising gold price. To be truthful, this end of the market is easily driven by the potential of a rise in any commodity price. The issue is that this attention may take a long time to filter to the small explorers when it happens initially.
The recent activities observed, give me the confidence to think that the increasing price for physical gold is now filtering down to the junior end of the market. My confidence comes from the fact that the market is responding to drilling results, and in some way, the large trading activities give the appearance that the "punting" money may be back in town. As I have mentioned, the speculative nature of this sector is very sensitive, and it is reasonably easy to feel the flow-on effect when it happens.
One could argue that the recent market response may have more to do with punters or small-cap investors running out of bets and has just latched onto the trending gold rush to place their frustrations. Results recently released are not that much different from those that have been coming out the last 5 years. The difference is the market response.
Let's try and dissect this thought.
For those who want to skip to the parts of the review, please use the list below.
1.0 Evidence of Love For the Junior Sector of the ASX.
For investors in this sector, the fact that companies are getting market responses to results is the first confirmation of "excitement", excitement that is looking like it may lead to a resurgence of "punters" coming back into the ASX.
Let's go through some recent events that give me this impression.
1.10 Kalgoorlie Gold Mining Limited and E79 Gold Mines Limited
On the 7th of February 2025, Kalgoorlie Gold Mining (ASX:KAL) made an ASX (Australian Stock Exchange) release (Figure 2) on their recent drilling at the Lighthorse prospect at their Pinjin Gold Project, approximately 140km northeast of Kalgoorlie.
Figure 2: The highlights from the ASX release by Kalgoorlie Gold Mining. (source: https://investorhub.kalgoldmining.com.au/announcements/6783436?fromLink=true&)
As you can see in Figure 2 above, the initial results look significant and "interesting", which sparked a fantastic response from the company. The share price before the discovery results was trading at AUD $0.02 and that was the trading range since late 2023. There was some movement, but it never went past AUD $0.04 since mid-2023.
Figure 3: The share price chart for Kalgoorlie Gold Mining. (source: investing.com)
Personally, the results looked good, but with the state of the sector and having seen many of these kinds of early drilling results (even though the numbers looked good), I am surprised with the share price run, especially with the volume traded (over 200M, which I believe is over half of the total shares issued) on the day (Figure 3).
One would not think too much more about the meaning to the broader market if it was not for the fact that their neighbour E79 Gold Mines Limited (ASX:E79) had a significant rise in their share price (Figure 4).
Figure 4: The share price chart for E79 Gold Mined Ltd. (source: investing.com)
The movement in the E79 share price was enough to warrant a query from the ASX to explain why there was such a significant movement in the share price. E79 shares the tenement boundary with KAL, and the excitement came from the fact that the results potentially may "point" to the mineralisation extending into the tenement of E79 (Figure 5).
Figure 5: A map from E79 showing the potential direction of mineralisation. (source: E79 Gold Mines Limited)
The excitement is derived from the ASX released by Kalgoorlie Gold Mining, showing where the drilling occurred and the mineralisation dimension (Figure 6). It clearly gives the potential of the extension going into the E79 tenement. I remember one geologist telling me that the act of interpretation and project generation becomes crystal clear after a couple of red wines.
Figure 6: The map shown in the ASX release by Kalgoorlie Gold Mining Limited. (source: Kalgoorlie Gold Mining Limited).
What I am implying is that the potential is credible, but the response used to be very subdued, especially over the last couple of years. I know the team at E79 and have great respect for them, but the response from the market was what surprised me.
If you look at the discovery of the Hemi gold project in early 2020, a significant drilling result released by De Grey Mining Limited (ASX:DEG) on 17th December 2019 raised some eyebrows, but it did not create a storm. It was only after another two ASX releases that the major spike in share price happened around the 30th of January 2020 (Figure 7).
Figure 7: The share price chart for De Grey Mining Limited. (source: investing.com)
As we all know, the Hemi gold deposit has now become a monster, and the company De Grey Mining is now nearing the completion of a multi-billion takeover by Northern Star Resources Limited (ASX:NST).
Figure 8: The ASX announcement by De Grey Mining Limited on the 17th December 2019. (source: De Grey Mining Limited Announcements).
The initial release that gave hints of a major discovery attracted very little attention (Figure 8). However, for anyone who had some idea of drill results, picking up an intercept of 43m @ 3.7g/t and 25m @ 2.7 g/t is significant, especially as it is only at a depth of 36m and 32m respectively. Intercepts of that kind of length from an exploration point of view are a clear indication that there is something of substance. The lack of response compared to what Kalgoorlie Gold Mining was able to receive makes you think that, maybe the hot money is back.
The conclusion may be that the sentiment back then likely resembled the market sentiment of the past two years. Hence, the enthusiasm generated by this particular release from Kalgoorlie Mining Limited is certainly noteworthy as a positive indication that the market may have turned a significant corner.
1.20 Ausquest Limited (ASX: AQD)
The Ausquest Limited (ASX:AQD) experience is even more unique. A news release shows some promise in Peru and it sparked a share price jump (Figure 9), which was exciting even though it is not in the same magnitude as Kalgoorlie Gold Mining Limited. The share price running for a porphyry-style project is still good going.
Figure 9: The share price chart for Ausquest Limited on the 6th of February 2019. (source: Ausquest Limited Announcements).
The highest volume peak (green bars) in Figure 9 is 145M (I think they have just over 1.1B shares on issue) on that day of trading. The share price run was from approximately AUD $0.008 to a high of AUD $0.056. Ausquest Limited has a current market capitalisation of AUD $46.25M which I think, with the potential value-adding process to come, is a reasonable DYOR potential.
