An investors guide to the 2023 Diggers & Dealers mining forum

Investors looking for small-cap mining companies with a bright future discover every year that the best place to find them is also the most difficult.

Australia’s remote gold, nickel and rare earth capital, Kalgoorlie in Western Australia, is where there will next week be a concentration of mining company managers at the annual Diggers and Dealers mining forum.

Always popular with the mining industry, but less so with bankers, brokers and private investors, there is nothing easy about Diggers (as it is called) with the historic mining city hard to get to, expensive, and with weather which can be startlingly cold at the end of winter.

But what’s created in Kalgoorlie is a hothouse atmosphere of ideas, some good, some ordinary and some truly dreadful – what might be called a Goldilocks event.

The key to ‘playing’ Diggers is to be selective

In fact, there’s no other way to approach an event which crams 66 official presentations into three days plus a smattering of unofficial site visits and talks on the side by companies unwilling to pay for a podium spot.

There are other mining conferences in more comfortable locations such as Queensland’s Gold Coast, Noosa, in NSW, and Melbourne, but none have the attraction of being in a mining city, where half the vehicles are Land Cruisers, and Hi-Vis safety gear is acceptable dress in every bar and restaurant.

Event location and audience accessibility

Countless suggestions over the past 20 years that Diggers should relocate to Perth have been rejected by the event owners despite there being limits imposed by the size of the auditorium and a shortage of accommodation.

If the event moved, it could easily double in size from its current 2700 delegates but it would leave a hole in the Kalgoorlie economy and forfeit its originality and ties to the mining industry.

So, for anyone unable (or unwilling) to make the trek it’s a case of following the conference by listening on an internet relay of speakers (log-on details to be posted on the conference website www.diggersndealers.com.au on Monday) or by checking our ASX announcements page for corporate presentations used in Kalgoorlie.

Long gone are the days when a mining company promoter could whisper tips in the ears of delegates, as they did when the event started in 1983 as a half-day conference at the Windsor Hotel in South Perth before moving to Kalgoorlie when acquired by a local accountant the late Geoff Stokes.

Officials from the ASX and the Australian Securities & Investments Commission (ASIC) in the crowd, at the tea urn, or lurking in the marquee where companies have promotional booths make sure that the rules of an informed market are adhered to.

But the impossibility of fully following Diggers quickly becomes clear on the first morning with a 9am welcome followed by a talk from British academic and economics broadcaster, Linda Yueh, who chose as her last publication the interesting topic of “Great Crashes and How to Prevent Them”. Should be sobering for the Monday morning crowd.

Pilbara Minerals to kick off the show

The real business of the conference gets underway with a presentation by the red-hot lithium favourite, Pilbara Minerals (ASX: PLS) which this week announced a final investment decision on a mid-stream lithium demonstration plant at its Pilgangoora project in WA’s Pilbara.

What investors want to hear from Pilbara managing director Dale Henderson is whether strong shipments of spodumene (processed lithium ore) are offsetting weaker lithium prices.

Some brokers, such as Macquarie, are enthusiasts, forecasting a price rise for Pilbara from $4.88 to $7.30. Morgan Stanley is less confident, tipping a price fall to $4.15.

That difference of opinion between Macquarie and Morgan Stanley is a good example of the uncertainty in the market today as the interest rate cycle shows signs of peaking and China shows signs of slowing, an interesting mix of good and bad news.

After Pilbara, the Diggers conference slips into a routine, but it’s a tough one for anyone trying to follow the event with speakers given 15-or-20 minutes podium time with a one-hour break for lunch and half-an-hour for afternoon tea.

By the end of day one a diligent delegate will have been expected to absorb messages from 20 speakers which is why a smart investor picks a handful of targets and comes back to those missed at another time. It will all be on the Diggers website including a replay of recorded presentations.

Day 1

My top five for day one are: lithium major Pilbara Minerals at 10:30am. Boss Energy (ASX: BOE), a fast-emerging uranium producer at 1:10pm.

Chalice Mining (ASX: CHN), an emerging nickel and palladium producer at 1:25pm. Liontown Resources (ASX: LTR), an emerging lithium producer at 4:05pm and Centaurus Metals (ASX: CTM), an emerging nickel producer at 4:25pm.

Day 2

Day two starts early with Lynas Rare Earths (ASX: LYC), Australia’s globally significant rare earth producer first up at 8:30am with chief executive Amanda Lacaze at the podium.

Other companies worth watching on the second day are struggling lithium producer, Core Lithium (ASX: CXO) at 9.10am. Patriot Battery Metals (ASX: PMT), a Canadian lithium success story at 11:05am.

Delta Lithium (ASX: DLI) at 1:40pm. Emerging rare earth and zirconia miner Australian Strategic Materials (ASX: ASM) at 2:10pm, and uranium producer Paladin Energy (ASX: PDN) at 3:10pm.

Day 3

Day three is more of the same though as anyone who has attended the full three days at earlier Diggers conferences knows the crowd will have thinned out as the evening entertainment takes its toll.

Evolution Mining (ASX: EVN) is first cab off the rank on the final day led by seasoned Diggers regular Jake Klein at 8:30am, followed in quick succession by Genesis Minerals (ASX: GMD) at 8:50am and De Grey Mining (ASX: DEG) at 9:05am. Ardea, which tops the resurgent laterite nickel hopefuls is scheduled to present at 11:45am while IGO (ASX: IGO) at 1:15pm and OreCorp (ASX: ORR) at 2:05pm round out the day for investors.

A final speaker of interest at 2:55pm on Wednesday is Luca Giacovazzi, chief executive of one of Andrew Forrest’s nickel companies, Wyloo Metals, but since Forrest owns all the shares in Wyloo the only interest is in comments about the outlook for battery metals.

Gold companies, as always, are well represented at Diggers, as are lithium and rare earth stocks, while missing in action is the iron ore sector a once prominent participant but notably absent this year, almost certainly a comment on the easing outlook for Chinese steel demand.

It might be hard to get there and Kalgoorlie itself is an acquired taste, but there is no doubt that Diggers is a pure Australian mining event in a very Australian setting. Love it or hate it.