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

[drillinto]

May 24, 2008

That Was The Week That Was … In Australia
By Our Man in Oz => www.minesite.com

Minews. Good morning Australia. How was your week?

Oz. Mixed. Iron ore and coal stocks led the way up, and uranium played a cameo role as a beneficiary of the high oil price. Gold stocks were generally higher, but base metals weakened. Overall the Australian mining market was down about one per cent, but most of that was because the recent strength in BHP Billiton and Rio Tinto has now run out of puff.

Minews. Let’s start with the bulk commodities as they seem to be reaping the benefits of Chinese demand.

Oz. They do, though the most interesting news this week among the bulks was the entry into the Australian market of an Indian-led business, ArcelorMittal. ArcelorMittal splashed out A$630 million for a 14.9 per cent stake in Macarthur Coal (MCC). One of the vendors was Macarthur’s founder, Ken Talbot, who’s facing a few legal challenges and is working on an exit strategy. The arrival of ArcelorMittal effectively cuts Xstrata out of the bidding for Macarthur, but shareholders weren’t worried. Macarthur shares hit an all-time high of A$20.98 on Wednesday, before easing to close on Friday at A$19.85, up A$2.10, or 11.8 per cent, at A$19.85. A year ago, you could have loaded up with Macarthur shares at A$5.50.

Other coal stocks joined in, some with rises even stronger than Macarthur’s. Felix Resources (FLX) soared on Friday to an all-time high of A$20.85 as speculation about a possible takeover bid grew. Felix eased marginally at the end of the week to close at A$20.10, but that was still up A$3.19, or 18.8 per cent, on the week as a whole. A year ago, Felix was trading at A$5.20. Centennial Coal (CEY), meanwhile, rose A57 cents, or 12 per cent, to A$5.30, and Riversdale (RIV) rose A99 cents, or 11.4 per cent, to A$9.70. One of the few coal stocks to swim against the trend was Coal of Africa (CZA) which slipped A12 cents to A$3.75. That ended a strong run from the company which is perhaps now starting to be discounted because of the fresh outbreak of racial strife in South Africa.

Minews. Iron ore next, because that still seems to be powering along.

Oz. It is, and the pace of deals is also accelerating. During the week one of the local favourites, Aquila Resources (AQA), announced that it was splitting up its production and exploration arms. No-one seems quite sure what that actually means but Aquila’s chairman, Tony Poli, reckons it will unleash unrecognised value from the exploration assets. On the market, Aquila rose A$1.22 to A$15.45, and Poli cemented his position as Australia’s latest billionaire.

Epsilon (EPS), which was better known as a uranium hopeful until last week demonstrated how hot, or perhaps even overheated, iron ore has become. On Wednesday it announced it was “looking for” one billion tonnes of iron ore at its Mardie project in Western Australia. That was enough to drive the stock up from A17 cents to A87 cents in a matter of minutes, a 411 per cent gain which told seasoned observers of the Australian market that we have now entered the sharp end of a highly speculative boom. Epsilon later clarified its statement, acknowledging that it hasn’t actually done any drilling yet, and the price retreated to A36.5 cents. Those wild movements produced this fabulous equation: the shares were up A20.5 cents, or 128 per cent, on the week, but down A31.5 cents, or 46.3 per cent, on Friday. It’s fun, but is it investment?

On a more serious note, FerrAus (FRS), which is proving up a high-grade haematite orebody adjacent to BHP Billiton’s flagship Mt Newman mine in Western Australia, performed strongly, rising A19 cents, or 13.6 per cent, to end the week on a 12 month high of A$1.59. Other upward moves worth noting included Gindalbie (GBG), up A15 cents, or 12.4 per cent, to A$1.36; BC Iron (BCI), up A24 cents, or 15.9 per cent, to A$1.75; and the sector leader, Fortescue Metals (FMG), up A27 cents to A$9.56, a closing price which was down on the all-time high of A$9.98 reached during earlier trade on Friday. If not for last year’s 10-to-one share split Fortescue would be within a whisker of A$100 a share.

However, as interesting as Fortescue is, there are an increasing number of analysts starting to pick up on a point made here last week about how the stock may well be a classic example of why it can be better to travel than arrive. Having proved that it can run a mine, a railway, and a port, Fortescue how has to prove that it can run a business.

This more critical approach to iron ore, and especially to companies that are proposing to build high cost magnetite processing operations, with their higher levels of fuel consumption, was demonstrated in a number interesting share price falls during the week. Grange Resources (GRR) was hammered on Thursday and Friday, dropping A16 cents, or 10.6 per cent, over those two days, to end the week at A$1.35. The fall is not only against the run of play, but takes Grange to less than half the A$3 price reached last August.

Minews. We’re running out of time. Let’s move to the gold sector, then base metals, uranium and any specials, please?

Oz. Best of the gold stocks was Resolute (RSG), which we took a look at last week. It rose A21 cents, or 10.6 per cent, to A$2.19. Kingsgate Consolidated (KCN) rose A20 cents to A$5.69, continuing what has been a significant upward re-rating over the past few weeks. Lihir (LGL) rose A25 cents to A$3.35, and Silver Lake (SLR) returned to favour with a rise of A3.5 cents, or 10.3 per cent, to A37.5 cents.

Nickel, copper and zinc stocks were generally weaker, in line with the metals markets. Among the nickels, Western Areas (WSA) finally slipped back after a spectacular three month upward run. It fell A63 cents to A$11.02. Sally Malay (SMY), meanwhile, eased back A86 cents, or 14.5 per cent, to A$5.05, and Mincor slipped A12 cents to A$3.38. Going against that trend was takeover target Albidon (ALB), which rose A43 cents, or 10.9 per cent, to A$4.37.

Oxiana (OXR) headed a weaker crop of copper stocks, dropping A21 cents to A$3.30. Also among the fallers, Kagara (KZL) dropped A65 cents, or 11.3 per cent, to A$5.10, while CBH was off a sharp A4 cents, or 11.6 per cent, and closed at A30.5 cents.

Uranium stocks were interesting because most rose, even though there was no reported movement in the price of uranium. Paladin (PDN) rose A47 cents to A$5.87. Toro (TOE) rose an even more impressive A10 cents, or 37.7 per cent, to A36.5 cents. Wildhorse (WHE) rose A5.5 cents to A$72 cents, and Uranex rose A5.5 cents, or 11.5 per cent, to A53.5 cents.

The only special of note was an aggressive takeover bid for drilling specialist Ausdrill (ASL) by mining contractor Macmahon Holdings. Macmahon launched an all-scrip bid, pushing Ausdrill shares up by A72 cents, or 38.7 per cent, to A$2.58. That sounds like a good price but it’s actually less than the 12 month high of A$2.86 that Ausdrill hit in June last year.

Minews. Thanks Oz. Keep an eye on those uranium stocks, you might be seeing the first stirrings of a fresh upward move by the sector.

 

[drillinto]

May 31, 2008

That Was The Week That Was … In Australia

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

Minews. Good morning Australia, it looks like a somewhat rougher week for your miners?
Oz. It was, though once again most of the damage was done by the slide in the value of the very big companies. BHP Billiton and Rio Tinto both came down with a thump, as they would have in London. The difference is that in Australia those two companies get a disproportionately heavy weighting in the metals and mining index. The result was that the metals and mining index dropped by 6 per cent over the week while some of the stocks we routinely follow went up quite strongly.

Among the sectors a snapshot looks like this; gold mixed but generally stronger, base metals down, but with a few upward moves mainly thanks to a dash of corporate activity, coal mixed, iron ore generally up with some quite strong moves, and uranium showing more signs of life after a 12-month slumber.