Looking at the drill interception, there is no doubt in my mind that this is a discovery. The question will be whether this will become an economic discovery (Figure 10).
Figure 10: The ASX announcement highlights from Ausquest Limited. (source: Ausquest Limited).
The decent length of interception of copper oxides (Hole CANRC008 had 304m from 34m and CANRC005 had 226m from 4m) is a good thing when they start talking about economics. It is always good to see if you can pay for going deeper; however, the other end is to see if the copper sulphides are worth chasing. What all this means is that there is still a lot of work to do, and porphyry systems are notorious for needing a lot of money and time.
For the reasons that I described above, seeing the amount of interest and excitement for a small-cap ASX explorer playing with porphyry in far-flung Peru is fantastic.
1.30 Leeuwin Limited (ASX: AQD)
The Leeuwin Metals Limited (ASX:LM1) story is now all about the Marda Gold Project. This is an interesting proposition, as after the excitement, the company only has a market capitalisation of AUD $8.15M (14th February 2025). At the time of the ASX announcement of the acquisition of the Marda Gold Project, the share price had a run from AUD $0.05 to a high of AUD $0.14 on the 20th of December 2024 (Figure 11).
Figure 11: The share price chart of Leeuwin Metals Limited. (source: Commsec)
Leeuwin Metals was a recent listing on the ASX on the 28th of March 2023 on the back of lithium projects in Canada. In the typical form for this sector, the transition from one flavour to the next is swift, and now Leeuwin is a gold player. This is why Leeuwin is also another form of confirmation that the sector is showing signs of life which has been pretty much missing in the last two years.
In a statement of confidence, the acquisition comes with an injection of AUD $3.25M to kick-start the new project. I know the project well, and if you look at the cost of the acquisition, you will get the idea that it is not a very prized asset. In saying that, there is enough interest for backers to chip in the money to participate in the gold run.
2.0 The New Beginning is 2025 - Post Transition Stage
The last twelve months have seen several companies reinventing themselves with new projects that are focusing on new commodities. With the demise of the lithium and clay rare earth space, several companies have had to make the change; otherwise, there would be no wealth creation for shareholders. Leeuwin Limited is one that has transitioned from lithium to gold now.
Another recent move was Trigg Minerals Limited (ASX:TMG) which moved from Potash to Antimony resulting in good growth for the new shareholders. The run in July 2024 has made a lot of shareholders happy, assuming they are the newer stock :-). Is this all for the present shareholders, one will know in time. Antimony is not an easy commodity to mine and has a lot of environmental issues, so picking your battles is critical.
Figure 12: The share price chart for Trigg Minerals Limited. (source: commsec)
OD6 Metals Limited (ASX:OD6) has now added a copper project situated in New South Wales. Will OD6 continue with their rare earth project will be interesting.
I feel that the last twelve months have been a transition period where companies have been finding their new space and doing the homework that is required to make value-adding statements in the future. Time will tell if the new projects will give them value, so 2025 will indeed be the time for action.
3.0 Samso Concluding Thoughts
As we move into the start of the real business period of 2025, the changing focus of companies and the changing focus of world commodities are creating a stage for the market players to start developing a platform to make money. These guys need this platform to "do their thing" and create wealth for clients and partners.
The changing love from lithium to gold is the main attraction, but the background grind of making commodities such as tungsten, antimony, iron ore, molybdenum, manganese, etc continues in the background.
Iron Ore is one that many have dismissed, but if you look at the fundamentals and the direction of the demand for iron ore, it is what they are now calling "Green Iron". There is no denying that gold is the happening place, but I think in regards to the "heating up" of the small end of the market, I think investors need to look at what is the real value-creating commodity and not what seems sexy for the moment.
Over the three decades of my time in this sector, the main attraction to having a gold production business remains. I have seen many other commodities try to sustain any means of growth, but I have yet to see that manifest in the mainstream. Iron ore popped its head out in the mid-2000s, but the majors remained and gained strength but the juniors fell away in quick time. There were two notable "iron ore juniors" in Australia, Mt Gibson Iron Limited (ASX:MGX) and Fenix Resources Limited (ASX:FEX) that have made a good name for themselves in the iron ore industry.
Mount Gibson has since fallen away in 2019, as you can see in Figure 13 below.
Figure 13: The share price chart for Mount Gibson Iron Limited. (source: Commsec).
Fenix Resources Limited has been a success story from its start around 2019. The small high-grade iron ore miner in the Murchison with a Mineral Resources of 6.6Mt at 65.1% Fe has been a real money printing business (Figure 14).
Figure 14: The share price chart for Fenix Resources Limited. (source: commsec)
The standout for me is Champion Iron Limited (ASX:CIA) which has gone from a "ballistic" run with magnetite in Canada (Figure 15). Champion Iron Limited is a real business that highlights what a production story can do for shareholder wealth.
Figure 15: The share price chart for Champion Iron Limited (source: commsec).
Champion Iron was taking off on its run coming out from the lows of 2015 and it was fortunate enough to ride the post-covid mineral resource bull run.
The three iron ore companies I used in my concluding comments is to illustrate that although timing may be important, but the combination of understanding the business of the commodity and timing is everything.
History is always repeating itself and anyone who has been investing in this small end of the ASX will agree. Whether we are talking about gold, iron ore, copper, lithium, etc., identifying a change in the climate of the market is everything and this is why I feel that the Year of the Snake may be that of the Year of the Golden Snake.
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