"That was the week that was... in Australia"

[drillinto]

April 15, 2007

That Was The Week That Was … In Australia
By Our Man In Oz

Minews. Good morning Australia, uranium again?

Oz. It really has become the only game in town, and is likely to stay that way for another two weeks as politics moves to centre stage in the Australian uranium market. Everyone here is fascinated by what is likely to emerge from the national conference of the Australian Labor Party which kicks off in Sydney on Friday, April 27, and runs over that weekend. The anti-nuclear lobby is praying that the party retain its opposition to new uranium mines. Investors are placing big bets that the ban will be lifted, clearing the way for the wholesale development of a series of new mines.

Minews. And while you play politics the uranium prices rockets up.

Oz. Fabulous, isn’t it. A couple of years ago you could hardly give the stuff away. Now its over the US$100 a pound mark, and widely expected to go much higher because the cost of uranium fuel to a nuclear power station is really in the “can of beans” category when measured against the overall capital cost and the critical need to maintain a flow of fuel.

Minews. Enough of the philosophy, time for some prices.

Oz. Right. Well last week really was a uranium glutton’s smorgasbord. A raft of stocks hit new 12-month highs, including Curnamona Energy (CUY) which jumped A87 cents (47 per cent) to A$2.73 after receiving approval to conduct trials on its Oban uranium project in South Australia. The stock eased back to A$2.69 at the close on Friday but that price is still five-times higher than a year ago. Havilah Resources (HAV), which owns 51 per cent of Curnamona chimed in with a A47 cent (22 per cent) rise to A$2.59, down A1 cent on the 12-month high of A$2.60 reached in early Friday trade. Across the uranium sector there were wholesale price rises, including Omegacorp (OMC) which jumped A23.5 cents (19.7 per cent) to A$1.43 after receiving a counter takeover bid to that proposed late last year by Canada’s Denison Mines.

Minews. Yes, interesting that fresh move on Omegacorp. We might take a closer look. Before we do that, more prices please?

Oz. Continuing with the uranium crowd, we saw a new listing in Crossland Uranium (CUX) deliver spectacular profits for the stags who were quick enough to sell the A25 cent shares taken up in the float at Friday’s listing high of A72.5 cents, a “modest” return of A47.5 cents, or 190 per cent on their original investment. The stock closed its first day at A61 cents, for a gain of A36 cents (144 per cent). Takeover target Summit Resources (SMM) stormed ahead thanks to the entry of French nuclear giant Areva on its share register. Summit closed the week at A$5.97, a gain of A82 cents (16 per cent), but did get as high as A$6.50 on Wednesday. Paladin Resources (PDN) which looks like it will struggle to complete its bid for Summit was probably the only uranium stock to lose ground on the day, slipping a fractional A17 cents (1.6 per cent) to A$10.03.

Minews. Let’s look a bit wider, how did your base metal sector perform?

Oz. Solid, but subdued when compared with uranium. The rising value of the Australian dollar weighed heavily on the sector with a number of brokers suggesting that at US83 cents to the A$1 (the highest in 17 years) we could see up to 5 per cent shaved off profits this year. The nickel favourite, Jubilee Mines (JBM) eased back A54 cents (3 per cent) to A$17.38, while other nickel stocks posted modest gains. Minara (MRE) rose A8 cents (1 per cent) to A$8.20, Western Areas (WSA) was up A18 cents (3.5 per cent) to A$5.25 and Mincor (MCR) rose A20 cents (6.2 per cent) to A$3.41, but that price was down a little on peak Friday price of A$3.50, which was a 12-month high for the stock. Zinc stocks were also weaker on Friday on dollar fears, but generally finished up marginally over the week.

Minews. Time for quick look at the gold sector, or was it too hit by the dollar?

Oz. It should have been clobbered, but some reason most of the gold stocks managed small gains. The stand-out winner of the week was Kingsgate (KCN) which report clearance of environmental hurdles to a big mine expansion in Thailand. It rose A84 cents (17.5 per cent) to A$5.64, but did get as high as A$5.90 in early Friday trade, it’s best price in almost 12-months. Most other moves were around the A1 cent mark. In fact a whole series of gold stocks posted that minimal rise, including St Barbara (SBM), up A1 cent to A56 cents, Goldstar (GDR) by the same amount to A57 cents, Allied Gold (ALD) to A38 cents, and Bendigo (BDG) which could manage only half-a-cent to A38 cents.

Minews. But, you say those rises were in the face of a tough gold market?

Oz. Absolutely. Look at the dollar effect. While the gold price in U.S. dollars rose in London last week from US$673.50 an ounce to US$681.75/oz the Australian dollar gold price actually fell from A$824/oz to A$818 thanks to our dollar rising over the week from US81.67 cents to US83.24 cents.

Minews. Thanks Oz. It seems the profit flows from the resources boom have finally caught up with your currency, but the producers will still be making a lot of money and , hopefully, paying dividends.


Source: www.minesite.com

 

[drillinto]

April 22, 2007

That Was The Week That Was … In Australia

By Our Man In Oz

Minews. Good morning Australia, how did your market perform last week?



Oz. Mixed, is the one-word answer. Uranium stocks remained on the boil, and we had a number of notable revivals among stocks we haven’t heard from in some time, but overall the tone could be best described as flat.

Minews. Presumably the rising value of your dollar continues to weigh on miners?

Oz. Definitely. And while we can pick out examples of stocks that shrugged off dollar fears to post 12-month share price highs the key measure of our market, the metals and mining index on the Australian Stock Exchange, managed a truly modest rise of just 2.4 points, rising from 4004.8 to 4007.2 – about as flat as you can get. The good news from the index is that Friday was easily the best day with a 23.8 point gain on that day wiping out mid-week losses.

Minews. Enough of the index nonsense, how about some prices?

Oz. Precious Metals Australia (PMA) was one of the big stories of the week, broken as we all know on Minesite with a timely report on the arrival of Michael Kiernan as the new boss of the born-again vanadium producer. That news was well received on the market with the stock jumping by A25 cents (15 per cent) over the week, including a A16 cent gain on Friday alone to end at $1.91.

Rusina (RML) was another sometimes troubled company in revival mode as it makes headway with at Acoje nickel project in the Philippines. It stormed ahead by A12.5 cents (47 per cent) to A39 cents, but traded as high as A45 cents on Friday. Most flattering of all for a company which has had a difficult couple of years is that Rusina copped a speeding fine (price rise query) from the regulators.

Andean Resources (AND) which remains a possible takeover target for Kingsgate Consolidated (KCN) hit a 12-month high of A62 cents after reporting fresh drilling results from its Cerro Negro project in Argentina, only to close at A53 cents for a gain over the week of A3 cents (6 per cent). Tawana Resources (TAW) was another in the “good news at last” category, winning mining rights to its Kareevlei Wes diamond project in South Africa and rising by A4 cents (28.6 per cent) to A18 cents on Friday.

Minews. A mixed bag there of vanadium, nickel, gold and diamond stocks. Was there a theme to the week?

Oz. Not really. We were all over the shop. The uranium sector continued to attract most attention from speculators as we head into the Labor Party national conference next weekend when its controversial three mines policy is expected to be dropped. Market leader, Paladin Resources (PDN) ran into some heavy selling after announcing that a deal had been concluded to acquire Summit Resources (SMM). Paladin dropped A$1.14 (10.7 per cent) to A$9.49, and Summit fell A35 cents (5.8 per cent) to A$5.62.

Minews. Keep an eye on that situation, there might be more action ahead.

Oz. Yes, it doesn’t yet seem to be a done deal, and Paladin might hit more heavy weather if it continues with its ‘expand at all costs’ strategy. No sooner had it reached an agreement with Summit than it announced the purchase of a bigger stake in Deep Yellow, a company with which it already has close ties and is now sitting on a stake of 11.8 per cent.

Minews. How did your base metals and gold sectors perform?

Oz. Nickel stocks continued to trade well. Mirabela Nickel (MBN) which is developing a mine in Brazil, hit a 12-month high of A$6.03 on Tuesday before easing back to end the week at A$5.86, up A16 cents (2.8 per cent). Mincor (MCR) also reached a new high of A$3.60 early in the week before easing back to close at A$3.44, up just A3 cents, and Western Areas repeated the trick on Friday when it hit A$5.50 before slipping to close at A$5.45, up A8 cents. Sally Malay (SMY) reported good news from recent drilling at its Lanfranchi project, and added A33 cents (7 per cent) to A$4.97, but did get as high as A$5.40 on Thursday, and fell rather sharply on Friday.

Gold stocks were generally higher, but the best of the week’s metal price rise on Friday came after we had closed. The London price of US$691.40 is the highest this year and should flow into our gold shares on Monday, assuming the dollar doesn’t rise any further. Among the local gold stocks, St Barbara (SBM) was one of the best with a gain of A$4 cents (7 per cent) to A62 cents, Centamin (CNT) gained A2 cents to A99 cents, and Mundo Minerals (MUN), which announced the go-ahead for a mine in Brazil traded up to a 12-month high of A48 cents on Wednesday before easing back to A43.5 cents, which was still a gain of A7 cents (19 per cent) for the week.

Minews. Thanks Oz.
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www.minesite.com

 

[constable]

Handy thread drill , thankyou for taking the time to post!

 

[drillinto]

April 29, 2007

That Was The Week That Was … In Australia
==> www.minesite.com/aus.html

By Our Man In Oz

Minews. Good morning Australia, how was your week?

Oz. Similar to when we last spoke. A little directionless, with the odd flash of good and bad news. The high value of the Australian dollar continues to act as a dead weight on some of the better-known producers. At US82.5 cents it remains close to a 17 year high, and that means revenue numbers from metal sales will be hurt this year. Uranium stocks, which have kept speculators busy for the past few months, lost some of their momentum ahead of the narrow vote by the Labor opposition (and government in waiting given recent opinion polls) over the weekend to lift its ban on new uranium mines.

