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Locksley Resources (ASX:LKY) has announced its maiden production of antimony concentrate in the United States, which one may have reasonably expected to cause a green day for the stock. And that was the case in early trades – but as arvo trades kick off, the stock is down -3% to 46cps. What happened?
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The intraday chart reflects a potential explanation not too unusual for high-risk exploration juniors, and that’s a simple case of profit taking. After all, the point of investing is making money, and ideally, one withdraws it before somebody else has the same idea.
So that’s not much to worry about, and the fact that Locksley is now on its way to producing an antimony ingot will likely be further proof of concept, or at least, proof of the company’s capacity to produce a final metal product in high demand for use in myriad industries, but particularly defence.
And for those unlikely few who might be uninformed, antimony is a metal the U.S. can’t get its hands on so easily anymore since China has banned exports of the stuff, kicking off the great antimony hype cycle of our current era.
(That’s actually because China’s antimony reserves have been declining in recent decades, but don’t let that get in the way of a good, compelling geopolitical catalyst narrative.)
So, look: volatile juniors, an ASX warming back up and attracting swing traders back to volatile stocks, a fairly volatile narrative combining post-COVID supply chain efforts and what is ultimately fears of a Chinese-American war, and a volatile American government currently gung-ho on domestic manufacturing and mining.
It makes sense that the company’s share price would rise and fall on the tides of emotion more than fundamentals.
Of course, its peer, Larvotto, which one could call the first ‘real’ winner of the antimony thematic last year, remains higher valued at 80cps despite being in similarly early stages when compared to Locksley. (And Larvotto isn’t even in the U.S., it’s in Australia.)
A sign of patriotic enthusiasm, perhaps. Or in explaining why Locksley has faded red intraday, it could be that investors aren’t entirely convinced by Locksley’s concentrate grades under 70% in these early stages of first output. At any rate, the stock is sure to remain on radars.
LKY last traded at 46cps.
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