Far East Capital Newsletter
WA Kaolin - commissioned and ramping up production
1 Jul 2023

In This Issue

WA Kaolin - commissioned and ramping up production

I suppose it would be reasonable to ask why so many mining stocks have fallen by so much over the last six months. After all, what has changed? You can look to the weakness in various LME tradable metals and subdued industrial activities that require these metals. You can look to lithium, rare earth and other alternative energy input commodities that have fallen in price. You can look to rising interest rates that have contributed to all of the above, as well as the suppressing effect on consumer demand and the need to divert funds away from the stock market and into higher mortgage repayments. Then we have the surging cost of domestic electricity.

All of these factors have a compounding effect on negative sentiment and it is sentiment that is the essential driver of markets in one direction or another. Some people think it is news flow, but that is only partially responsible, on a stock specific basis. The majority of stock market players don’t have the ability, or access to reliable information, to make a fully informed decision. So this is where the emotional side of investing takes over. That is where sentiment and the trends are more influential. You shouldn't try to overthink what the market is doing. Certainly, we shouldn't be trying to apportion blame for share price weaknesses right now when the sentiment is so poor.

Continuing with the discussion of kaolin stocks that we introduced last week, we provide an update on the progress of WA Kaolin as it seeks to establish a long-life mine at its Wickepin Project, located 220 km SE of Perth. It is well down the path already, hoping to lift the production rate in the forthcoming December Half to achieve profitability for the first time. 

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