Minews. Keep an eye on what the reaction is on Monday, please.

Oz. Will do. But before then consider how some of the better-known uranium stocks performed last week. The local leader, Paladin (PDN) managed a modest A16 cents (1.7 per cent) rise to A$9.65, and the most highly-rated explorer, Toro (TOE) gained A3 cents (2.4 per cent) to A$1.25, but most of the other uranium hopefuls slipped a few cents. Havilah (HAV) lost A3 cents to A$2.27, while Uranex (UNX) and Uran (UNA) eased back by half-a-cent each to A$1.82 and A68 cents respectively. The biggest locally listed producer, Energy Resources of Australia (ERA) also reflected the uncertainty about the immediate future for uranium mining by slipping A74 cents (2.9 per cent) on Friday to wipe out most of the gains made earlier in the week. At one stage on Thursday, ERA was trading as high as A$25.50, but ended the week as A$24.48, technically up A31c (1.3 per cent), but in reality down A$1.02 (4.2 per cent) in a day as speculation grew that the ban on new mines will be lifted.

The best uranium news came in the shape of a new float, Territory Uranium (TUC), which is exploring in a couple of the historic hot spots for Australian uranium, including the delightfully-named Rum Jungle and Alligator River. Territory raised its modest A$4 million at A20 cents a share, and started trading on Thursday at A58 cents, which was a pleasant bonus for stags, slipped as low as A46.5 cents, and closed at A57 cents.

Minews. A nice return for day’s work. So much for uranium, how about some of those highlights and lowlights to mentioned?

Oz. Two stand-out performances are worth noting. Independence Group (IGO) which has mainly been seen as a nickel producer is fast becoming a gold stock thanks to its 30 per cent stake in the Tropicana gold discovery with AngloGold Ashanti. Located in the middle of nowhere - well, 400 kilometres north-east of east of Kalgoorlie - Tropicana is shaping as the best gold discovery down this way in decades, somewhere in the five million ounce range, but with drilling continuing. Independence rose another A66 cents (11 per cent) last week to close at A$6.71, but only after hitting a 12-month high of A$7.08 on Wednesday. A year ago the stock was trading around A$2.90, and even a month ago it was less than A$5. Kagara Zinc (KZL) was another outstanding performer, rising A93 cents (17.2 per cent) to A$6.34 on the strength of very solid March quarter production report which revealed that copper was now accounting for 70 per cent of the company’s cash flow.

Minews. And the bad news for week?

Oz. Thor Mining (THR) which came down here from your AIM market copped a slathering on Friday when it announced that a Chinese partner in its molybdenum project had withdrawn. The announcement took the market by surprise. Until Friday good news had been anticipated with Thor rising from A40 cents to A46 cents between Monday and Thursday. On Friday the stock crashed to A31 cents, before picking up some lost ground to end the week at A35.5 cents, down 11.3 per cent on the week.

The gold sector was also flat, in line with the easier London bullion price. Troy (TRY) was hit hardest, dropping A26 cents (8.3 per cent) to A$2.85, St Barbara (SBM) lost A2 cents (3.2 per cent) to A60 cents, and Lihir (LHG) lost A10 cent (3.2 per cent) to A$2.96 as it went about its major refinancing package.

The nickel stocks were generally weaker despite the price holding about US$23 a pound, in what might have been a reflection of the currency effect. Jubilee (JBM) slipped A61 cents (3.5 per cent) to A$16.86, Minara (MRE) eased A8 cents to A$7.46, and while Western Areas (WSA) technically ended the week up A34 cents (6.2 per cent) at A$5.79 that was well down on the stock’s high of A$6.05 reached on Thursday.

Minews. Thanks Oz. Don’t forget that uranium special on Monday.

 

[drillinto]

April 30, 2007

Australia Still Exhibits An Ambivalent Attitude To New Uranium Mines Despite Vote

By Our Man In Oz

It wasn’t the flood that some uranium enthusiasts had forecast but there was certainly the sound of a logjam breaking earlier today on the Australian Stock Exchange. Some uranium explorers, but certainly not all, enjoyed buoyant trading during the first session since Saturday’s historic political decision to dump the country’s controversial “three mines” policy. Some of the better upward moves included Alliance Resources (AGS) up A22 cents (8.7 per cent) to A$2.77, Toro (TOE), up A7.5 cents (6 per cent) to A$1.32, PepinNini Minerals (PNN), up A16 cents (6 per cent) to A$2.81, and Summit (SMM) up A11 cents (2.1 per cent) to A$5.83.

But, set against those rises were a number of falls caused by investors trying to assess what has actually happened in Australia and how it influences the companies they follow. There were several cases of stocks opening strongly, but quickly running out of puff. In the breathless camp was the local sector leader Paladin (PDN), which started trading at A$9.85, up A20 cents on its Friday close, but as the day dragged on Paladin slipped back to A$9.67, up just A2 cents. Curnamona (CUY) did even worse, opening at A$2.73, a gain of A10cents on Friday, stormed up to A$2.84,a and then fell away to A$2.60, for a loss of A3 cents on the day.

Wild Horse Energy (WHE) was in another category of uncertainty. It is an Australian explorer spending most of its time and effort in the U.S. With conditions in Australia changing local investors are looking closer to home despite Wild Horse being a favourite since its spectacular float last November when its A20 cent shares started trading at A90 cents. Earlier today, the stock opened at A$1.65 (up A3 cents on Friday) and then fell away to A$1.61, down half-a-cent. Berkeley Resources (BKY) was in the same boat thanks to its focus on Spain. It opened at A$1.80 (up A2 cents), and then dropped back to A$1.75, down A3 cents on its Friday close.

Those share price moves indicate how the ground is shifting in Australia’s uranium sector. The best of today’s performers have tenements in South Australia, the State most likely to see new mine developments, along with the Northern Territory which is still partially governed by the central government in Canberra. If nothing else, the price movements illustrate how politics remains a major factor in the uranium game. To help explain the new Australian political landscape, subject to change without notice in typical political fashion, here is a potted picture.

On Saturday the national Opposition, the Australian Labor Party, dropped its 24 year-old three mines policy and said it was now in favour of new mines. However, not all States, despite having Labor governments, say they will go along with the new national policy – and it is unlikely that their national leader, Kevin Rudd, will spend much political capital trying to force the States into line. Saturday’s vote was too narrow for that. What might easily emerge in Australia is a mix of pro and anti-uranium States. SA and the NT are pro. Western Australia is anti. Queensland is swinging and there’s little exploration activity elsewhere.

In South Australia there is absolutely no doubt that uranium is seen as flavour of the month with that State’s Premier, Mike Rann, telling a mining conference this morning that his State was “pro business, pro mining, and pro uranium”. Across the border in Western Australia that State’s Premier, Alan Carpenter, was maintaining his anti-stance, which can loosely be described as “over my dead body”. Armed with more knowledge than you ever needed (or dare ask) about Australia’s internal politics here’s a call of the card of the top 25 uranium explorers.

The prices in the table start with Monday’s opening price, and then the price an hour before the close of trading:

Arafura (ARU) opened at $1.84 and fell back to A$1.80
Berkeley (BKY) A$1.80 to A$1.75
Bannerman (BMN) A$3.46 to A$3.45
Compass (CMR) A$5.10 to A$5.02
Contact (CTS) A59 cents to A57 cents
Curnamona (CUY) A$2.73 to A$2.60
Deep Yellow (DYL) A67 cents to A68 cents
Epsilon (EPS) steady at A38
Energy Metals (EME) A$7.21 to A$7.09
ERA (ERA) A$24.81 to A$25.19
Extract (EXT) A82 cents to A83 cents
Giralia (GIR) steady at A79 cents
Havilah (HAV) A$2.33 to A$2.37
Korab (KOR) A$1.13 to A$1.08
Marathon (MTN) A$1.84 to A1.77
Newera (NRU) A32 cents, A31 cents, A32.5 cents
Nova (NEL) A$4.10 to A$4.15
Paladin (PDN) A$9.85 to A$9.67
PepinNini (PNN) A$2.86 to A$2.81
Summit (SMM), A$587 to A$5.83
Toro (TOE) A$1.29 to A$1.32
Uran (URA) A68.5 cents to A68 cents
Uranex (UNX) A$1.90 to A$1.86
Western Metals (WTN) A28 cents to A29 cents
Wild Horse (WHE) A$1.65 to A$1.61

Source ==> www.minesite.com

 

[drillinto]

April 25, 2007

Teck Cominco And Rudi Gomez Break Copper Drilling Records At Carrapateena

By Our Man In Oz

We all make mistakes in life, but it’s not often that we make multi-billion dollar mistakes. Mick Davis, however, and his merry crew at the Anglo/Swiss mining giant, Xstrata, can look back to a time in 2003 when they decided that exploration was for people with rocks in their head, and the way forward was to buy existing mines. Financially, that looks smart – that is until you run the numbers over a curiously-named copper discovery in South Australia called Carrapateena. Until 2003 Carrapateena was part-owned by MIM, the big Australian copper and coal miner acquired by Xstrata – which promptly shut down MIM’s exploration division and quit all exploration joint ventures. Included in the dismissal list was a project with a lone prospector by the name of Rudi Gomez at Carrapateena – the same place which on Tuesday re-wrote exploration record books with a drill core intersection measuring 905 metres (more than half-a-mile) averaging 2.1 per cent copper and one gram a tonne gold.
To describe this as a bonanza strike is a spectacular understatement. This is bonanza cubed. Not only is the thickness of the discovery mind-numbing. But it is in a part of Australia with a habit of throwing up world-class discoveries which include BHP Billiton’s Olympic Dam mine, and Oxiana’s Prominent Hill development. More importantly, Carrapateena is now being drilled by a serious-minded miner which still believes in exploration, the Canadian major, Teck Cominco. It was Teck which first alerted the world to the latest developments at Carrapateena, a godforsaken expanse of semi-desert about 500kms north-west of Adelaide, with a bland paragraph buried on page 13 of its latest quarterly report.