Minews. Let’s start with iron ore again because that seems to be the Australian favourite this year.

Oz. It certainly is, and much of the credit for that goes to the way in which Fortescue Metals Group (FMG) has successfully created a viable rival to BHP Billiton and Rio Tinto. During the week FMG’s exuberant chief executive, Andrew Forrest, was in the news for two reasons. First came his travel to Shanghai to greet FMG’s first shipment of 170,000 tonnes of iron ore. Then came his naming as Australia’s richest person, knocking off media and casino king, James Packer. On the market, FMG continued to deliver for investors, adding another A$1.09 (11.4 per cent) to close the week at A$10.65. Given that the company split its shares on a 10-for-one basis last year it is now above A$100 per share on a pre-split basis.

Elsewhere among the iron ore stocks there were a number of star performances. Gindalbie (GBG), which we took a look at a few days ago because of its fresh focus on the fast cash-flow possible from developing a bigger haematite operation, added A29 cents (21.3 per cent). Part of that rise can be attributed to a tour by Australian analysts of the operations of Gindalbie’s Chinese partner, AnSteel, and the very encouraging comments made by AnSteel executives.

Other reasonable upward moves among the iron ore stocks came from Atlas Iron (AGO, which added A30 cents (7.9 per cent) to A$4.10 after reporting the acquisition of additional exploration tenements. FerrAus (FRS) rose A31 cents (19.4 per cent) to A$1.90 after announcing fresh exploration success near BHP Billiton’s big Mt Newman mines, and Grange Resources (GRR) continued to recover after a period in the doldrums, rising A25 cents (18.5 per cent) to A$1.60. Golden West Resources (GWR) was another stock to attract interest amid speculation that it might soon received fresh attention from its major new U.S. shareholder, Cleveland Cliffs. On the market, Golden West rose by A48 cents (29.6 per cent) to A$2.10.

On the negative to downside Cape Lambert (CFE) showed little sign of movement despite a Chinese investor winning government approval to buy the company’s namesake project. On the market, Cape Lambert traded at a steady A62 cents. Another stock not moving despite hitting the news was Jupiter Mines (JMS). During the week the Brian Gilbertson-led Pallingh

Minews. Coal now and then move across to the base metals and gold.

Oz. Coal just gets hotter thanks to ArcelorMital’s move into Macarthur Coal (MCC) though last week the action shifted to other stocks, probably in the belief that they will be the next takeover targets. Felix Resources (FLX) shot up another A$3 (14.9 per cent) to A$23.10. Coal of Africa (CCZ) rose A30 cents (8 per cent) to A$4.05, and Riversdale (RIV) added A$1.10 (11.3 per cent) to A$10.80 on news that Macarthur founder Ken Talbot had acquired a 6 per cent stake in the stock. Macarthur itself eased a marginal A20 cents (1 per cent) to A$19.65.

Base metal stocks, as mentioned earlier, produced most of the week’s losers, with a few exceptions. Let’s get the bad news out of the way first. Oxiana (OXR) was hit by lower metal prices and news of a small fire at its Sepon copper plant. Those two events cost the company A24 cents (7.2 per cent) as it fell to A$3.09. Oxiana’s merger partner, Zinifex (ZFX) also slithered lower, shedding A78 cents (7.6 per cent) to A$9.50. Kagara (KZL) was another copper/zinc play to lose altitude despite good news from site. It fell A20 cents (4 per cent) to A$4.90, and CBH (CBH) eased back a modest half-a-cent to A29.5 cents.

Nickel stocks, apart from a few exceptions, were also hit by the sliding price of the metal. Despite talk of a takeover moves Sally Malay (SMY) slipped A25 cents (5 per cent) lower to A$4.80, while another takeover favourite, Albidon (ALB) went the other way rather rapidly, adding A73 cents (18.7 per cent) to A$5.10. Elsewhere among the nickels it was a gloomy sight. Mincor (MCR) slipped A18 cents (4.7 per cent) lower to A$3.22. Western Areas (WSA) ran out of steam after a few remarkable weeks, ending the week at A$10.07, down A95 cents (8.6 per cent), while Minara Resources (MRE) fell a very sharp A87 cents (15.5 per cent) to A$4.74, perhaps reflecting the higher costs it is facing for both fuel and sulphur used extensively in its laterite ore processing plant.

Minews. Gold stocks now, please?

Oz. One or two good moves, but not real fire in the sector. Resolute (RSG), which we looked at last week was the star of the sector, adding A38 cents (18.4 per cent) to A$2.55, a sign that interest is building in the stock as it gets closer to re-starting the Syama project in Mali. Andean Resources (AND) also performed well thanks to a steady flow of positive news from its Cerro Negro project in Argentina with the shares rising A24 cents (14.7 per cent) to A$1.87. Sino Gold (SGX) was the third riser of note, adding A34 cents (8.4 per cent) to A$5.66, but most other moves were modest, either way. Troy (TRY) gained A3 cents to A$2.35. Dragon Mountain (DMG) lost A3 cents to A42 cents and Kingsgate (KCN) slipped A9 cents lower to A$5.60 after a very strong month.

Minews. Keep an eye on Kingsgate, it seems to be in recovery mode?

Oz. Will do. I might be speaking with the managing director, Gavin Thomas, next week.

Minews. Any final news, or specials.

Oz. Uranium continues to show signs of fresh life, but without a definite trend developing yet. Wildhorse (WHE) was up A13 cents (18 per cent) to A85 cents, and Toro (TOE) was up A2 cents (5.5 per cent) to A38 cents, but Uranex (UNX) was down A3 cents (5.6 per cent) to A50 cents, Bannerman (BMN) was down A7 cents (3.5 per cent) to A$1.93, and Extract (EXT) was down A1 cent to A$1.15.

Minews. Thanks Oz. Will speak to you early next week.

 

[drillinto]

June 08, 2008

That Was The Week That Was … In Australia

By Our Man In Oz
www.minesite.com

Minews. Good morning Australia, how did your market hold up in a fairly tough week?
Oz. Surprisingly well considering the depth of global gloom. Overall, the metals and mining index slipped a very modest 0.5 per cent, a sign that rises roughly equalled falls. Next week, however, could be much more interesting because we’re likely to see a clear gap open between Australia’s commodity-based economy and the manufacturing economies of Europe and the U.S. Those record oil prices posted on Friday, plus higher precious and base metal prices, will flow directly into ASX-listed stocks when the market opens on Tuesday after our version of the Queen’s Birthday public holiday on Monday.

Minews. You don’t think your west coast gas shortage will hurt?

Oz. It probably will, but not for long. Most of the damage will be in the form of higher costs as miners are forced to switch from natural gas to diesel, but that cost should be largely absorbed by higher metal prices. That’s why we didn’t see too much damage done when the gas plant on Varanus Island blew up. Companies directly affected fell, but not a lot. Iluka (ILU), the big titanium minerals producer slipped A7 cents (1.8 per cent) to A$3.62. Oxiana (OXR) after initially moving up closed the week at A$2.97, down A12 cents (3.8 per cent) for the week, and the small copper miner, Jabiru (JML) lost A10 cents (12.2 per cent) to A72 cents, a price which might cause some problems with a A$52 million capital raising announced a week before the gas outage with new shares to be issued at A82 cents.

Minews. Fingers crossed that the issue was thoroughly bedded down before the gas was turned off. Let’s move through the sectors now, starting with what looks like bad news in the base metals sector.

