The week kicked off exactly the way nobody wanted.
AI videos of the US blowing up Iran's Kharg Island littered President Trump’s social media, welcoming pundits to a mad market on Monday.
The orange leader of the free world was doing his best to unhinge traders, as they immediately did what traders do best — panic about oil. Brent crude flew to as high as US$97.5 a barrel, up over 8 per cent on the week, as attacks were renewed.
As if a near triple-digit oil price wasn’t enough, newly appointed Federal Reserve chair Kevin Warsh used the annual Jackson Hole gathering to remind markets that inflation remains public enemy number one. His hawkish commentary did little to dampen expectations of a September rate hike and as oil moved higher, the teetering bond yields followed.
The bigger concern in bonds, however, may be lurking beneath the surface.
Financial markets are increasingly being asked to digest two borrowing binges simultaneously. Washington continues to issue debt like there's no tomorrow, while the AI arms race has triggered an unprecedented wave of corporate borrowing.
More than US$1 trillion (A$1.4 trillion) of corporate debt has now been issued to hyperscalers such as Google, Amazon and Meta as they race to build out infrastructure, a number that, remarkably, is double what it was at just the start of this year!
For the first time in years, corporate debt is beginning to compete directly with government bonds for investor capital. The UK's bond market is already showing signs of strain, trading at its weakest levels since the GFC, while long-dated US Treasury yields continue creeping higher despite increasingly desperate efforts to keep them under control.
Last week's decision by Treasury Secretary Scott Bessent to double buybacks of long-term government bonds looked suspiciously like an acknowledgement that the debt market is hovering just above the abyss. Yet even that intervention has failed to stop yields from climbing. Markets are now asking a far more uncomfortable question: if doubling bond purchases doesn't work, what comes next?
Simultaneously, gold tumbled at the start of the week, dropping from above US$4600 (A$6400) an ounce to below US$4300 (A$5965) by Wednesday as traders braced for higher rates and stickier inflation. Then, on Friday, another Fed member, Governor Christopher Waller, poured cold water on expectations of an imminent rate hike, effectively telling markets they were good to go. The knee-jerk traders completely reversed course – of course – sending markets and gold surging, with the yellow metal charging back above US$4520 (A$6210) an ounce, to cap off an intraweek swing of almost 11 per cent.
Resources once again dominated Bulls N’ Bears Runners of the Week list, as a newly listed copper explorer wasted no time announcing its arrival, striking it rich in elephant country. Meanwhile, AI uncertainty, central bank jitters and mounting debt fears sent investors scrambling for the safety of something more valuable in the ground.
KAOKO METALS LTD (ASX: KAO)
Up 249% (75c – $2.62)
The Bulls N' Bears Runner of the Week is newly listed Namibian explorer Kaoko Metals, which jumped out of the ASX gates in breathtaking fashion after its maiden drilling program hit paydirt in elephant country.
The company struck two spectacular intersections of visible copper mineralisation from its previously undrilled Otniel target at the Chalkos copper-silver project. The first hole returned a staggering 60.25 metres of visible copper mineralisation, while a second hole hit a 51.83-metre zone containing a grab-bag of high-value copper minerals, including chalcocite, cuprite, malachite, dioptase, chalcopyrite and native copper.
The core photos were absolutely stunning and were all the market needed to see. Kaoko’s share price, which had already performed strongly since its 20c debut and closed last week at 75c, literally exploded. The stock rocketed to a high of $2.62 on Thursday, a 249 per cent gain for the week, before the company wisely moved to fill its coffers with a well-timed capital raise on Friday to the tune of $15 million at $2.20 a share.
Kaoko says that within the broader mineralised zones of its stunning hits, the strongest logged interval comprised a hefty 32.36m of intense visible copper from just 59.3m downhole, while the second hole contained a strongly mineralised 17.2-metre section from 58.37m.
Kaoko has already begun sampling and processing the core, with laboratory assays expected in four to six weeks to confirm just how rich these zones are. Meanwhile, management is wasting no time on a third diamond hole, already in progress, to test for continuity of its discovery along strike.