“In Australia, recent drill results from the Carrapateena project (hole 50) included 905metres grading 2.1 per cent copper and one gram a tonne gold. Within this interval are intersections of 191metres grading 3 per cent copper and 0.9 grams a tonne gold, and 95metres grading 3.3 per cent copper and 0.6 grams a tonne gold.” If that isn’t enough to excite an exploration geologist (of the type not employed at Xstrata) there’s more. “Several drill holes 100metres to the north, east, and south-east, have reported visual copper mineralisation. Assays are pending for these holes.”

It is a long time between a drill hit and a mine opening. WMC, the company which discovered Olympic Dam, then known as Roxby Downs, spent the best part of 20 years drilling and developing a mine which now contains much more than a treasure trove of copper. It is also the world’s largest known deposit of uranium, and a profit powerhouse inside BHP Billiton. But Teck is obviously getting a little excited by what’s being turned up at Carrapateena because it noted the terms by which is can acquired 100 per cent of the discovery; A$32 million in periodic payments, 75,000 metres of drilling, and a final payment equivalent to 66 per cent of the fair market value of the property as determined independently.

Gomez, without a shadow of doubt, will be a very rich man, one day – and half his luck. Born in the Philippines, he studied geology in Australia under a student-assistance package known as the Colombo plan. He then moved to Australia and spent 16 years exploring on his own in the South Australian outback. In 1995 he picked up the Carrapateena block, attracting a number of joint venture partners, including MIM. When Xstrata took over, they dumped him – before the prospect had even been drilled. Fired with enthusiasm, Gomez called up friends and past the hat around, with a number putting in between A$20,000 and A$40,000 each. “I warned them the chance were only one in 200,” Gomez told Australian media in 2005. What a surprise in August, 2005, when hole No.2 came in with a hit of 107 metres assaying 1.94 per cent copper. It was enough for the South Australian Mines Minister, Paul Holloway, to describe the discovery as “phenomenal” – partly because his government had chipped in part of the drilling cost which was a courageous move considering Xstrata’s vote of no confidence.

Measuring the financial implications of Carrapateena are difficult at this stage of its exploration. For Gomez it’s probably a fortune maker, but he’s just one man. For Teck Cominco, it’s probably not yet a market-moving event, though it is worth noting that on the day it released its quarterly the company’s shares rose by 1.7 per cent – at a time when BHP Billiton’s share price was flat, Rio Tinto fell 0.3 per cent, and the company which might have had its foot on a world-class discovery (if it knew how to explore) Xstrata, eased back about two per cent.

More drilling is required at Carrapateena but already Rudi Gomez can hold out his hands and say “look at what I caught”, Teck Cominco can say “look at the one I’m buying at a discount”, and Mick Davis an keep his hands behind his back and mutter about the “one that I let go.”

Oops!

Source: minesite.com

 

[drillinto]

May 06, 2007

That Was The Week That Was … In Australia
==> www.minesite.com/aus.html

By Our Man In Oz


Minews. Good morning Australia, it looks like you had an eventful week?

Oz. It was certainly one full of highs and lows. Uranium came off the boil somewhat, but nickel returned to centre stage, iron ore stocks started to move higher on speculation of another increase in the price of their commodity, and gold had a mixed week of extreme ups and downs.

Minews. Gold first, please, because we saw an encouraging jump in the price late on Friday.

Oz. Yes, that move up to US$688 an ounce should flow through to our stocks on Monday, though in the case of two small explorers the price is irrelevant. Ramelius Resources (RMS), which faded from view after mothballing a small openpit mine called Wattle Dam south of Kalgoorlie in Western Australia, caused a few jaws to drop on Friday when it reported a fresh drill intersection at Wattle Dam in kilograms of gold. The hit was only one metre wide but it assayed 1783 grams a tonne, which is close to 1.8 kilograms a tonne. That result came from within a wider intersection of 48m grading 154g/t – which is close to five ounces to the tonne.

The region in which Ramelius made the big hit is known for tossing up the occasional nugget so this might be a fluke, though news of the intersection saw the stock instantly double in price. Just before the announcement Ramelius was trading at A54 cents. It re-opened after a trading half at A$1, and steamed directly up to A$1.40 before closing the week at A$1.38.

Minews. Keep an eye on that situation, it’s just the sort of news the market wants to hear. And you mentioned another stock not affected by the gold price.

Oz. Correct, but for the opposite reason. Gleneagle Gold (GLN) has been making heavy weather at its Fortnum project, also in WA, finally succumbed to financial pressures and called in administrators. Gleneagle was trading at A19 cents before the chopper dropped. It’s now suspended.

Minews. A timely reminder of the risks in mining. Let’s move through some of the other newsworthy in the gold sector.

Oz. Troy (TRY) came out with a reasonably positive quarterly and rose A10 cents (3.3 per cent) to A$3.10, Centamin (CNT) was also in the news with progress on its Egyptian gold project, adding A11 cents (11 per cent) to A$1.11, but also managed to hit a 12-month high of A$1.14 during Friday trade, and Apex Minerals (AXM) attracted a lot of attention with a bold three-way deal designed to acquire fresh assets, a complex move which saw the stock gain A9 cents (25 per cent) to A44 cents.

Minews. You might find the time to a closer look at that Apex deal. Now for the nickel sector, please?

Oz. LionOre (LIM), which is dual listed in Australia and Canada, was the star of corporate activity, first because of the takeover bid from Xstrata, then the counter bid from Norilsk Nickel, and now talk of a higher Xstrata offer. On the ASX, LionOre added A$5.70 (28.2 per cent) to close the week at A$25.90. Other nickel stocks benefited from that bidding war, and from the nickel price ending the week above US$24 a pound. Minara (MRE), which is also being talked about as a takeover target, added A$1.26 (17 per cent) to A$8.69, down slightly on Friday’s peak price of A$8.80, which was also a 12-month high. Jubilee (JBM) added A84 cents (4.9 per cent) to A$17.85.

Among the iron ore stocks there was a flurry of fresh interest in Fortescue Metals Group (FMG) after a Sydney stockbroking firm, Southern Cross Equities, put out a research note suggesting the company was heading for a price of A$100 a share. FMG has got a fair way to go but it did manage to hit a 12-month high on Friday of A$24.35, before closing at A$24.04, a gain of A$1.29 on the day (5.7 per cent).

Zinc stocks benefited from fresh doubts about development plans for Xstrata’s McArthur River project in Queensland. Perilya (PEM) rose A20 cents (4.7 per cent). Zinifex (ZFX) was up A$1.06 (6.4 per cent) to A$17.61. Terramin (TZN) gained A36 cents (18.9 per cent) to A$2.26, and Kagara (KZL) added A17 cents (2.7 per cent) to A$6.40.

Minews. Perhaps time for a quick look at the uranium stocks before signing off.

Oz. Lots of news about that sector after a very bullish mining conference in Adelaide during the week, but not a lot to show for it on the market. Bannerman Resources (BMN) received some positive publicity on its Namibian projects, but managed a modest gain of A5 cents to A$3.47. Summit (SMM) slipped A8 cents to A$5.65, and Alliance Resources (AGS) which was heavily promoted at the conference by the Premier of South Australia, Mike Rann, fell A5 cents to A$2.74.

Minews. Thanks Oz.

 

[drillinto]

May 09, 2007

An Eventful Day In Melbourne As Rumours Of BHP Billiton Bidding For Rio Tinto Proliferate


By Our Man In Oz
www.minesite.com/aus.html


If BHP Billiton really is bidding for Rio Tinto then it’s one of the investment world’s better kept secrets. When Minesite’s Man in Oz popped in for a light lunch at the Melbourne office of Rio Tinto earlier today it was “controlled serenity”. The BHP name was scarcely mentioned as the chopsticks clacked over a rather delicious display of sushi and chardonnay. The only intrusion to this private world was the repeated beeping of Blackberries, Nokias, and Motorolas as pesky reporters from media not invited to lunch asked for a response to the rumored bid which had driven Rio Tinto shares to within A31 cents of being, what some younger finance reporters are describing, as the race to become the first Australian listed company to clear the magic A$100 a share mark.
Silly children. Yes, Rio Tinto got to A$99.69 in its race against fellow would-be “centurions” Macquarie Bank, Perpetual Trustees and CSL Ltd but, don’t any of them read their financial histories! Poseidon cracked the magic A$100 mark back in the last nickel boom of 1969-70. Minesite’s Man in Oz even remembers one of the great stockbrokers of the time, Hartley Poynton, proudly telling everyone that he paid A$250 for a single Poseidon share. A loud “harrumph” to the new kids in the game.

We digress, somewhat, though for a very good reason. Minesite’s Man has a confession to make. He really hasn’t got a clue as to whether anyone, including BHP Billiton, intends to lodge a takeover bid for Rio Tinto. Perhaps an email went astray, or Minesite has dropped off the private list of correspondence from BHP Billiton’s legal team. Whatever the reason, facts (rather than speculation) are proving awfully hard to come by in what might become the mining world’s biggest takeover battle.

Three thoughts to flesh out the looming (potential) battle for Rio. One, isn’t this the most marvellous example of how most investors have so dramatically under-estimated the real story in the resources world? Here we have two of the world’s biggest mining companies, possibly locked in a takeover battle, but both trading on price-to-earnings ratios that almost makes you blush. While worthy, but boring, banks are trading in Australia on PEs around 17, BHP and Rio have been priced around 10, or 11 – but have “jumped” this week to 12 and 13.