Oz. True. Not a pretty sight, with some brokers turning quite sharply against the traditional base metal leader in the Australian market, nickel. Goldman Sachs went as far as to recommend selling three of the leaders, Western Areas (WSA), Minara (MRE) and Independence (IGO). That advisory note, which was widely-reported in the daily news media, did its job with Minara falling a very sharp A88 cents (18.6 per cent) to A$3.86. Independence dropped A$1.05 (16.3 per cent) to A$5.40, and Western Areas lost A40 cents (4 per cent) to A$9.67. Minara’s fall was the harshest of all because it is a Varanus gas customer, and a big user of sulphur in its treatment process and the price of sulphur has risen sharply this year.

Other nickel stocks also suffered in the sell-off, but not as badly. Mincor (MCR) lost A12 cents (3.7 per cent). Albidon (ALB) fell A78 cents (15.3 per cent) and Kagara (KZL), which is better known as a zinc and copper producer, slipped A5 cents (1 per cent) to A$4.85. The reason Kagara is included is that during the week it reported excellent assays from its Lounge Lizard nickel exploration project which is adjacent to Western Areas promising Spotted Quoll discovery.

Minews. If nothing else you guys certainly come up with some bizarre names for your projects.

Oz. We do, but at least we’re having fun as well as making money. Moving on to other parts of the base metals complex we saw zinc and copper stocks slip lower. Zinifex (ZFX) eased back by 17 cents (1.8 per cent) to A$9.37. CBH (CBH) lost A4 cents (13.7 per cent) to A25 cents, a closing price which was A1 cent above the 12 month low of A24 cents reached on Wednesday. CBH’s merger partner, Perilya (PEM) fell even harder, shedding A21 cents (24.4 per cent) to A65 cents.

Minews. Time for some good news. Let’s go through the iron ore, coal and gold sectors, and any specials, please

Oz. Iron ore was curiously mixed last week. The sector darling, Fortescue Metals Group (FMG) ran out of puff after a spectacular upward run. Officially, it dropped A65 cents (6.5 per cent) to A$10, but on Wednesday it traded up to an all-time high of A$12, so you could argue that it fell 16.6 per cent over the last two days of the week. Other iron ore stocks to lose ground included: Atlas (AGO), down A34 cents (8.3 per cent) to A3.74, BC Iron (BCI), down A15 cents (8.7 per cent) to A$1.57, and Gindalbie, down A12 cents (7.3 per cent) to A$1.53.

Going up we had Cape Lambert (CFE) add A5 cents (8 per cent) to A67 cents. Interest in the stock was fuelled by rumours that one of your favourite Russians, Roman Abramovich, of Chelsea Football Club fame, is poised to emerge with a 13 per cent stake in Cape Lambert via a complex option exercising move. Sundance Resources (SDL) was another iron ore play returning to the limelight after a long stay in the doghouse. It added another A4 cents (10.8 per cent) to A41 cents, and IMX Resources (IXR) continued to please its patient followers with an increase of A6 cents (10.2 per cent) to A65 cents on news that it has started a trial dig at its Cairn Hill iron and gold project.

Most coal stocks continued to perform well, with once notable exception, Felix Resources (FLX). It dropped a very sharp A$3.45 (14.9 per cent) to A$19.65. Offsetting that fall was a modest A30 cent (1.5 per cent) rise by Macarthur Coal (MCC) to A$19.95, and a very strong performance by the AIM-listed Caledon Resources (CCD) which raised a fresh A$15 million at A$1.10 as part of obtaining an ASX quote. Caledon shares opened down here at A$2.90, a handsome profit for stags, before ending its first week at $A2.67, up A$1.57 (143 per cent) on the issue price.

As part of the overall coal industry we have been watching some red-hot trading in coal-seam gas stocks, a sector which seems to be in a half-way house between mining and the petroleum industry. Of particular interest are two underground coal gasification hopefuls, Metex (MEE) and Linc Energy (LNC). Metex added A15 cents (23.6 per cent) last week to A78.5 cents, and Linc rose A$1.10 (36.6 per cent) to A$4.10.

Minews. Gold and specials to finish, please.

Oz. A downward trend was again evident among the gold stocks. St Barbara (SBM) slipped A5 cents (8.2 per cent) lower to A56 cents. Kingsgate (KCN) shed a modest A5 cents (1 per cent) to A$5.55 after a very strong upward move. Troy (TRY) eased back another A20 cents (8.5 per cent) to A$2.15 and Centamin lost A4 cents (3 per cent) to A$1.29.

The only specials worth mentioning where the phosphate stocks which have been somewhat of a speculator’s favourite thanks to rising global fertiliser demand. Last week saw more hectic activity with sector leaders Minemakers (MAK), Uramet (URM) and South Boulder (STB) continuing to rise. Minemakers added A22 cents (12.7 per cent) to A$1.94. Uramet rose A2 cents (13.3 per cent) to A17 cents, South Boulder gained A9 cents (32 per cent) to A37 cents.

Minews. Thanks Oz.

 

[drillinto]

August 02, 2008

That Was The Week That Was … In Australia
By Our Man in Oz
www.minesite.com/aus.html

Minews. Good morning Australia. Was there much excitement on your market last week?

Oz. Not really. Everyone here seems to be doing the “eggshell” walk, while holding crossed fingers behind their back. Most share price moves last week were pretty flat, either way. A body count shows roughly half those which did move went up, and half down while the metals and mining index (XMM) actually rose by a somewhat misleading 4.3 per cent, with almost all of that attributable to the top end stocks, BHP Billiton (BHP) and Rio Tinto (RIO), although a couple of other major producers chimed in with upward moves. Iluka (ILU) and Alumina (AWC) offered interesting examples of institutional funds seeking to build positions in two late entrants in the China story.

Minews. Now that is interesting, because it appears to indicate that professional investors believe demand from China for minerals and fuel will re-start the upward price run after the end of the Olympic shutdown.

Oz. It’s looking a bit that way, but you would also say there’s a degree of wishful thinking. Iluka is the interesting player in this “late blooming” game because its products, titanium minerals and zircon, are traditionally late movers in the commodity cycle. Over the past week it rose an eye-catching A64 cents, or 14.7 per cent, to A$4.98, and briefly popped above the A$5.00 mark for the first time since October last year. To put Iluka’s run into an even brighter light, this is a stock which was trading as low as A$3.04 in mid-June, so the upward run since that low amounts to A$1.94, or 63.8 per cent.

Minews. How very interesting. And Alumina has been performing as strongly?

Oz. Not quite as strongly, but it was up A12 cents to A$4.50 last week, mainly as a result of China’s aluminium production cuts, which, it has to be said, might prove to be temporary. Interestingly, both Iluka and Alumina could emerge as beneficiaries of another force in the Aussie market, the sliding value of the local dollar. After rushing headlong up to take a peek at parity with its US cousin, the Aussie sank last week all the way to US93.7 cents.

Minews. Alright. Let’s go through the sectors, starting with gold, please.

Oz. Not a lot to get excited about here, a point best made by a look at Newcrest (NCM), the sector leader, which opened and closed the week at A$28.95. It bobbled about a bit in between, briefly clearing the A$30 mark, and then slipping to A$27.70, before ending exactly where it started. Elsewhere among the gold stocks it was hard to find a winner. Centamin (CNT) was probably the best after it released more good news from its big Sukari project. Centamin added A7 cents to close at A$1.15. Silver Lake (SLR) was also in the black, creeping half a cent higher to A28 cents. After that came a long list of losers. Apex (AXM) fell A6 cents to A60 cents, Avoca (AVO) dropped A7 cents to A$1.81, Adamus (ADU) came back a rather sharp A5.5 cents, or 12.2 per cent, to A39.5 cents, and Allied Gold (ALD) did even worse with a fall of A7 cents, or 15.9 per cent, to A37 cents.