Two more holes are planned to test extensions to the west and south before the rig is mobilised to the high-priority Donkey Hill target to test high-grade outcropping mineralisation.
Kaoko is now the latest darling in a hot Namibian copper exploration scene, a group that includes fellow explorer Midas Minerals, which is up nearly 300 per cent in the past year and sports a market valuation of around $330 million. After this week’s discovery, Kaoko could be well on its way to joining the club.
VANADIUM RESOURCES LTD (ASX: VR8)
Up 150% (1.4c – 3.5c)
Snagging silver on the week was another African hopeful, Vanadium Resources, which ripped 150 per cent higher after a major de-risking event for its world-class project in South Africa.
The company locked in first-refusal rights this week over its preferred brownfield site for the planned V-Iron Plant, a key piece of infrastructure needed for its high-grade vanadium slag operations at the Steelpoortdrift project.
Steelpoortdrift is one of the world's largest and highest-grade undeveloped vanadium deposits, positioned in the fabled Bushveld Complex of Limpopo province. A huge part of its attraction is that much of the boring-but-expensive infrastructure needed for a major mining operation – power, water, gas and transport – is already in place.
Securing the site allows Vanadium Resources to push ahead with its V-Iron scoping study, due by the end of September, as it looks to produce both vanadium-bearing slag and pig iron.
This is all part of a clever two-pronged strategy. Last year, the company executed a binding two-year offtake agreement with China Precious Asia for the supply of vanadium-rich magnetite direct shipping ore (DSO). The deal covers average production of 100,000 tonnes per month, potentially totalling 2.4 million tonnes over the term, and is designed to generate early cash flow. First shipments are targeted for late 2025.
This near-term production pathway is expected to help fund the longer-term development of the V-Iron plant, which will capture greater value from the ore. The scale of the prize is immense. Steelpoortdrift hosts a JORC resource of 680 million tonnes at 0.70 per cent vanadium pentoxide, making it one of the biggest undeveloped vanadium resources outside China and Russia. With a clear path to both early cash flow and a large-scale, value-added operation, the market is clearly waking up to the potential.
PICHE RESOURCES (ASX: PR2)
Up 80% (3.9c – 7c)
Rounding out our runners was a little-known Argentinian exploration story that made a very well-timed, big-time appointment to its board, sending its shares up 80 per cent this week and up more than 200 per cent in a fortnight.
The WA and South American-based junior Piche Resources announced it had appointed experienced resource executive Gerard O'Donovan as a non-executive director. If that name sounds familiar, it should. Mr O’Donovan is the managing director and CEO of this week’s first-place getter Kaoko Metals.
The market loves a winner and appointing the head of the week’s hottest stock is about as strong a signal as you can send. O’Donovan also has a track record as a former executive director of Sun Silver - worth $200 million in today's market - and non-executive chair of the $100-million-valued Black Bear Minerals.
Prior to O'Donovan's appointment, the company completed a $2.5 million entitlement offer, with several savvy insiders topping up their holdings. Non-executive director Stanley Macdonald, a man with something of a golden touch, increased his stake to a substantial 6.4 per cent. His resource-sector wins include Giralia Resources – bought by Atlas Iron, which was later swallowed by Gina Rinehart’s Hancock Prospecting – along with material shareholdings in Northern Star Resources and Redhill Iron.
When a director with that kind of record buys stock, it pays to take notice.
Piche says newly filled coffers will focus on the ground at its Argentinian projects, including the company's recently drilled Cerro Chacon gold-silver project in the county's Chubut Province.
Management says Cerro Chacon hosts a low-sulphidation epithermal vein system defined across a whopping 14km of mineralised structural corridor with geological and geophysical signatures similar to those of major producing mines in the region, such as Newmont’s Cerro Negro and AngloGold Ashanti’s Cerro Vanguardia.
With a proven mine-finder joining the board, serious insider backing and prospective ground in a world-class jurisdiction, Piche Resources might just be the next one to cash in on drill-bit success.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Andrew Todd