It makes any thinking man with an understanding of the resources world want to scream “don’t you get it”. China continues to grow at 11 per cent a year, and every Mrs Wong from Shangai to Beijing wants a new washing machine, dishwasher and dryer – and they are all built using metals. India, meanwhile, has just clocked up another year of 8 per cent growth, and is hot on the heels of Germany, and likely to overtake that country as the world’s fifth biggest consumer market by 2025 – with all of its Mrs Chaudrees wanting exactly the same appliances that Mrs Wong wants.

Humor aside, there is a spectacularly simple message here for even that legendary Australian character Blind Freddie and his dog to see. The resources boom is not over. It is just beginning, as is shown by the A$10 billion uplift in Rio Tinto’s market capitalisation today – which is some lift!

The second thought is that what you see in the low PE ratios of Rio Tinto and BHP Billiton you also see in most other mining stocks. If you believe that India and China actually exist, and three billion people are awfully hard to hide, then it’s not just the big boys of mining who are undervalued.

The third thought, and this is a private one. What will be discussed over coffee and croissants when Minesite’s Man pops in for a cuppa at BHP Billiton’s Melbourne office tomorrow? Perhaps football, of the dinkum Aussie variety, will be a safe topic!

 

[drillinto]

May 13, 2007

That Was The Week That Was … In Australia

By Our Man In Oz
==> www.minesite.com/aus.html

Minews. Good morning Australia. Another interesting week, especially with all the rumours about the big two miners, BHP Billiton and Rio Tinto, getting together.
Oz. The top end of town was certainly the focus of attention for much of the week though the speculation seemed to die down towards the close. In fact, the entire mining market ran out of puff on Friday with much of the good early work wiped out by late sellers. Before looking at how our universe of stocks performed it is worth considering just one snapshot on how big a deal the Rio Tinto trading was. On Wednesday alone around A$17 billion worth of shares in that single company changed hands. By value, if that $17 billion had been the price of a full takeover bid, it would have ranked as the biggest ever takeover in Australia, of any category of stock – yet it was just a single day’s business in one stock.

Minews. An interesting milestone in the ongoing resources boom.

Oz. Precisely, because there is every indication that the boom is developing a second (or is that a third) wind. Iron ore led the way, again. Fortescue Metals Group (FMG) rocketed up another A$5.18 (21.5 per cent) to A$29.22, a price which values the stock at A$7.7 billion, and the value of the personal holding of the company’s chief executive, Andrew Forrest, at a rather impressive A$3 billion.

Other iron ore stocks chimed in as news of more price rises filtered through to investors. Sphere Investments (SPH) which is working up an iron ore project in the north African country of Mauritania, added A43 cents (23.3 per cent ) to A$2.28, down a fraction on the 12-month high of A$2.30 reached during Friday trade. BC Iron (BCI) gained another A8 cents (5.5 per cent) to A$1.53, but got as high as A$1.79 on Tuesday. Two weeks ago BC, which is a spin off by Alkane (ALK) and Consolidated Minerals (CSM) was trading at less than A$1. Atlas Iron (AGO) is also starting to gain traction with its Ridley project in Western Australia, earning a strong buy tip from one local stockbroker, Hartleys, and an A8 cents (13.7 per cent) price rise to A66 cents.

Minews. There also appears to have been fresh interest in the nickel sector?

Oz. Correct. Of all the three-or-four nickel booms we’ve seen in this country this one is certainly shaping as the longest, and most widespread – with the added bonus that it’s genuine, and not just speculation-driven. Minara (MRE) led the way with a very solid upward run early in the week, before profit takers clipped it back. At one stage Minara, which might be a beneficiary of widespread takeover chatter, was up A88 cents (10 per cent) at A$9.57, an all-time high. The stock closed at A$8.95 for a gain of A26 cents (3 per cent). Jubilee (JBM) reached A$18.39 on Wednesday before slipping back to close at A$18.20, a rise of A35 cents (2 per cent), and Mincor (MCR) posted a modest gain of A4 cents (1 per cent) to close the week at A$3.86, well down on its Tuesday high of A$4.09, a 12-month high.

Minews. Perhaps time for a quick look at the rest of the base metals sector, and your gold stocks?

Oz. Before doing that let’s look at a couple of the special situations. Ramelius Resources (RMS), which received a special mention last week after a spectacular gold hit at its Wattle Dam project, stunned the market again, this time declaring that it would adopt a policy of fast dividend payments after starting production. News that a small Australian miner would actually spit out cash, rather than consume it, sent Ramelius up another A46 cents (33.3 per cent) to A$1.84. On May 1 you could have got some at A50 cents.

Eromanga Uranium (ERO), was the stand out success in an otherwise lacklustre uranium sector, rising A24 cents (49 per cent) to A72 cents, on the stunningly inconsequential news that it has “started” two airborne surveys of its tenements in South Australia. It sounds a bit cynical but exploring from the air is somewhat easier than digging in the ground and, as far as the text books show, no-one has yet opened a mine in the sky.

The most interesting aspect of the uranium market was its lack of performance at a time when the uranium price hit yet a fresh high of US$120 a pound. Among the regular uranium performers Havilah (HAV) dropped A34 cents (14.4 per cent) to A2.02, Alliance (AGS) delivered a lacklustre set of drilling results and fell A52 cents (18.9 per cent) to A$2.22 and Paladin (PDN) slipped by A50 cents (5.3 per cent) to A$9.06.

Minews. And now for that wrap-up on gold and other base metals, please.

Oz. Golds were mixed, but generally down. Among the usual suspects Troy (TRY) shed A27 cents (8.7 per cent) to A$2.83. Lihir (LHG) lost A3 cents to A$2.98 and Monarch Gold (MON) frightened the horses with a big placement of shares to institutional investors, and fell A2.5 cents (7.8 per cent) to A29.5 cents. Better news for gold bugs could be found with Alkane (ALK) which continues to make progress at its Wyoming project, it added A4.5 cents (13.4 per cent) to A38 cents, and Centamin Egypt (CNT) which technically crept up A1 cent to A$1.11, but at one stage was trading at A$1.27.

Zinc stocks continued to firm along with the zinc price. Zinifex (ZFX) gained A36 cents (2 per cent) to A$17.97, and Perilya (PEM) was up A5 cents (1.1 per cent) at A$4.46, but at one stage on Tuesday was trading at A$4.76. The stand out base metals play was Argosy Minerals (AGY) which reported progress on its Musongati nickel project in the African country of Burundi and shot up A24.5 cents (33.8 per cent) to A97 cents, slightly off its Friday high of A$1.05.

Minews. Thanks Oz.

 

[drillinto]

May 20, 2007

That Was The Week That Was … In Australia
www.minesite.com/aus.html

By Our Man In Oz

Minews. Good morning Australia, how was your week?

Oz. Good, in parts. Flat in others. Uranium and iron ore led the way up. Coal stocks made a useful return, while gold and nickel were relatively flat. The dominant player in the game was the effervescent Andrew Forrest, a man who has come to personify everything that needs to be said about this boom. If Midas was re-born today he would struggle to keep pace with the mercurial Mr Forrest.

Minews. Presumably you’re talking about Fortescue Metals Group (FMG) comfortably clearing the A$30 barrier.

Oz. And the rest. Fortescue not only crashed through A$30 on Monday, it rushed straight up to A$38.50 by Thursday before easing back to close another remarkable week at A$34.45, a gain of A$5.23 (17.9 per cent). A couple of points are worth making about Fortescue. Volume remains low. This is a very thinly traded stock. On only four occasions this calendar year has the number of shares exchanged passed the one million mark. Last week while the stock was rocketing along only 3.5 million shares were traded over five full days, which is about 1.3 per cent of Fortescue’s issued capital. Read what you will into that statistic.

Fortescue was not the only company keeping Mr Forrest busy. He has also found time to play a role in the resurrection of the Mt Windarra nickel mine through his directorship, and large option-holding position in Niagara Mining (NIA), another tear-away winner which has attracted almost as many speculators as it has corporate cops. Niagara dashed up from A$1.13 to A$1.38, a gain of A25 cents (22 per cent) over the week, though at one stage on Tuesday it touched A$1.66 – remembering that less than three months ago this was a A20 cent stock.

What seems to be interesting the regulators, who hit Niagara with a series of questions, is the timing of an announcement relating to a marketing agreement with Fortescue, and who knew what, when. Everyone down this way is awaiting developments on that – especially the new players to the game of speculation who have dubbed Niagara the new Viagra. Apparently something to do with things that go up!

Minews. Presumably the punchline is that they never come down?

Oz. You’ve got it. Though, on a more serious note the games being played in stocks like Viagra (sorry, Niagara) are another warning tell-tale blowing in the breeze that we would all be unwise to ignore. Events in China, which has a market which also appears to have taken a dose of Viagra, are causing old hands down this way to think about cashing in a few chips at the ASX casino.

Minews. Keep your eyes peeled, we’re certainly at a rather fascinating peak in the market. Let’s end the chit chat, time now for more prices, please.

Oz. Best of the uranium stocks was Echelon Resources (ECH) which gained A38 cents (33 per cent) to A$1.53 after announcing, and you had better be sitting down for this one, the discovery of “historic” drillhole data relating to the Valhalla North uranium project. No fresh drilling, just an old file, that’s all it takes to drive Australian uranium stocks to new heights.

Elsewhere among the uranium stocks, there were mixed results. One of the better performers was Mintails (MLI), which has reported an extensive inventory of material in old uranium tailings in South Africa. It gained A18 cents (40 per cent) to A63 cents. Havilah Resources (HAV) gained A28 cents (13.8 per cent) to A$2.30, while Summit (SMM) ran out of puff, shedding A34 cents (6.3 per cent) to A$5.04.

Among the iron ore stocks we had Fortescue lead the way, but with a few useful followers. Transit Holdings (TRH) which is a newcomer on the scene, reported encouraging exploration results, and promptly doubled in price by Wednesday, soaring from A19 cents to A38 cents. It later eased back to close at A34 cents, a rather pleasant 79 per cent gain over five trading day. Sundance (SDL) which has an iron ore project in the African country of Cameroon, added A4.5 cents (27 per cent) to A21 cents, and Cape Lambert (CFE) gained A2 cents (4.4 per cent) to A47.5 cents on news that a wily old fox in Ian Burston has been appointed executive chairman.

