Friday, 10 March 2023

CLOSING BELL: Corruption? In Africa? Over mining licences? That can’t be right, surely…

by Berkeley Lovelace

  • ASX 200 adds just 0.1% because it was literally the least it could do.
  • Aussie tech stock surge negated by Doctors and Miners having a bad hair day.
  • Two ASX-listed lithium players are under attack over alleged corruption in Africa, of all places.


Aussie markets started the day flat, did a few things and then pulled the pin on it all very promptly at 4:00pm, leaving the benchmark up just 0.11% today.

I don’t think it was because of a lack of interest, because there’s been plenty happening around the place – of particular note was a thunderous rise by our Tech sector, which towered over the rest of the market with a 2.82% gain.

Says a lot about the relative size of some sectors, though, when that cracking result can be offset by Health Care falling 1.39% and Materials dropping 0.80%.



Arguably the most interesting story of the day is coming to use through a couple of the ASX’s lithium middleweight division, after both Atlantic Lithium (ASX:A11) and Piedmont (ASX:PLL) raced into trading halt boltholes in the wake of serious allegations from a US-based short seller.

Blue Orca Capital has very publicly alleged that Atlantic Lithium has been involved in high-level corruption during the acquisition of its mining licences in Ghana.

“Our investigation of source documents and Ghana corporate records indicates that Atlantic obtained key Ghana mining licences by making secret payments and promises of payment to the immediate family of a high-level Ghana politician,” Blue Orca said in its report.

“In our opinion, evidence of Atlantic’s payments to the son of a high-level politician for mining licences is textbook evidence of corruption.

“We are short Piedmont because without Atlantic’s Ghana supply, Piedmont and any promise of near-term revenue from its much-hyped Tennessee facility are dead on arrival.”

As Stockhead’s very own Josh Chiat summarised earlier, “Blue Orca claims the Ewoyaa lithium project in Ghana, where Piedmont expects to be receiving spodumene concentrate for a Tennessee lithium plant from 2025, is unlikely to ratified.

“It claims ‘tens of millions’ of dollars (actually $730,000 plus a future production royalty) were paid to a company owned by the son of a prominent Ghanaian Asiedu Nketiah, known colloquially as General Mosquito, during the acquisition of the mine.”

Neither Piedmont nor Atlantic have issued a statement to the ASX at the time of writing, but the allegations have fairly wide-ranging implications, thanks to the web of lithium players that make up that slice of the market.

Just as Piedmont appears that it might be collateral damage, that may well knock on to Sayona Mining (ASX:SYA), a Piedmont is a part owner and offtaker of Sayone’s North American Lithium project in Quebec, Canada, which produced first concentrate this week.

Meanwhile, (I’m sorry, but I have to…) it’s time to talk interest rates for the billionth time this week, because it looks like today it was NAB’s turn to be “the first of the Big Four” to raise interest rates in the wake of the RBA adding more basis point bastardry to official interest rates.

NAB, in its defence, waited almost a whole two days before bumping its rates, and it was mere moments later that the rest of the banks started doing the same, because being on trend is very important in today’s crowded banking market.

And lastly, as I so brilliantly predicted this morning (ha!), Xero (ASX:XRO) has announced that it’s plans for streamlining its business to make it more efficient will involve shedding 800 jobs – 16% of its current headcount – and then making everyone who’s left work harder while they’re still feeling “lucky” that they still have a job.

Xero is 9.11% on the news, because there are times when we are worse than the Romans.



Here are the best performing ASX small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:


The standout winner in Small Caps today is Prescient Therapeutics (ASX:PTX), flying up the charts with a well-deserved  23.7% gain following news that the US FDA has granted the company’s PTX-100 drug for the treatment of all T-cell lymphomas (TCL), including cutaneous TCL (CTCL) additional Orphan Drug Designation (ODD).

It’s all very complicated, and you can read more about it here, but in a nutshell, the decision means PTX has guaranteed market exclusivity for this treatment for 7 years, which is – obviously – huge news.

Vonex (ASX:VN8) recovered 23.8%, after a tragic decline in the wake of an earnings report in late February.

The only fresh news from Vonex since then is news that company director Jason Gomersall acquired 4.25 million more shares in VN8 three days ago.

Exquisite timing. #Chef’sKiss #Mwah

Solstice Minerals (ASX:SLS) has come bolting outta nowhere this afternoon to near the top of the charts, stacking on 22.6% after initial assay results from diamond drilling at its GSP prospect revealed that the company’s sitting on a big ol’ pile of nickel.