Minews. Presumably base metals were even less impressive.

Oz. Actually no. They seem to have passed through their price correction phase, allowing for a few exceptions either way. Among the nickel stocks, Panorama (PAN), the old Sally Malay, surprised with a rise of A11 cents to A$2.25, and Mirabela (MBN) was another nickel stock to deliver a strong rise, adding A35 cents to A$4.62 as it delivered new resource numbers. Albidon (ALB) managed a rise of A2 cents to A$2.52, but Mincor (MCR) lost A15 cents to A$1.72. Minara (MRE), meanwhile, continued to pay the price for higher fuel and sulphur costs, dropping A20 cents, or 10.4 per cent, to A$1.72.

Copper stocks produced a few interesting moments. There was a blast from the past from Bougainville Copper (BOC), which attracted investor interest as a tentative group of activists tried to urge management into doing something with its mothballed mine in Papua New Guinea. The publicity associated with some very pointed questions from these investors helped lift Bougainville by A17 cents, or 16.5 per cent, to A$1.20, though admittedly in very light trade, as the stock remains a captive of Rio Tinto. The other copper stock to hit the headlines was Citadel (CGG), one we haven’t heard much from before but which has a project in Saudi Arabia, and a new high-profile adviser in the form of Owen Hegarty, the man who made Oxiana. On the market, Citadel was up A1 cent to A28 cents.

Zinc stocks also produced a couple of promising moves, particularly from Silver Swan Group (SWN) which reported a rich copper-zinc discovery close to the Golden Grove zinc mine owned by OZ Minerals near the Australian west coast. More news will be released about the discovery at a media conference scheduled for Monday in Kalgoorlie, to coincide with the start of the annual Diggers & Dealers forum. Meanwhile, on the market, and despite a flat outlook for zinc, Silver Swan shot up a very impressive A33 cents, or 78.5 per cent, to close at A75 cents. That rise included one of A16 cents, or 27.1 per cent, on Friday alone.

Minews. That sounds like a positive start to Diggers & Dealers, but let’s leave that until next week, and finish off last week’s market.

Oz. The two bulk commodities, iron ore and coal, seemed to be moving in different directions. Coal stocks soared and iron struggled. Felix Resources (FLX) was the coal star, putting in a spectacular rise of A$4.31,or 24.5 per cent, to A$21.90, largely on takeover speculation. Other impressive movers were Riversdale (RIV), which added A$1.08, or 12.1 per cent, to close at A$9.98. Macarthur (MCC) did even better with a rise of A$2.18, or 16.1 per cent, while Whitehaven (WHC) rose A70 cents, or 20.4 per cent, to A$4.12.

Most iron ore stocks were flat to lower, with one stand-out performer in Portman (PMM), which is at the centre of what seems to be a twin takeover battle. Portman rose A$1.24 to A$18.27, but did hit an all-time high of A$18.62 on Thursday as its US parent, Cleveland Cliffs, became the centre of a struggle for control. Meanwhile Portman itself stepped up its move to gain control of Golden West (GWR), which ended the week steady at A$1.75. Elsewhere among the iron ore stocks, Atlas (AGO) slipped A2 cents lower to A$2.53, BC Iron (BCI) dropped A2 cents to A$1.11, and Territory (TTY) slipped A7 cents, or 10.6 per cent, lower to A59 cents. But the biggest loser for the week was Cape Lambert Iron Ore (CFE) which dropped A21.5 cents, or 26.7 per cent, to A59 cents amid fears that it is struggling to get a promised A$400 million cheque from the Chinese buyer of its Cape Lambert project. Meanwhile a Russian investor moved to secure control of Cape Lambert itself, in partnership with the Chinese.

Minews. Thanks Oz. What an interesting time you’re having on the corporate front. Enjoy Kalgoorlie.

 

[drillinto]

August 31, 2008

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 it was a better week among your mining stocks last week.

Oz. It was, thank you. The metals and mining index was up a comfortable three per cent, which was actually slightly less than the four per cent overall rise enjoyed by the all ordinaries index. Having said that it was actually rather difficult to define a trend. In every sector you can find stocks that rose, and stocks which fell, with very few extreme moves either way.

Minews. A little bit of normality is not a bad thing.

Oz. Quite right, and perhaps we are at last seeing the formation of the bottom of this bear market. But perhaps too, there aren’t yet many investors brave enough to take large positions. Just a small bite at a time. So let’s start this week by cheering everyone up with the best of the performers and then go for a stroll through the sectors.

The surprise of the week came from a stock we rarely mention, but which is a very good small performer, Jabiru Metals (JML). It rose an eye-catching 31 per cent, or A9 cents, over the week, to close at A38 cents, and apparently for the best of reasons. On Monday, the company presented at a mining conference in Melbourne and highlighted the low cost of production at its flagship Jaguar copper-zinc mine in Western Australia. Neither metal is in favour with investors at the moment but when Jaguar revealed a cost of US34 cents per pound of zinc-equivalent in July, now falling to less than US20 cents per pound, everyone took notice. The Jaguar mine suddenly looks a very profitable proposition, with a targeted output of 8,000 tonnes of copper next year, plus 30,000 tonnes of zinc.

Minews. The message from the market being that investors bought the production story, because that’s what this stage of the market is all about.

Oz. Precisely. If you’re in production, and have costs under control, you are going to be a winner as China re-starts its industrial engine after the Olympics party. Meanwhile, another base metal stock which caught the eyes of investors, but this time with a discovery story, was Azure Minerals (AZS), which reported bonanza grade copper at its Promontorio prospect in Mexico. Assays of up to 46% copper from thin veins of a thickness of about half a metre helped push the stock up 17.8 per cent, or A2.5 cents, to A16.5 cents. Also on the up was Citadel Resources (CGG), the Saudi copper play which has attracted the attention of ex-Oxiana boss, Owen Hegarty. Citadel was 11.5 per cent, or A3 cents, to the good at A29 cents.

Minews. Those look interesting moves from a few of the base metal stocks, so let’s start the sector-by-sector round-up in that area and then roam across the bulks and precious metals areas.

Oz. Finishing with copper and zinc, it was interesting to see Perilya (PEM) manage a very modest A1 cent rise to A53 cents, in a week when it hung all its dirty linen out on the line by reporting a net loss from its Broken Hill zinc operations of A$22.1 million, and an impairment write-off of A$188.2 million caused by the mass sackings and production cut-backs aimed at getting costs down. At its closing price for the week Perilya is now A13.5 cents, or 34 per cent, up on its 12 month low of A39.5 cents set in early August, perhaps another straw in a fairer wind. Other copper and zinc stocks performed less well. OZ Minerals (OZL) fell A13 cents to A$1.75, Kagara (KZL) slipped A14 cents to A$3.13, and Anvil (AVM) dropped A30 cents to A$7.70. Nickel stocks were mixed, but trending up. Independence (IGO) added A23 cents to close at A$3.30, Minara (MRE) rose A15 cents, or 10.7 per cent, to A$1.55, and Albidon (ALB) put on A5 cents to close at A$2.19. On the way down, we saw Mincor slip A10 cents to A$1.90, ending a strong recovery, and Panoramic (PAN) drop by A13 cents to A$2.19.

Minews. Iron ore and coal, and finish with gold, please.