Minews. Before signing off, any special situations worth noting?

Oz. Two which stand out. Dwyka Diamonds (DWY) made a return to the winner’s circle with a rise of A29.5 cents (36.6 per cent) from A80.5 cents to A$1.10 on the strength of its new interests in nickel in Burundi and gold in Swaziland, and Ironbark Gold (IBG) which added A60 cents (13 per cent) on the strength of zinc in Greenland.

Minews. Looks like a couple of name changes might be on the way with a diamond company going into nickel and a gold company chasing zinc.

Oz. Yes. We do live in interesting times, don’t we!

 

[drillinto]

May 27, 2007

That Was The Week That Was … In Australia
Visit ==> www.minesite.com

By Our Man In Oz

Minews. Good morning Australia. How was your week?

Oz. Good, in parts, but flat in others. No discernible pattern emerged, with the biggest winners to be found, again, among the iron ore stocks and a hotch-potch of speculative situations. Next week, if we dare caste an eye forward, should be much more interesting as the strong finish to base metals trading in London on Friday is yet to be reflected in the Australian market.

Minews. Don’t forget it is a holiday on Monday in London We’ll let next week take care of itself. Time now for prices.

Oz. Let’s start with the iron ore stocks because a stand-out performer on Friday was Atlas Iron (AGO) which hit a 12-month high in busy trade on Friday which saw the stock add A7 cents (10.4 per cent) to A74 cents. Interest in Atlas has been triggered by a realisation in the market that the company has a viable mine development plan, and has the potential to attract a partner to its very big Ridley project near Port Hedland.

Minews. We’ll take a closer look at Atlas next week.

Oz. Other iron ore stocks to perform strongly included Grange Resources (GRR) which added A37 cents (21.7 per cent) to A$2.07 thanks to solid progress at projects in Malaysia and at Southdown in Australia. Sphere Investments (SPH), another Australian miner with global ambitions, traded up to a 12-month high of A$2.60 on reports of progress at its Mauritanian venture. That closing prices represented a gain of A26 cents (11.1 per cent) over the week. Sundance (SDL) was a third roaming Australian with an African iron ore project on its books. It added A4 cents (19 per cent) to close the week at A25 cents, down a fraction on its 12-month high of A26 cents reached during Friday trade.

Minews. And presumably the sector favourite, Fortescue Metals (FMG) also did well.

Oz. Not particularly, though it was perhaps more a case of taking a breather after a few rather spectacular weeks. The stock closed the week at A$33, down A$1.45 (4.2 per cent), and well below its 12-month high of A$38.50 reached 10 days ago. However, the latest prices need to be seen in the light of a stock trading at A$6 a year ago.

Minews. Precisely. Perhaps time next week for a closer look at Fortescue as well as Atlas. Let’s move along now and look at other sectors.

Oz. This is where is gets a little difficult because unlike iron ore there wasn’t a pattern. Nickel stocks were generally down, as were the zinc and gold stocks. Among the nickels, Sally Malay (SMY) dropped A56 cents (11.2 per cent) to A$4.43. Western Areas (WSA) was off A16 cents (3 per cent) to A$5.34, and Mincor shed A27 cents (6.5 per cent) to A$3.90. Jubilee (JBM) went against the trend with a modest rise of A14 cents (1 per cent) to A$17.20.

Among the zinc stocks, Zinifex (ZFX) slipped A48 cents (2.8 per cent) to A$16.77, and CBH (CBH) was off A2 cents (3.6 per cent) at A53 cents. Perilya (PEM) went the other way with a A10 cent (2.4 per cent) rise to A$4.20.

It was a repeat story among the golds. Most down, a handful up, largely reflecting the lacklustre gold price. St Barbara (SBM) lost A4 cents (7 per cent) to A50 cents. Troy (TRY) was down A6 cents (2 per cent) at A$2.80, and Lihir (LHG) slipped by A3 cents (1 per cent) to A$3.13. Avoca (AVO) was one of the rare winners with a rise of A3 cents (2.2 per cent) to A$1.35.

Minews. Perhaps time for look at some of the speculative situations you mentioned earlier?

Oz. This is where the market actually gets much more interesting because it seems that some of the hot money in the market is seeking out the next game to play. One of the more interesting was a previously unknown called The Gold Company (GGG) which, in keeping with the boom, is actually exploring for uranium in Greenland. It had been suspended since late last year when its last sale price was A28 cents. It burst back on the scene last week at A$1.50, rushed up to A$2.19, and closed the week at A$1.90.

Other hot specs with a previous low profile included Carnavale Resources (CAV) which announced a molybdenum deal in Brazil and promptly shot up to a 12-month high of A$1.30, before easing to close the week at A$1.20, up A17 cents (16.5 per cent) on the week. Focus Minerals (FML), which recently completed a big capital raising for its gold and nickel exploration projects, copped a “speeding fine” from the Australian Stock Exchange thanks to a rise of A3 cents (52.6 per cent) from A5.7 cents to A8.7 cents during the week. Naturally, it knew of no reason for the sharp move, and the price settled at A7.6 cents at the close. Navigator (NAV), which has an interesting gold project on its books, was another star of the week, rising A18 cents (25 per cent) to A89 cents.

Minews. Thanks Oz.

 

[drillinto]

June 03, 2007

That Was The Week That Was … In Australia
==> www.minesite.com/aus.html

By Our Man In Oz

Minews. Good morning Australia. It looks like another busy week on your market.

Oz. Certainly better than when we last spoke. Most stocks improved, with a couple of outstanding performances, and a return of gold to centre stage after months of dominance by uranium and iron ore. Warwick Gold (WRK), which only listed in February, showed that a good gold drill result can still excite. It almost doubled in price during the week after reporting an 8 metre intersection of 22.3 grams a tonne of gold from its first ever drill hole. The result came from the Jimbelbar project in the Pilbara region of Western Australia and was described by management as a “good start”. Investors were a little more enthusiastic, running Warwick up by A21.5 cents (54.4 per cent) to a close of A61 cents on Friday, though at one stage during the day the stock hit A74 cents in heavy trade.

Minews. A good start indeed for a new explorer.

Oz. There was more from the gold sector with Independence (IGO) back in the spotlight after it announced, with AngloGold Ashanti, that it would start a pre-feasibility study into an open pit development at the jointly-owned Tropicana discovery located in “tiger country” some 400 kilometres north-east of Kalgoorlie in what could be the start of a new gold province. That announcement sent Independence up by A91 cents (12.3 per cent) to a close of A$8.31, a fraction short of the stock’s 12-month high of A$8.50 reached about 10 days ago.

Minews. And what about the rest of the gold sector?

Oz. Sino Gold (SGX) also put in a strong week after announcing an expanded resource position at its Jinfeng project in China. It added A35 cents (6.1 per cent) to A$6.05. Apex Minerals said it had raised the A$32 million needed for its expansion projects, and gained A6 cents (10.5 per cent) to A63 cents. Most other gold stocks were flat to down on lack of news. Kingsgate (KCN) which has improved greatly on last year’s slump eased A30 cents (5.3 per cent) to A$5.33. Troy (TRY) lost A20 cents (7 per cent) to A$2.60, while St Barbara managed a gain of A1.5 cents (3 per cent) to A51.5 cents.

Minews. If gold led the way does that mean iron ore and the other sectors dropped off?

Oz. No. There were some special performances among the iron stock again. Fortescue Metals (FMG) cleared the A$40 barrier on Friday when it hit an all-time high of A$40.19 during Friday trade, before easing to close the week at A$39.50, a rise of A$6.50 (19.7 per cent) over the week. Never forget this was a A$6 stock a year ago. We also saw another strong performance from Atlas Iron (AGO) which added A14 cents (18.9 per cent) to A88 cents, down a fraction on its all-time high of A90.5 cents reached early on Friday.

Minews. It seems that the entire iron ore sector is lifting to new heights?

Oz. You could say that. Most iron ore stocks rose. The best performances came from Polaris Metals (POL) which rocketed up by A10.5 cents (41.2 per cent) to A36 cents on reports of a major new discovery in central Western Australia. At one stage the stock was trading at A39 cents. Territory Iron (TFE), one of the stable of stocks controlled by Michael Kiernan, rose A18 cents (24.3 per cent) to a close the week at A92 cents, down slightly on its 12-month high of A95 cents reached earlier in the week. Portman Mining (PMM) which clings to a listing despite being 80 per cent owned by Cleveland Cliffs, has become a speculator’s plaything in the belief that a mopping up takeover bid is one the way. It added another A40 cents (5.6 per cent) to A$7.50. On the downside, Grange Resources (GRR) came out with a highly encouraging announcement about a joint venture with a Japanese trading house over its Southdown project and proceeded to ease by A4 cents (2 per cent) to A$2.03. Most of the decline took place close to Friday’s final bell because at one stage Grange was trading at A$2.26.

Minews. Time for a quick look at the uranium sector.

Oz. Not a lot of uranium action. As we’ve discussed in the past this was very much a story of travel rather than actually arriving and having to do something, such as start a mine. Sector leader, Paladin Resources (PDN) continues to retreat in the face of French opposition to its takeover of Summit Resources (SMM). Paladin lost a modest A15 cents (1.7 per cent) to A$8.60. It’s now down more than A$2 from its all-time high of A$10.80 set earlier in the year. Summit lost A16 cents (3 per cent) to A$4.97. The easing trend was sector wide, taking stocks such as Uranex (UNX) down A3 cents (1.8 per cent) to A$1.60.

Minews. Thanks Oz.

 

[drillinto]

June 10, 2007

That Was The Week That Was … In Australia
==> www.minesite.com/aus.html

By Our Man In Oz


Minews. Good morning Australia, it looks like you had a bit of a rocky end to your week.