The pick of the results is a standout intercept of 1.81m @ 23.1% Ni from 101.85m, which CEO and managing director Nick Castlede says is “the highest-grade intercept ever returned from the Ringlock Project”, which “validates the GSP prospect as a ‘live’ high-tenor nickel sulphide system”.

The GSP prospect is located within the Ringlock Dam nickel project area approximately 65km north of Kalgoorlie in Western Australia.

There’s a whole big bunch of penny stocks being very “Penny Stock”, acting like they’re in the pit at a post-punk music festival by moving around violently for no apparent reason on sweet FA volume.

But, truth be told, that goes on just about every day of the week, and in most cases – just like at a post-punk music festival – there is neither rhyme nor reason for it happening at all.

Case in point: TTA Holdings (ASX:TTA) – distributor of TEAC branded audio and visual consumer electronics – is up 21% today, which looks like it should be news.

However, there’s no news at all about the company anywhere today, nothing from them to the ASX since 31 January, and the day’s total trading volume – all $850 worth – wouldn’t be enough to cover the cost of one of the 65-inch TVs it sells.

But worth a mention is Sequoia Financial (ASX:SEQ), which was up 14% at lunch time today on news that it’s jettisoned 80% of its equity interest in Morrison Securities.

However, like a week old birthday balloon, those gains slowly deflated over the course of the day, leaving SEQ on a still nice but still a bit sad 5.4% despite the sale leaving Sequoia with a debt free balance sheet with net working capital of $10.5m.



Here are the least best performing ASX small cap stocks:

Swipe or scroll to reveal full table. Click headings to sort:



In brief news, Los Cerros (ASX:LCL) has kicked off drilling at its Kusi high grade gold-copper prospect, part of its 100% owned Ono Project in Papua New Guinea.

The ~3,000m drilling program of ~18 holes will focus on priority drilling areas identified during previous exploration, which has already turned out exciting intercepts of 35m @ 3.04g/t Au from 136m, 20m @ 2.89g/t Au from 107m and 10.1m @ 2.39g/t Au from 0m.

Field work assessing the potential for extensions to the upper limestone skarn and new skarn units will continue alongside the drilling program to try to better define the potentially significantly larger mineralised regional skarn unit (or units) that Los Cerros is currently camped on top of.

And lastly, Story-i (ASX:SRY) has announced that it is pleased to have been handed a report from independent accounting firm Hall Chadwick, which was called in to go through the company with a fine tooth comb after SRY was sin-binned by the ASX in October.

I’ve gotta say, I don’t know why the company would be “pleased” at all, because the final report from Hall Chadwick makes for some pretty damning reading.

The announcement from SRY is kinda long, and I am very short on time this afternoon – but the highlights include:

  • “The lack of a proper risk management plan and risk strategy left the Board in the situation where required regulatory compliance matters were overlooked or not attended to.”
  • “Ongoing breaches of regulatory compliance matters were ‘not been actioned’ [sic] or formal legal advice was not sought.”
  • “The board did not have proper systems in place to track or note changes in interests of the directors of the Company.”
  • “The Board did not have any practices, processes or systems (including, but not limited to checklists) for considering significant acquisitions, contracts or transactions”
  • “Ongoing breaches of regulatory compliance matters were not been actioned or formal legal advice was not sought.”

I haven’t seen a report card that bad since I got my hands on my file from HR.

Anyhoo… the list of recommendations on how to get Story-i back up to code is more than 4.5 pages long, but the company says that it’s already taken steps outlined in a preliminary report received earlier.

To whit, the board has “adopted an updated Continuous Disclosure Policy”, so they’ve got that going for them, which is nice.



Azure Minerals (ASX:AZS) – Corporate investment in Azure is being finalised.

Exopharm (ASX:EX1) – Capital raising.

Castle Minerals (ASX:CDT) – Capital raising.

Bluglass (ASX:BLG) – Capital raising.

Titanium Sands (ASX:TSL) – Resource update from the Mannar Island project.

Atlantic Lithium (ASX:A11) – A11 is preparing a response to an online report alleging corruption at its lithium play in Ghana.

Piedmont Lithium (ASX:PLL) – Piedmont’s taking damage from the Atlantic Lithium allegations and is prepping a statement of its own.


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