Oz. Golden West (GWR) was the iron ore star attraction of the week, though for an odd sort of reason. At the company’s extraordinary meeting in Perth on Friday a fist fight broke out between warring factions. Some of those involved were from Fairstar Resources which tried to snatch control of Golden West last year. Sadly, your man in Oz missed the punch-up, but local media reports said about a dozen people were involved, with staff at the Hilton hotel called in to break-up the fracas which also involved tossing a few chairs across the meeting room.

Minews. What is it with you Aussies and hotels?

Oz. We enjoy the beer, that’s all. Anyway, the end result of the meeting was a stalemate. Portman (PMM) had been trying to insert a couple of its representatives onto the board, but seems to have failed. On the market, Golden West fell A30 cents, or 17.6 per cent, to A$1.70, though not because of the brawl, but more because Portman ended its top-up share buying which aimed to ensure that it retains a 20 per cent stake in its target.

Elsewhere among the iron ore stocks, Fortescue (FMG) rose a modest A31 cents to A$7.65 it announced a big preference share issue to fund its expansion plans. Atlas Iron (AGO) also moved ahead by a rather sharp A35 cents, or 18 per cent, to A$2.28, while Brockman (BRM) rose A23 cents, or 15.4 per cent, to A$1.72. On the way down, we saw Cape Lambert (CFE) drop A2 cents to A49 cents, and BC Iron (BCI) slip half a cent to A85.5 cents.

Coal stocks were generally stronger as the oil price rose, although the big exception was Macarthur (MCC) which fell A$1.05, or 7.3 per cent, to A$13.40. On the way up was Riversdale (RIV), which put in a rise of A84 cents to A$10.41, Coal of Africa (CZA), stronger by A10 cents at A$3.05, and Gloucester Coal (GCL) which rose A$1.43, or 13.9 per cent, to A$11.70.

Minews. Gold stocks to finish, please.

Oz. It was a better week for golds, with some encouraging upward momentum. Apex (AXM) reported good drill results from its Cascade project, and the stock responded by rising A9 cents, or 25 per cent, to A45 cents. Kingsgate (KCN) was also one of the better performers, A47 cents, or 10.4 per cent, to the good at A$4.97. Also stronger were Resolute (RSG), up A18 cents, or 12.7 per cent, to A$1.60, and Troy (TRY), which ended a few tough weeks with a rise of A19 cents to A$1.60. Westgold Resources (WGR) attracted a lot of interest with a series of excellent drill hits at its Rover project near Tenant Creek in the Northern Territory, news which propelled the shares up by A6 cents, or 18.7 per cent, to A38 cents. Most falls were modest. Silver Lake (SLR) posted the heaviest loss, slipping A2 cents to A19 cents, while Norton Goldfields dropped half a cent to A21 cents, and Tanami fell 0.4 of a cent to A3.5 cents.

Minews. Thanks Oz. Try and make it to the next Golden West meeting, and don’t forget to ask for a ringside seat.

 

[drillinto]

October 05, 2008

That Was The Week That Was … In Australia
By Our Man In Oz >>> www.minesite.com

Minews. Good morning Australia. Should we ignore the market and talk about sport today?
Oz. What a good idea, unfortunately I believe some of your readers might see last week as the “point of no hope” which signals that the bottom of a very painful share price slide is near. If it’s not then we might have nothing but sport to talk about in the future. Until then, let’s trawl through the wreckage and see who got clobbered hardest and who might have swum against a very fast moving tide.

In terms of good news, it was only to be found in a handful of gold stocks, one iron ore stock and one zinc stock. And, for finding those I believe I’ve earned a brownie point.

In terms of bad news, you can take your pick. Nickel and copper stocks were murdered as base metal prices finally succumbed to the awful outlook for demand in the industrial metals sector. Iron ore stocks, apart from Cape Lambert (CFE), retreated as fears grew that their day of reckoning approaches at the next price setting negotiations. Coal and uranium stocks joined in the withdrawal, and some of the speciality metals were slaughtered as the twin problems of falling commodity prices and the collapse of the banking sector made it perfectly clear that many of the grand plans of the past five years have been returned to the filing cabinet, and the new float game is officially dead after a trio of horrible debuts.

Minews. Let’s start with the big picture, and then move through the sectors, starting with gold as that seems to be the sector which has most to gain from what’s happening.

Oz. Overall, the metals and minerals index on the ASX dropped by 10 per cent, perhaps one of the biggest falls ever. Set against that was a modest 2.8 per cent slide in the all ordinaries index, and miniscule rise in the financials index, which was probably more of a rebound after weeks of falling. To put the mining sector into an even clearer focus Cape Lambert’s A5 cents (13.2 per cent) rise to A43 cents made it the top performing resource stock for the week, though largely because of corporate activity rather than a reflection of the overall iron ore market. CBH (CBH), the zinc stock to rise, was also pushed along by corporate interest after it lodged a hostile takeover bid for one-time merger partner, Perilya (PEM). CBH’s rise of half-a-cent (6.6 per cent) to A8 cents made it the fifth best performing resource stock. Its target, Perilya, fell A1 cent (3.2 per cent) to A30 cents.

Minews. Time for gold, and then the rest.

Oz. Apart from the sector leaders, Newcrest (NCM) and Lihir (LGL), Apex Minerals (AXM) was one of the better performers after completing a very rare capital raising and then locking in forward sales for more than half its forecast gold output for the next three years. Those two developments, plus an upbeat mid-week presentation at an investment conference by Apex chief executive, Mark Ashley, saw the stock trade as high as A48 cents, before easing to end the week at A42 cents for a gain of half-a-cent. Not much, but up nevertheless. Sub-Sahara (SBS) was another gold stock to rise modestly after fresh drill results from an exploration project in Eritrea. The stock added the smallest imaginable amount of one-tenth of a cent to A3 cents but, like Apex’s half-a-cent you take whatever rise you can these days.

Other gold moves were erratic, and while the results for the week were down there was interesting activity. Kingsgate (KCN), for example, lost A13 cents (2.6 per cent) to A$4.75 but was up slightly on Wednesday and then oscillated spectacularly on Friday, moving between a low of A$4.16, and the closing high of A$4.75. Other gold moves included Newcrest slipping A45 cents (1.6 per cent) to A$27.59 despite trading up to A$29.64 on Thursday. Lihir lost A7 cents (2.6 per cent) to A2.63, but was as high as A$2.80 on Thursday. Troy (TRY) dropped A12 cents (8.8 per cent) to A$1.24 after its founder and long-term chairman, John Jones, announced his shift to a back-bench directors role. Resolute (RSG) fell 25 cents (19.4 per cent) to A$1.04 and St Barbara (SBM) slipped A3.5 cents (11 per cent) to A28 cents.

Minews. Base metals, then iron ore and any specials to finish.

Oz. All red ink among the nickel and copper stocks, and apart from CBH, the same among zinc stocks. Poseidon (POS) which had raised hopes of re-developing the historic Mt Windarra nickel mine bombed out badly when it announced the sacking of workers and a retreat to the surface. On the market, Poseidon lost A14 cents (36.8 per cent) to A24 cents. Western Areas (WSA) fell A$1.33 (16.4 per cent) to A$6.76. Mincor (MCR) dropped A20 cents (15 per cent) to A$1.12 and Albidon (ALB) slipped A6 cents (4.8 per cent) lower to A$1.19.

Among the copper producers, the recovery by OZ Minerals (OZL) ran out of puff with the stock losing A22 cents (13 per cent) to A$1.48. Equinox (EQN) frightened the market by announcing an increase in its debt load, paying the price with a fall of A76 cents (21.7 per cent) to A$2.74, and CopperCo (CUO) lost A6 cents (21 per cent) to A22.5 cents.