Oz. Quite bumpy, thank you. The nickel sector took a hammering, as expected after the London Metal Exchange changed its warehousing rules and nickel fell out of bed. Uranium stocks also took a hit by a fall in the price of uranium, and a surprise profit warning from the country’s biggest uranium producer, Energy Resources of Australia (ERA). Against the bad news we did see a handful of stocks deliver excellent returns, but to paint a picture of how difficult it was on Friday BHP Billiton was rated as the 10th best performing resource stock on the day -- and it fell A6 cents.

Minews. Ouch!

Oz. Indeed. But, like all market situations, it depends on the timing of your measurements as to whether you want to be gloomy or cheerful. The end of the week was pretty dreadful, but looked at in totality the key metals and mining index on the ASX actually rose modestly from 4363 to 4375 points despite the 44.9 point (1 per cent) fall on Friday.

Minews. Let’s have whatever good news you have first, and then the bad.

Oz. Iron ore stocks stood out, yet again, as more forecasts of price rises reached investors. This time it was Citigroup which joined the party with a tip of a 20 per cent hike next year. Last week it was Goldman Sachs tipping a 9 per cent rise. It’s forecasts like that which pushed Cape Lambert (CFE) to a 12-month high of A67.5 cents on Friday, up A 5.5 cents (8.9 per cent) on the day, and A16.5 cents (32.3 per cent) for the week. Gindalbie Metals (GBG) also hit a 12-month high of A97.5 cents on Friday, before closing the week at A95, also up A5.5 cents (6.1 per cent) on the day and A26 cents (37.4 per cent) for the week.

Minews. Those are very impressive price moves in what was a tough week.

Oz. They are, and the trend can be found across the iron ore sector. Talk about a fresh takeover bid for Portman (PMM) continues to grow and it was up another A80 cents (10.6 per cent) to A$8.30, down a fraction on the 12-month high of A$8.50 reach during Friday trade. Atlas Iron (AGO) added another A1.5 cents (1.3 per cent) to close the week at A90 cents, also down slightly on its 12-month high of A93 cents reached earlier in the week. The good news in iron ore spread right down to the smallest players, including Ferrowest (FWL) which rarely gets a mention but gained A6 cents (30 per cent) to A26 cents during the week. The only heavyweight loser was Fortescue Metals Group (FMG) which appears to have simply run out of puff, and into profit-taking after a stellar start to the week. On Monday, the stock rocketed to an all-time high of A$41.75, but then retreated to a low for the week of A$34.52 on Friday, and a close of A$36, down A$3.50 (8.8 per cent).

Minews. Time for the tough news.

Oz. Followers of the booming uranium sector got a bit of a fright from the latest metal sales which revealed a small fall of US$3 a pound to US$135/lb. It was that modest correction after a powerful upward run which combined with ERA issuing a profit warning on Friday because of flooding at its Ranger mine earlier in the year. Rather than post a profit, ERA is expecting a loss of between A$5 and A$10 million for the June half. That announcement saw the stock drop A$1.18 (5.3 per cent) to A$21.22 on Friday, taking the week’s loss to A$1.88 (8.1 per cent).

The ERA fall, and the uranium price contraction saw most uranium stocks fall on Friday. Paladin (PDN) lost A30 cents (3.4 per cent) on Friday to close at A$8.50, though over the full week the drop was only A10 cent (1.1 per cent). Havilah (HAC) slipped by A6 cents (2.7 per cent) to A$2.10. Wild Horse (WHE) was off A3 cents (1.2 per cent) to A2.52, and Uranex (UNX) eased by A1.5 cents (1 per cent ) to A$1.58.

Minews. And the nickel sector?

Oz. Hit hard by the sharp fall in the price of its metal. Jubilee (JBM) was the least effected, easing A14 cents (1 per cent) to A$17.36. Minara (MRE) was clobbered on Friday, losing A67 cents (7.9 per cent) to A$7.80. Western Areas (WSA) lost A24 cents (4.1 per cent) on Friday, and Sally Malay (SMY) was down A56 cents (12 per cent) to A$4.09 for the week, but was trading as low as A$4 on Friday.

To finish on a positive note, most gold stocks strengthened a little despite a lacklustre gold price and continued strength in the Australian dollar exchange rate. Troy (TRY) added A12 cents (4.6 per cent) to A$2.72, Monarch (MON) was up A2.5 cents (8.3 per cent) to A32.5 cents, and Oxiana (OXR) gained A5 cents (1.5 per cent) to A$3.32.

Minews. Thanks Oz.

 

[drillinto]

June 17, 2007

That Was The Week That Was … In Australia
==> www.minesite.com/aus.html
[Registration to this fine site is free]

By Our Man In Oz

Minews. Good morning Australia, how was your week?


Oz. Good, in parts. Iron ore remained the favoured mineral. Nickel stocks followed the price down, and gold producers made a surprise return to favour despite the price doing nothing to encourage investors.

Minews. Let’s look first at gold because it sounds like some investors are building positions ahead of a more general uplift.

Oz. That might be the case because a couple of the moves were rather interesting, plus we had the bonus of a few good drilling results. Kingsgate (KCN) certainly pleased the market by announcing on Thursday that it had closed all of its hedge positions. That sent the stock up to a 12-month high of A$6.06 in early Friday trade before closing closed at A$5.72, up A43 cents (8.1 per cent). Two figures underline just how important it was for Kingsgate to get out of its hedges. Forward sale deliveries this financial year have totalled 58,780 ounces at a price of, wait for it, US$316. In other words, Kingsgate was missing out on US$337 per ounce. If we use Friday’s London gold price as our measure, that equates to a “missing” US19.8 million from gold production.

Minews. Sobering stuff, but a reminder of why gold banking can be so profitable when producers agree to tough hedge terms. More gold prices, please?

Oz. Good upward moves were made by Perseus Mining (PRU) which reported excellent results on Friday from its Ayanfuri project in Ghana, including 110 metres assaying 3.8 g/t gold. The stock rose A11 cents (14 per cent) on the news to close the week at A89.5 cents, taking the week’s rise to A12.5 cents (16.2 per cent). Tasman Resources (TAS) also reported good drill hits on Friday, including 9 metres at 31 g/t from its Parkinson Dam project in South Australia. That news helped Tasman add A6 cents (25 per cent) over the week to close at A30 cents.

Centamin Egypt (CNT) added to the good news on gold exploration with more promising hits at its big Sukari project, news that helped the company add A9 cents (8 per cent) to A$1.19. D’Aguilar Gold (DGR), which has been quiet for some time, was in the news during the week though not for a gold exploration. It reported strong molybdenum assays from its Anduramba in Queensland, and enjoyed a share price rise of A7.5 cents (18.7 per cent) to A47.5 cents.

Minews. Now for those iron ore moves you mentioned.

Oz. Yes, and once again it was Fortescue Metals which hit the headlines though not for any share price rise, more for its move to raise an extra A$1 billion to complete and expand its project in Western Australia. The stock went into a trading suspension on Friday with a last sale at A$34.95 on Thursday, which was down a modest A7 cents over the week. Details of the capital and debt raising are expected to be released on Monday. Atlas Iron (AGO) was also back in the news with a deal which will enable it to export its ore across Fortescue’s port. Atlas gained A6.5 cents (6 per cent) to close at A$1.15 on Friday, though it’s worth noting the 12-month high reached on Thursday of A$1.32. Sundance (SDL) and Sphere (SPH) also attracted buyers as they step up work on their African iron ore projects. Sundance added A12 cents (40 per cent) to A42 cents, and Sphere added A26 cents (8.7 per cent) to A$3.26.

Minews. Good timing for your recent piece on Sundance. Now time for a dose of bad news, and that was in your nickel sector.

Oz. Up to a point. The lower nickel price hit most producers. Minara (MRE) was down another A55 cents (7 per cent) to A$7.28. Western Areas (WSA) did better but still lost A7 cents (1 per cent) to A$5.50. Jubilee (JBM) slipped by A52 cents (3 per cent) to A$17.38. Mincor (MCR) swam against the tide, adding A10 cents (2 per cent) to close at A$4.78, though it was in retreat on Thursday and Friday after peaking in mid-week trading at A$4.95.

Minews. Much uranium news?

Oz. Not really, except a surprise production warning from Paladin Resources (PDN) which lost A20 cents (2.3 per cent) to A$8.30, and Omegacorp (OMC) which was surprised by the sudden withdrawal of a takeover offer by the London-based Central African Mining, a company which might be familiar to you. Central African claimed conditions had changed and it was walking away. The situation around Omegacorp is now rather tricky with the company having previously welcomed a takeover move by Canada’s Denison which has a 33 per cent as a result of that bid.

Minews. We wondered at the time, if you remember, whether Central African Mining would be able to follow through with this one. Now we know. Anyway, it sounds like your uranium sector has reached an interesting time.

Oz. Yes, with most observers suspecting that we’ll get more news of the Omegacorp and Paladin variety.

Minews. Thanks Oz.

 

[drillinto]

June 24, 2007

That Was The Week That Was … In Australia
Please visit ==> www.minesite.com/aus.html

By Our Man In Oz

Minews. Good morning Australia, it looks like another strong week for your iron ore stocks?

Oz. Yes, it was. But, the real story of the week was the way exploration success attracted investors back to the gold sector. Strong upward moves came from at least five small gold stocks, with rises of 30 per cent and more, in a week when the gold price fell by US$1, and even more when measured in Australian dollar which hit a 17-year high against the U.S. currency.

Minews. Now that is interesting. Has there been a change of sentiment towards gold stocks?

Oz. It certainly seems that way, perhaps at the expense of the uranium and nickel sectors which have gone rather quiet as the price of their commodities peak, or fall.

Minews. Prices, please?

