E-waste recycling darling MTM Critical Metals (ASX:MTM) climbed a further +13% on Wednesday, rising to 65cps and locking in 1Y returns of +1,869%.
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That, to be sure, is the stuff HotCopper users live and die for. (There were no disclosures to market on Wednesday, but that’s beside the point.)
Ever since the company declared it could recover gold at grades of over 500g/t from e-waste, the company’s been on a tear. Those results came from gold extracted from “e-waste char,” think plastic motherboards and other computer parts, which were first treated to remove plastics.
And that’s a good thing for shareholders, it’s a good thing for MTM, and it’s a great thing for the development of an e-waste circular economy, which in turn, means great things for the world in general from an ESG point of view.
What’s driving momentum?
On Tuesday, the company declared it had inked an MOU with another ASX-listed player, Meteoric Resources (ASX:MEI), after MTM refined the latter’s Mixed Rare Earth Carbonate (MREC) feedstock in a way that recovered high-value magnetic elements, according to MTM’s Tuesday disclosure.
While the company has been an e-waste player focused on gold, this Rare Earth Element (REE) thematic has come out of nowhere.
But still, if the company can produce REEs from e-waste, even better: REEs are popular among the list(s) of critical minerals both Australia and our counterparts are keen to secure domestic supplies of.
Especially given that China more or less controls the world REE supply, and a lot of nations are trying to decouple from China. Whether or not that remains a real economic possibility, to completely decouple, remains to be seen – but any domestic supply is better than nothing.
And so MTM Critical Metals continues to rise.
Short-sellers quiet for now
For a company that’s clocked over +1,800% returns YoY, it’s perhaps interesting that what publicly available short selling data is available shows shorts aren’t creeping up on MTM.
Shorts on MTM as of 3.30pm AEST (ShortMan)
If the company was making big profits, that would explain why shorters aren’t paying attention – but it’s not.
To be fair, it’s not like we’ve seen the market cap far run beyond fundamental earnings in the same way the market saw with Droneshield last year (on the way back up), and before Droneshield, some readers may recall the same thing happened with controversy-haunted Booktopia.
But fundamental questions remain around MTM’s original catalyst: that it can produce gold at grades over 500g/t.
The big question, in my mind, which I’ve discussed on the HotCopper Wire podcast before, is exactly where it sourced the e-char that led to those grades, and, how much material it would need to produce, say, a tonne of gold.
(Let alone an ounce.)
Investors not worried
For now, that remains more or less unclear, but that uncertainty hasn’t scared off investors. On Wednesday, as at 3.30pm AEST, 9.64 million shares in MTM had traded hands for total turnover liquidity of $6.28 million – higher than the four-week average share turnover of 6.49M shares per day.
What does that tell us? The stock remains hot with day traders, as well as retail. And that’s a good thing.
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But with the stock price running this hard and fundamental questions around how much e-char feedstock the company can get its hands on, this finance journalist feels compelled to put the idea out there: eventually, short sellers will take note.
For now, though, it’s a good news day.
MTM last traded at 65cps.
Jonathon Davidson
The Market Online, Australia
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