Zinc stocks, perhaps because they were already so low, looked better than the other base metal producers. Bass Metals (BSM) ended the week steady at A14.5 cents, which is almost as good as a rise, Terramin (TZN) eased A8 cents (5.7 per cent) to A$1.31, while Kagara (KZL) was hammered hardest after suggesting that it might sell its Lounge Lizard nickel discovery and focus on the high-risk Admiral Bay zinc project. That bemused investors who knocked A65 cents (21.3 per cent) off Kagara which closed the week at A$2.40.

Minews. Iron ore, please.

Oz. Nothing going up, but most falls were relatively soft in an awful week. Fortescue Metals (FMG) remains the target of idle gossip about difficulties with its radical continuous mining process and uncertainty about its highly-ambitious expansion plans in a depressed market. It fell A63 cents (11.2 per cent) to A$4.97, but did trade as low as A$4.53 on Friday. Atlas Iron (AGO) announced that it has won environmental approval to start its Pardoo mine, but lost A29 cents (16.4 per cent) to A$1.47. Doubts grew about the deal which will see Grange (GRR) merge with a Chinese-led group with the stock dropping A23 cents (17.3 per cent) to A$1.10, and Gindalbie (GBG) fell A13 cents (16.5 per cent) to A66 cents.

Minews. Uranium, coal, and specials before we sign off.

Oz. All uranium stocks fell, but not substantially. Coal stocks weakened in line with the oil price, and most of the speciality explorers were sold off sharply. Windimurra Vanadium (WVL) dropped A50 cents (30 per cent) to A$1.17 and Moly Mines (MOL) fell A48 cents (35 per cent) to A90 cents. Tungsten explorer, Vital Metals (VML), held up relatively well after mothballing its Watershed project, a move which only cost in A1 cent (5.8 per cent) as it slipped to A16 cents.

Leaving the worst to last, we saw three mining stocks float during the week. Copper and gold explorer, Queensland Mining Corporation (QMN), saw its A50 cent shares start trading at A19.5 cents, and then slide to a close of A18 cents, a 64 per cent bath for initial subscribers. Investors in bauxite explorer, Aluminex (ALM), watched their A40 cent investment open at A12 cents, and then creep up to A15 cents for a 62.5 per cent loss. Base Iron (BSE) did best of all with its A20 cent shares closing the week at A17 cents for a relatively minor loss of 15 per cent.

Minews. Thanks Oz. Let’s hope we have something better to talk about next week.

 

[drillinto]

October 12, 2008

That Was The Week That Was … In Australia
By Our Man In Oz >> www.minesite.com/aus.html

Minews. Good morning Australia, what a devastating week. How bad was it on your market?
Oz. Perhaps the worst I’ve seen in almost 40 years of reporting on the ASX, and its predecessors, such as the old Sydney and Perth Stock Exchanges. Devastation is a word being used often. Carnage is another favourite. However, before we conduct a roll call of the wounded it seems reasonable to lighten your day with two bits of good news which might be a pointer to where the market in mining shares goes now.

In my trawl through the impossibly long list of stocks that fell sharply I came across two which rose which, in a week of utter chaos, is quite an achievement. Both, naturally, were gold related. Gold Bullion Securities (GOL), the locally listed vehicle created in part by the World Gold Council, hit a 52-week high of A$137.81, a price which reflects its underlying asset being one-tenth of an ounce of gold. That closing price represents a rise over the week of 23.7 per cent, which is exactly how much the gold price rose when measured in Australian dollars, which is more a comment on the falling value of our dollar than it is of the U.S. dollar gold price.

The second asset yielding a positive result for the week was the gold explorer Silver Lake (SLR). It rose by the smallest measurable amount of half-a-cent to close the week at A19.5 cents.

Minews. There is something interesting in what you’ve said. Only two ASX listed gold assets rose in a week when the Australian gold price shot up by 23.7 per cent?

Oz. Precisely. Now, if you’re a British investor with any cash left, and I heard a rumour that one such person is to be found in the Outer Hebrides, the low value of the Aussie dollar and the potential for gold to trend upward, represents a fascinating opportunity to get a double-whammy effect. You can buy into a currency which is currently depressed, but which retains direct exposure to China, the country in the world likely to suffer the least damage from the global downturn, and get exposure to the commodity likely to perform best, gold.

Minews. Enough theories, let’s go through the prices.

Oz. Before doing that, a snapshot of how bad it was on the ASX last week. A list of rolling year records, both highs and lows, normally occupies a small panel in the national business daily, The Australian Financial Review. On Saturday, there was one stock listed as setting a high, Gold Bullion Securities, and a full page of rolling year lows. The four columns of closely typed tabloid newsprint represents more than 500 stocks which set new 52-week lows.

For the price call, let’s start with gold because that’s where the damage was minimised as the dollar sank and the gold price held relatively high during our trading hours, and avoided the late Friday sell-off in the U.S. Newcrest (NCM) the biggest and best of the gold stocks fell A$1.95 (7 per cent) to A$25.64. During the week it moved between a low on Wednesday of A$23.20 and a high of A$27.79 on Thursday. Lihir (LGL), the second biggest gold producer lost A14 cents (5.3 per cent) to A$2.49.

Other gold stocks which we follow more closely fared somewhat worse than the big two. Kingsgate (KCN) fell A81 cents (17 per cent) to A$3.94. Resolute (RSG) frightened the horses by announcing a one-for-three renounceable rights issue priced at A55 cents to raise up to A$51 million to finalise its Syama goldmine in Mali. The fund raising and market malaise knocked A30 cents (28.8 per cent) off Resolute with the stock ending the week as A74 cents. Troy (TRY) fell A17 cents (13.7 per cent) to A$1.07 despite sending a letter to shareholders pointing out that each share was backed by A80 cents in cash. Centamin (CNT) slipped A8 cents (11 per cent) to A65 cents, and Allied (ALD) lost A5 cents (16 per cent) to A24 cents.

Minews. If that’s the good news the rest of the roll call must be awful.

Oz. It is, so we’ll keep it short. Hit hardest were the twin bulk commodities, iron ore and coal. Their problem was an outbreak of concern about future Chinese demand with the small exporter, Mt Gibson (MGX) letting the cat out of the bag with a report to the ASX that some of its small Chinese customers had asked for shipments to be delayed. That immediately cut Mt Gibson’s share price in half, and took the rest of the sector with it. Mt Gibson closed the week at A71 cents, down A79 cents (52.6 per cent).

Other iron ore falls included: Atlas (AGO), down A37 cents (25 per cent) to A$1.10. Gindalbie (GBG), down A33.5 cents (50.7 per cent) to A32.5 cents. Grange (GRR), down A40 cents (36..4 per cent) to A70 cents. BC Iron (BCI), down A21 cents (45.6 per cent) to A25 cents, and Fortescue Metals (FMG), down A$2.29 (46 per cent) to A$2.68. That fall by Fortescue takes its loss since June 25 (when it hit a peak of A$13.15) to A$10.47 (79.6 per cent), and the personal loss of its chief executive, Andrew Forrest to A$10 billion, or around A$100 million a day.

Minews. Astonishing stuff. Let’s have a quick look at the coal sector, and finish with base metals and uranium, please.

Oz. All bad among the coals, with everyone hammered flat as the oil price crashed. Riversdale (RIV) fell A$3.98 (48 per cent) to A$4.30. Coal of Africa (CZA) fell A$1.10 (52.8 per cent) to A98 cents. Macarthur Coal (MCC) fell A$3.40 (36.9 per cent) to A$5.80, and Felix (FLX) lost A$7.28 (44.7 per cent) to A$9.