Oz. Best of the gold news came from Barra Resources (BAR) which announced a series of high-grade intersections from underground diamond drilling at its Burbanks project near Coolgardie in Western Australia. Best hit, from a fresh discovery called the Dahmu Reef, was 25.1 metres at 31.8 g/t gold , almost precisely one ounce to the tonne, and 10.2 metres at 68.5 g/t. That result, announced on Friday, sent the stock up by A16.5 cents (32.7 per cent) on the day to A67 cents, and the rise for the week to A20 cents (42.5 per cent).

Next best was one-time takeover target, Andean Resources (AND) which hit a 12-month high on Friday of A$1.18 after more good drilling news from its Cerro Negro project in Argentina. Andean’s best hit was 51.8 metres at 25.3 g/t. The drill result, and sharply higher share price, proved too tempting for traders who dumped stock near the close so Andean ended the week at A$1, which was still a gain of A29.5 cents (41.8 per cent).

Not far behind was Alkane Exploration (ALK) which continues to generate highly encouraging drilling results from the Caloma prospect which lies inside its Wyoming project area in New South Wales. The latest assays include 33 metres at 5.02 grams a tonne from a depth of 78 metres. Included in that assay was a 15 metre zone grading 7.95 g/t. On the market, Alkane added A9 cents (25 per cent) to close the week at A45 cents – which was also a 12-month high.

The fourth gold stock to enjoy an upward kick was freshly-listed Carbine Resources (CRB) which reported strong drilling results from its Red Dam prospect north-west of Kalgoorlie. Best result was 5 metres at 44.07 g/t from 32 metres, enough to send the stock up to A45 cents on Wednesday, its highest since listing in mid-March. The stock closed at A43 cents, a gain of A5 cents (13.2 per cent).

Fifth runner in the gold stakes was Apex Minerals (AXM) which has embarked on a major gold asset acquisition project which this week saw it announce the acquisition of Oxiana’s Wiluna operations. That news on Wednesday saw Apex soar to its 12-month high of A$1.06, a gain of A20 cents (23.2 per cent) on the closing price of the previous week. Profit takers then chipped in, knocking the stock back to a close on Friday of A88 cents, shrinking the week’s gain to just A2 cents (2.3 per cent).

Minews. What an interesting time in your gold sector. What about other areas of the market?

Oz. Once again it was hard to avoid the iron ore players, of which there seem to be more on a daily basis. Mt Gibson (MGX) was a stand-out winner after announcing the first shipment of iron from its Koolan Island project, adding A16 cents (13.6 per cent) to A$1.33, down a fraction on the A$1.36 reached on Tuesday, the stock’s 12-month high.

Murchison Metals (MMX) was an exceptionally strong iron ore performer after announcing a joint venture with Japan’s Mitsubishi. The deal, which promises to catapult Murchison into the ranks of significant iron ore producers, saw the stock add A$1.69 (42 per cent) during the week to close at A$5.72 – which was actually down a long way from the stock’s all-time peak of A$6.24 reached early on Friday.

Atlas Iron (AGO) continued its remarkable upward move, hitting an all-time high of A$1.63 on Thursday before ending the week at A$1.44, a gain of A29 cents (25.2 per cent)

Minews. We’re running out of time, much other news?

Oz. The uranium sector, as hinted, was relatively flat. One of the multitude of new uranium floats, Uranoz (URO) flopped. Its A20 cent shares closed on Friday at A19 cents, perhaps the first of the uranium floats to sink, and perhaps a sign of the future.

The small nickel stocks were mixed. Sally Malay (SMY) said it was paying off all debt, news that pushed the stock up by A41 cents (10.4 per cent) to A$4.36. Mincor (MCR) was equally interesting, falling sharply early and then recovering A31 cents (6.9 per cent) on Friday to end the week up A1 cent on renewed takeover speculation. Western Areas (WSA) frightened the horses with a big convertible bond issue, pushing the share price down A53 cents (9.6 per cent).

Minews. Thanks Oz.

 

[drillinto]

Can anyone guess who is the journalist behind "Our Man in Oz" ?

It is not Barry FitzGerald (The Age)

Your feedback is most welcome

 

[drillinto]

The next weeks will be better...


July 01, 2007

That Was The Week That Was … In Australia
Source: www.minesite.com/aus.html
[The site registration is free]

By Our Man In Oz

Minews. Good morning Australia, it looks like you had a quiet end to your financial year.

Oz. A curious week is perhaps the best way to describe the past five trading days. We started well; fell out of bed on Wednesday; and then staggered to a neutral sort of finish. It was almost as if everyone was so tired of what has been a marvellous year that they just wanted to draw a line in their trading accounts and watch football over the weekend before starting fresh on Monday.

Minews. Is that your way of saying not much happened?

Oz. Oh, a lot happened, but nothing terribly exciting, and most share price movements were flat, once the mid-week slump was washed out of the equation. Overall, the Australian market, as measured by the all ordinaries index, finished the financial year up 24.9 per cent, while the metals and mining index closed up 32.4 per cent.

Minews. Not a bad year. Prices now, please?

Oz. Let’s start with the story of the week, the bare-knuckle scrap which is Michael Kiernan v Brian Gilbertson and friends at Consolidated Minerals. While harsh words were being tossed gaily about the CSM market opened strongly on Monday at A$2.92, a gain of A8 cents as rumours of a counter bid gathered, peaked at A$3.23 during Friday trade, a 12-month high for the stock, and then limped to the line, ending the week and the year at A$3.14, a gain of A30 cents (10.6 per cent) over the course of the week but, significantly, down on the intra-day high perhaps indicating that investors are wary of a company which is becoming too embroiled in an ownership struggle leaving no-one to keep an eye on the shop.

Minews. An interesting observation. Perhaps you’re alluding to the tailings dam spill at Consolidated’s Woodie Woodie mine.

Oz. Precisely. Attentive management does not let a tailings dam overflow.

Minews. Enough of that saga. Let’s move through the market.

Oz. Righto. The gold sector, which attracted so much interest two weeks ago, remained interesting despite the slide in the gold price. The two best performers were Perseus Mining (PRU) which we took a close look at mid-week because of its success in Ghana. It added A21 cents (22 per cent) to A$1.16, after trading as high as A$1.30 early in the week. Maximus Resources (MXR) joined the ranks of gold stocks to report good drilling results with encouraging results from its Bird In The Hand project near Adelaide, adding A3.5 cents (9 per cent) to end the week at A42 cents, well down on its Friday high of A47 cents.

While we had two new leaders in the gold sector it’s worth looking back at last week’s report which covered five stand out performers. As is always the case no sooner had anyone noticed an upward move than sellers moved in. Barra (BAR), which led the way when we last spoke, slipped A11 cents (16.4 per cent) to A56 cents, still well ahead of a month ago, but down nevertheless. Andean (AND) drifted by A4.5 cents (4.5 per cent) lower to A95.5. Alkane (ALK) lost A3 cents (6.6 per cent) to A42 cents, and Carbine shed A7c (16.3 per cent) to A36 cents. Apex (AXM) was the only member of last week’s famous five to swim against the tide, adding a lowly A1 cent to A89 cents.

Minews. Time to rattle through a few more prices.

Oz. In no particular order, the nickel sector had a bruising week as the nickel price continued to retreat. Jubilee (JBM) lost A$1.27 (7.4 per cent) to A$15.95, Sally Malay fell A22 cents (5 per cent), and Western Areas slipped A14 cents (2.8 per cent to A$4.83. Mincor (MCR) held up better, easing A9 cents (1.8 per cent), to A$4.70.

The iron ore stocks also had a tougher time. Fortescue (FMG) felt the heat of its latest cost blow-out, dropping A$3.55 (9.4 per cent) to A$33.80. Cape Lambert (CFE) was down A7 cents (9 per cent), Grange (GRR) also lost A7 cents (3.3 per cent) to A$1.99, and Atlas (AGO) was off A6c cents (4.2 per cent) to A$1.38.

Minews. Any special situations worth noting.

Oz. Yes. TNG (TNG), the old Tennant Creek gold which has turned itself into a zinc hunter, was a bit of a star during the week, rising A17 cents (18.7 per cent) to a close of A$1.08, after peaking at A$1.12 on Friday. Vulcan (VCN), which we’re planning to take a closer look at, was up A6 cents (12.5 per cent) to A54 cents, and yet another new uranium float, Atom Energy (AXY) joined a very crowded sector with its A30 cent shares delivering a double-your-money experience for lucky punters. The stock first traded at A55 cents, peaked on Thursday at A76.5 cents, and closed the week at A61 cents.

Minews. The boom goes on. Thanks Oz.

 

[drillinto]

That Was The Week That Was … In Australia
July 08, 2007

Source: www.minesite.com/aus.html
[The registration to this site is free]

By Our Man In Oz


Minews. Good morning Australia, your mining sector seems to have made a flying start to your new financial year.

Oz. Yes, though the strength in the market was really as much the result of a bit of financial engineering as enthusiasm for mining shares. Before getting down to prices perhaps a bit of an explanation is required for a surprising 5.3 per cent lift in the mining and metals index.

Firstly, the index is dominated by the big two, BHP Billiton (BHP) and Rio Tinto (RIO). They both traded up to new 12-month highs of A$37.60 and A$102.79 respectively on Friday. They closed a few cents off those peak prices but their weight in the index did all the heavy lifting. Secondly, a wall of cash hit the market last week thanks to new superannuation rules which provided a special one-off tax benefit to anyone making a contribution of up to A$1 million into their pension or superannuation fund before June 30. Thirdly, that tax rule saw A$10 billion flood into the pension system, and fund managers then had to do something with it and two of the best bets on the market are BHP Billiton and Rio Tinto, along with other blue chip stocks.

Minews. Interesting, but did the extra cash help the rest of the mining sector.

Oz. It doesn’t look like the pension fund cash went far beyond the big two. The best action elsewhere came from rumoured and actual corporate activity, continued interest in the iron ore sector and the return of buyers to the nickel and copper sectors.

