for me personally the gold was a nice to have and helped to underwrite the REE potential...but following shit kicking off in the middle east (what else is new?), it adds a huge premium to the value prop and massively derisks the project imo. Was looking into index performance and sector correlations during war and conflicts over the weekend..
Whenever a major global conflict kicks off, we usually see sharp declines across the market indices, but significant outperformance by certain sectors ie gold, especially in the US markets
During a severe conflict indices like the s&p are typically down up to 20-30% in the early stages of conflict, but bounce back pretty quickly.
ASX usually declines at a similar pace, but has a much slower recovery.
US gold miners like newmont spiked up 30–100% over 12–24 months following 9/11 and Iraq invasion.
ASX miners like Newcrest, up 10–30% over the same period, much slower and smaller gains due to lower liquidity and delayed institutional inflows, much smaller capital market participant base
US REE plays (mostly just MP) up 15–40% within months of the Ruski Ukraine invasion
ASX REE (Lynas) up 5–15% over the same period
DTR’s dual exposure to both gold and REEs during conflict, imo, could potentially attract even more liquidity as the overall markets take a beating and investors flock to safe haven of gold + federal government funded critical resources for military application
However as I keep saying, as long as DTR is restricted to the ASX, its going to lag the US, responding more slowly and gaining less sharply.
The longer it takes for DTR to secure DTC eligibility and access the US retail market, the more it risks missing out on the stronger inflows and higher valuations that occur in times of global conflict.
until then, while I really hope I am proven as wrong as can be, I can't see any strong upward momentum on the ASX to combat the free fall, as on our market it's still just an unproven explorer phase stock (though we all know that it is probably the single best Australian play right now)
Imo dyor
(20min delay)