Nickel, copper and zinc stocks all fell sharply, taking them back to the prices of five years ago. Mincor (MCR) fell A25 cents (22.3 per cent) to A87 cents. Minara (MRE) fell A64 cents (45.7 per cent) to A76 cents. Western Areas (WSA) lost A$2.99 (44.2 per cent) to A$3.77, and Independence (IGO) lost A66 cents (28.7 per cent) to A$1.74, with the price held up marginally by its exposure to gold.

Among the copper stock, OZ (OZL) fell A47 cents (31.7 per cent) to A$1.10. CopperCo (CUO) fell A11 cents (48.8 per cent) to A11.5 cents, and Equinox (EQN) fell A71 cents (26 per cent) to A$2.03. Zinc falls well less severe on a percentage basis, but only because much of the damage was done weeks ago. CBH (CBH) fell A1.5 cents (18.7 per cent) to A6.5 cents. Kagara (KZL) fell A78 cents (32.5 per cent) to A$1.62 and Perilya (PEM) fell A9.5 cents (31.6 per cent) to A20.5 cents.

Uranium stocks were not spared as the wave of selling rolled through the market. Uranex (UNX) fell A5.5 cents (27.5 per cent) to A14.5 cents. Toro (TOE) fell A7 cents (35 per cent) to A13 cents. Energy and Minerals (EMA) fell A10 cents (25 per cent) to A30 cents, and Paladin (PDN), the sector leader through the boom, lost A$1.76 (46.2 per cent) to A$2.05, taking its fall over the past 12-months to A$7.31, or 78 per cent.

Minews. That’s enough Oz. We’re off to the pub.

Oz. Good idea.

 

[drillinto]

October 19, 2008

That Was The Week That Was … In Australia
By Our Man In Oz >> www.minesite.com/aus.html

Minews. Good morning Australia, how was your week?

Oz. Curiously positive is the ambiguous answer. The overall market, as measured by the all ordinaries index, was up an infinitesimal 0.1 per cent. The mining market, as measured by the metals index, was down a thumping 11.1 per cent but the unofficial Minesite count of the movement at the small end of market discovered a rather pleasing change of mood. When we last spoke, it was only after a mighty effort that two stocks out of 75 tested were found to be on the plus side of the ledger. This week 25 stocks out of 75 ended the week in the black, some with very impressive gains.


Minews. Which means all the damage was done at the big end of town.

Oz. Precisely. Stocks such as BHP Billiton (BHO), Rio Tinto (RIO) and Alumina (AWC) were trashed while smaller stocks staged some impressive recoveries, along with one of the bigger miners which showed the benefit of the falling Australian dollar mentioned briefly last week. Iluka (ILU), the zircon and titanium sands miners, issued a very unusual profit upgrade thanks to the dollar’s decline, and was rewarded with a rise of A63 cents (18.4 per cent) to A$4.05.

Minews. But surely all Australian mineral exporters selling in U.S. dollars are sharing in the currency effect?

Oz. They are, and that’s a point which seems to have restored a bit of interest in the local mining sector, though not among the big producers which have their mines scattered around the world and report in U.S. dollars. Before going through a price call there are two other general observations about the Australian market. First, that there was no pattern to the performance with the 25 stocks to rise. They were scattered across all sectors. Second, that the slightest whiff of a capital raising is the kiss of death, as Resolute (RSG) discovered with plans to raise A$51 million through a one-for-three rights issue priced at A55 cents. Before it was announced on October 9 Resolute was trading at A$1.04. A day later the stock closed at A74 cents. By the end of the week Resolute was down to A48 cents, either down A26 cents (35 per cent) over the week, or A56 cents (53.8 per cent) since announcing the capital raising.

Minews. There’s a message in that for anyone thinking about raising money in this market.

Oz. There certainly is, which is why Avalon (AVI) postponed/ pulled a very modest raising of A$1.95 million, and the list of new floats at the ASX has all but dried up.

Minews. Time for prices, starting with gold please as that is the sector that ought to be performing best.

Oz. It is, but there’s no pattern and most movements were modest. On the way up we saw Centamin (CNT) add A7 cents (10.7 per cent) to A72 cents after reporting a fresh upgrade in the resource at its Sukari project in Egypt. Tianshan Gold (TGF) added A2.5 cents (25 per cent) to A12.5 cents but was very lightly traded. Allied Gold (ALD) broke a long losing streak to gain A1.5 cents (5.7 per cent), and Tanami (TAM) which was the subject of a positive midweek report on Minesite added A1 cent (14.3 per cent) to A8 cents.

Encouraging as the list of gold stocks rising was there were more falling. Kingsgate (KCN) lost A23 cents (5.8 per cent) to A$3.71. Perseus (PRU) fell A6 cents (12 per cent) to A44 cents. Apex (AXM) slipped A1.5 cents (4 per cent) to A36 cents, and Adamus (ADU) fell A2.5 cents (10.4 per cent) to A21.5 cents. Stocks at the top end of the gold sector were not immune to the easier trend, Newcrest (NCM) lost A$2.94 (11.5 per cent) to A$22.70 and Lihir (LGL) fell a very sharp A52 cents (20.8 per cent) to A$1.97.

Minews. Let’s have a look at the twin bulks, iron ore and coal because they seem to have the greatest exposure to a weaker looking China.

Oz. Quite right. Reports of China catching a dose of the flu spreading out from the U.S. and Europe has been worrying the iron ore and coal sectors, though it was possible to find stocks in both areas which ignored the concern. Fortescue Metals (FMG) shook off reports of troubles in the market and troubles at its mines by adding A25 cents (9.3 per cent) to A$2.94, though even with that price rise the stock looks awfully skinny compared with the A$13.15 of just four months ago. Other upward iron ore moves included Gindalbie (GBG) shaking off a nasty fall with a rise of A8 cents (24.6 per cent) to A40.5 cents. Territory (TTY) also recovered some of its lost ground to close at A23.5 cents, up A5 cents (27 per cent). BC Iron (BCI) also rose by A5 cents (20 per cent) to A30 cents. Falls came from Mt Gibson (MGX), which did most to upset the sector with a report of delayed shipments to China, cutting the stock back to A46 cents, a loss for the week of A25 cents (35 per cent). Grange (GRR) has struggled to sell its Chinese-linked merger, dropping A26.5 cents (37.8 per cent) to A43.5 cents, and Golden West (GWR) eased back by A10 cents (13.3 per cent) to A65 cents.

Coal stocks were evenly mixed with rises equalling falls. Straits Resources (SRL) was the big winner after successfully refinancing US$230 in debt, which is a notable achievement in this market. That help lift the stock by A40 cents (38 per cent) to A$1.45. Coal of Africa (CZA) shook off its losing streak to add A12 cents (12.2 per cent) to A$1.10, and Gloucester Coal (GCL) rose A25 cents (6.6 per cent) to A$4.03. Going down we saw Riversdale (RIV) shed A51 cents (11.8 per cent) to A$3.79. Felix (FLX) fell A41 cents (4.5 per cent) to A$8.59, and Macarthur (MCC) slipped A20 cents (3.4 per cent) to A$5.60.

Minews. Let’s finish with base metals and uranium please.

Oz. Once again, we have a mixed bag with a surprisingly high number of base metal stocks to rise in a gloomy market. Among the copper stocks, CopperCo (CUO) was a star, adding A3 cents (26 per cent) to A14.5 cents with that percentage exaggerated by the low base. Marengo (MGO) also reversed a losing streak with a rise of A1 cent (8.3 per cent) to A13 cents, and Citadel (CGG) added A2 cents (15.4 per cent) to A15 cents. On the way down, Equinox (EQN) fell A11 cents (5.4 per cent) to A$1.92 and OZ (OZL) continued to lose altitude with a fall of A3 cents (2.9 per cent) to A98.5 cents.