Minews. Corporate games first, please. They’re always interesting.

Oz. Oxiana (OXR) and Zinifex (ZFX) were strongly rumoured to be getting together in some way, though it remains uncertain as to who bids for whom, and who finishes up on top. Speculation of a move pushed Zinifex up to a 12-month high of A$20.34 during Friday trade, before the stock ended the week at A$20.22, for a gain of A$1.40 (7.4 per cent). Oxiana also traded up to a 12-month high of A$3.93 on Thursday, before easing back to end the week at A$3.74, which was a gain of A21 cents (5.9 per cent), but it is worth noting that the stock was noticeably weaker in late Friday trade, shedding A15 cents (3.9 per cent) towards the bell.

Minews. And that other interesting battle you have between Consolidated Minerals (CSM) and Territory Resources (TTY).

Oz. Lots of words and manoeuvring but not a lot to show on the market. Consolidated, which is the target of twin bids, one from a private equity syndicate led by ex-BHP chief executive, Brian Gilbertson, actually fell A6 cents (1.9 per cent) to A$3.08 in reasonably heavy trading. Territory, the vehicle being used by ex-Consolidated chief executive, Michael Kiernan, fell back to earth with a bit more of a thump, shedding A29 cents (19.6 per cent) to A$1.19.

Minews. You’ll probably have a lot more to say about that rather messy situation in the coming weeks.

Oz. There’s no doubt about that, though it must be said that until someone does a better job of explaining exactly what all the fuss is about Consolidated remains a somewhat lacklustre manganese miner without a great vision for the future.

Minews. Good point. Now, let’s get on with the prices.

Oz. A call of the cards, sector by sector, shows that the iron ore stocks were back in favour thanks to fresh reports of yet another increase in the iron ore price, making it six years in a row that steel mills have agreed to higher prices. Fortescue (FMG) was the traders favourite again, rising A$3.70 (10.9 per cent) to A$37.50 despite rattling the tin for more cash. The George Jones twins, Gindalbie (GBG) and Sundance (SDL) benefited from his marketing tour of London and North America. Gindalbie added A18 cents (17.6 per cent), down slightly on the 12-month high of A$1.26 reached on Tuesday. Sundance also hit a new high of A53.5 cents on Friday, but closed at A50.5 cents, up A4 cents (8.6 per cent). Other iron ore players were in favour. Atlas (AGO) rose A12 cents (8.7 per cent) to A$1.50, and BC Iron (BCI) gained A3 cents (1.5 per cent) to A$1.93 after announcing a marketing agreement with Fortescue.

The nickel sector saw Mincor (MCR) respond to a stabilised metal price by adding A20 cents (4.3 per cent) to A$4.90. Jubilee (JBM) rose A96 cents (6 per cent) to A$16.91. Western Areas (WSA) gained A12 cents (2.5 per cent) to A$4.95, and Minara (MRE) was up A16 cents (2.2 per cent) to A$7.44 despite issuing a production downgrade.

Minews. Much else to report?

Oz. Just one more point. The gold sector remains curiously active despite a modest fall in the U.S. dollar gold price over the week, and a more hefty fall in the Australian price thanks to the Aussie dollar hitting a new 18-year high of US86 cents during the week. The lower price claimed a victim in Wedgetail (WTE) which has delayed its Nullagine project, paying the price with a fall of A3.5 cents (28 per cent) to A9 cents, but other gold stocks managed modest rises. Equigold (EQI) was up a sharp A14.5 cents (7.9 per cent) on Friday to close the week at A$1.98. Dragon (DRA) was up A1 cent (9 per cent) to A12 cents after announcing a production start in Finland, and Troy (TRY) gained A2 cents (1 per cent) to A$2.43.

Minews. Thanks Oz.

 

[Boyou]

Hi drillinto,

Thanks for keeping this thread going.I do happen to receive the updates..albeit sometimes 12 hours delayed.

Have been wondering why the "mining focussed" folk have not been posting on here.Ideal general discussion opporunity I would have thought it would be good fodder!
Have recently bought some smallcap miners..and totally happy to see what unfolds.

Absolutely NO IDEA who the journo is

C'mon Miners ....your thoughts?

 

[drillinto]

July 15, 2007

That Was The Week That Was … In Australia
Source: www.minesite.com

By Our Man In Oz

Minews. Good morning Australia, another strong week?

Oz. Very much so. Corporate activity, iron ore and a splash of exploration success dominated events on the upside. On the downside there was a touch of nervousness around some metal prices with uranium and nickel looking weaker and knocking the gloss off a few stars, while in the background a wall of fresh floats is gathering.

Minews. By corporate action you presumably mean Rio Tinto (RIO) and Consolidated Minerals (CSM)?

Oz. Precisely. The proposed marriage of Rio and Alcan was the big deal of the week, and no doubt well reported by the daily media in your part of the world. Down this way it occupied a lot of the chatter, though it was really the expectation that BHP Billiton (BHP) would join in the game with a bid for Alcoa which generated most market interest, pushing BHP to a record high of A$39.79 on Friday, before closing at A$39.16, up A$1.62 (4.6 per cent). Rio, on the other hand, dropped a modest A75 cents to A$101.30.

Minews. What we really want to know is how did the games of the big boys affect the rest of the mining market?

Oz. The rub off was quite interesting. Alumina (AWC), which was once the alumina division of the old WMC, hit an all-time high of A$8.88 on Friday, before closing at A$8.55, for a gain of A60 cents (7.5 per cent). Alumina, by the way, is the only locally listed entry into the very tight world of bauxite mining and aluminium manufacture.

The other big-ticket possibility remains the rumoured merger of Zinifex (ZFX) and Oxiana (OXR). There was no fresh news, just intense interest among investors for what is being hailed as marriage made in heaven. Oxiana added A17 cents (4.5 per cent) to close at A$3.91, but did hit a 12-month high of A$4.05 during Friday trade. Zinifex reached its 12-month high of A$21.60 on Monday, before closing at A$20.60 for a modest gain of A38 cents (1.8 per cent).

The Consolidated Minerals situation, which is more to your taste, built a nice head of steam with more words tossed around, and a little action. The target itself pleased the market with a better than expected quarterly report and forecast of strong profits ahead. That helped lift the stock to a 12-month high of A$3.29 on Friday, before it eased to a close of A$3.26, up A18 cents (5.8 per cent). Territory Iron (TTY), the vehicle being used by ex-CEO Michael Kiernan to try and crash the merger party organised by ex-BHP boss, Brian Gilbertson, struggled to hold market support, slipping A9 cents (7.5 per cent) to A$1.10.

Minews. Are you expecting the final act in the ConsMin drama next week?

Oz. Perhaps not. Kiernan has said he’s thinking about a bid, and has aired possible prices, but is yet to submit a formal proposal. Consolidated said on Friday that it was waiting on Kiernan to move, and if he did a meeting to vote on the Gilbertson merger would be postponed.

Minews. Messy stuff. Let’s move on to something simpler, such as your over-heated iron ore sector?

Oz. You say it’s over-heated, and that’s understandable. But during the week we had a fresh forecast of another big upward move in the iron ore price. This time it was UBS which stunned the market with a tip that the price would rise by 25 per cent at settlement talks later in the year.

The result of that was another upward run by Fortescue Metals (FMG), which topped the A$40 mark again, before closing the week at A$39.95, up A$2.45 (6.5 per cent). What made the rise particularly impressive is that Fortescue announced a US$300 million institutional placement, which is good news in that institutions are signing up for the stock, but might well signal a precursor step to raising more debt.

Elsewhere among the iron stocks it was all good news. Atlas (AGO) despite a setback in the form of a longer-than-expected environmental review process, rose A5 cents (3.3 per cent) to A$1.55. Gindalbie (GBG) hit a 12-month high of A$1.52 on Friday before easing to close at A$1.42, up A22 cents (18.3 per cent). Cape Lambert (CFE) added A2 cents (2.9 per cent) to A69 cents, and a newcomer to the iron ore sector, Crusader Holdings (CAS) reported encouraging assays at a project in Brazil, and rose A4 cents (4.8 per cent) to A87 cents.

Minews. You mentioned exploration success?

Oz. A couple of good results. Copper Strike (CSE) reported a hit of 6.5 per cent zinc over five metres at its Bloodwood Knoll project in North Queensland, and added A6.5 cents (10.6 per cent) to A67.5 cents. Regis Resources (RRL) rose to a 12-month high of A15 cents on Tuesday before closing up A2.5 cents (20.8 per cent) at A14.5 cents after reporting excellent gold grades at its Moolart Well project in Western Australia. Best assay was 23.68 grams a tonne over seven metres, with a one metre slice of that hit grading 383g/t, and Andean Resources (AND) continued to report good gold grades from its drilling in Argentina, rising A3 cents (3 per cent) to A98 cents – though at one stage on Friday the stock traded up to A$1.05.

Minews. Time’s short, much on the downside?

Oz. Kimberley Diamond (KIM) was the big loser for the week after copping a sell advisory from Goldman Sachs. That rather critical note saw a mass exodus from the stock, and its close associate Blina Diamonds. Kimberley fell A17 cents (26 per cent) to close at A48 cents, which was A3 cents up on the Friday (and 12-month) low of A45 cents. Blina was hit even harder, dropping A12.5 cents (28 per cent) to A31.5 cents.

Minews. Ouch!

Oz. Yes, very ouch. Perhaps a final word now on the float situation because it seems there is no sign of an end to that part of the fund-raising game. At last count there were 17 new mining offerings making their way through the stock exchange listing process, which should provide us with more to talk about as the year progresses.

Minews. Hope you don’t run into the same problem as AIM. Too may moderate companies come on the market and then don’t perform. Investors get fed up and liquidity drops. This affects all juniors and you get a bit of a hiatus. Let’s keep a very critical eye on the newcomers.