Nickel and zinc stocks were mixed with falls marginally outnumbering rises. Takeover target Perilya (PEM) added A3 cents (14.6 per cent), and Terramin (TZN) rose A4 cents (4.4 per cent) to A94 cents, but CBH slipped a fractional 0.1 of a cent to A6.4 cents. Among the nickel stocks, Panoramic (PAN) added A3 cents (3 per cent) to A$1.03. Mincor (MCR) rose A2.5 cents (2.8 per cent) to A90 cents, but Western Areas (WSA) continued its downward spiral with a fall of A32 cents (8.5 per cent) to A$3.45 and Albidon (ALB) fell a very sharp A14 cents (25 per cent) to A42 cents.

Among the uranium sector, in a week when the price of the metal continued to decline, we had two notable rises, and plenty of falls. Uranex (UNX) managed a modest gain of half-a-cent to A15 cents, and a newcomer, Aura Energy (AEE) shot up A8 cents (72 per cent) to A19 cents after announcing a deal covering a potential uranium resource in Sweden. Other moves were down with Paladin (PDN) a victim of its own words, losing A26 cents (12.7 per cent) to A$1.79 after warning that the credit crisis might slow construction of nuclear power plant, and then try to cover up its foot shooting exercise by claiming later that the warning was general and not specific to Paladin.

Minews. Sounds like an own goal on the part of Paladin.

Oz. A perfect example.

Minews. Thanks Oz.

 

[drillinto]

November 01, 2008

That Was The Week That Was … In Australia
By Our Man in Oz >> www.minesite.com

Minews. Good morning Australia. You seem to have had a much better week.

Oz. It certainly was, though it might be more accurate to describe it as an extraordinary week which opened and closed quietly and did all the heavy lifting in the middle. In fact, trading on individual days has become such a tiresome experience that it is actually rather useful to sit back and look at events through a week-by-week filter to get a better idea of where we’re heading.

Monday, for example was ho-hum of the first order with the mining market utterly flat. Tuesday saw a bit of interest return, followed by strong gains on Wednesday and Thursday, all of which was then rounded off by a down day to close on Friday. Emerging from this mix of up, down, and flat, comes the overall result: a remarkable rise of 14.7 per cent in the metals and mining (XMM) index of the Australian Securities Exchange, three-times better than the 3.9 per cent gain posted by the all ordinaries index.

Minews. How do you explain such as enormous difference between mining shares and the overall market?

Oz. The big boys certainly influenced the index, with BHP Billiton and Rio Tinto rising strongly down here, as they did on your market. But underneath the heavyweights there was a groundswell of new-found enthusiasm, which saw most sectors, other than uranium, enjoy the most positive week we’ve seen in a very long time. Big gains among the nickel stocks, a stronger gold sector, and signs of a recovery among small iron ore companies sparked a debate about whether we have started the long haul back to the surface after 12 months underwater.

Minews. I think you’ll find the answer to that question is a loud “perhaps”, because we still have the US election and Christmas to slow things down. But enough of the general chit-chat. Time for prices, please, starting with the nickel revival.

Oz. Events in the nickel market were quite astonishing, and there may, perhaps, be more drama to come. Minara (MRE), the big laterite miner which is effectively controlled by the commodities trader Glencore, rose strongly despite announcing a deeply discounted rights issue to fill a financial hole. It wants an extra A$210 million and proposes to get that by issuing 700 million new shares at A30 cents, a 12 per cent discount to the pre-announcement price. However, rather than fall after the big share issue was reported, Minara took off like a rocket, closing on Friday at A$1.04 for a gain over the week of A69 cents, or 197 per cent.

Minews. Astonishing indeed, but was it just a Minara event or more widespread?

Oz. Most other nickel stocks joined in the celebrations. Albidon (ALB) had an equally eventful week, plunging on Tuesday to a 12 month low of A24.5 cents, and then more than doubling by Friday when it traded as high as A52 cents. The closing Friday price of A44.5 cents represented a gain for the week of 31 per cent. Other upward nickel movers included Panoramic (PAN) which rose 30 per cent to A$1.08, Western Areas (WSA), up 35 per cent to A$4.05, and Independence (IGO), up A8 cents to A$1.41. Mincor (MCR) was the only nickel to swim against the tide, losing a fractional half a cent to A69.5 cents.

Minews. Sector-by-sector now please.

Oz. After the big bounce in nickel stocks the best performing sector was gold. Gold also managed to climb out from the hole dug by the forced selling of cash-short investment funds. Newcrest (NCM) led the way with a rise of 19.2 per cent to A$20.80, regaining much of the ground that was lost in the mass exodus of the past month. Lihir (LGL), another favourite of the international fund managers, rose 27.5 per cent to A$1.95. Meanwhile, Kingsgate (KCN) shook off uncertainty about a delay expanding its Chatree mine in Thailand and rose 18.2 per cent to A$2.60. Andean (AND) continues to make solid progress with its Cerro Negro project in Argentina, and rose an eye-popping 70 per cent to A85 cents. Avoca (AVO) recovered from several weeks of selling to rise 29.8 per cent to A$1.48. Sinogold (SGX) joined in the rebound with a rise of 47.7 per cent to A$3.50, and St Barbara (SBM) started to shake off the influence of the non-believers in its big dig at the Gwalia Deeps mine, putting in a rise of A1.5 cents to A23 cents. Not all gold stocks rose, though. Apex (AXM) slipped 19 per cent lower to A25 cents. Perseus (PRU) dropped 22 per cent to A33 cents and Adamus (ADU) fell 18 per cent to A18 cents.

Minews. Perhaps you should take us through the rest of the base metals, and finish with iron ore, coal, uranium and any specials please.

Oz. It was a better week for copper stocks and for some zinc miners, but there were also some heavy losers. Equinox (EQN) recovered some lost ground as investors renewed their interest as start-up nears at the Lumwana mine. The project is currently closed to journalists, so we’ve no way of knowing how it’s going, but the Equinox team are planning to host a fully comprehensive tour in February, which does seem to give grounds for confidence. Equinox shares rose 14.8 per cent to A$1.32. Marengo (MGO) also shook off the bears that savaged its share price in recent weeks, putting in a rise of 56.7 per cent to A10.5 cents. The size of that move in percentage terms is a prime example of how it feels to come up off a low base. OZ Minerals (OZ) staged a very modest bounce of A3 cents to A94.5 cents, but Kagara (KZL) remains a target for the sellers, dropping 28.4 per cent to A53 cents, which takes its fall from grace to 92.3 per cent when measured against last year’s all-time high of A$6.90. Zinc stocks were subdued. CBH (CBH) fell 18.5 per cent to A5.3 cents. Terramin was A0.8 cents lower at A8 cents, but Perilya (PEM) rebounded with one of those very strong rises off a low base, to close up 51.6 per cent at A23.5 cents.

Iron ore stocks were almost uniformly better, but modestly so. Atlas (AGO) shrugged off several weeks of negative publicity to rise 14.2 per cent to A81.5 cents. Gindalbie (GBG) rose 18.5 per cent to A41.5 cents. Brockman (BRM) rose 23 per cent to A61.5 cents. BC Iron (BCI) rose 22 per cent to A30.5 cents, and FerrAus (FRS) put on a 32 per cent gain to close at A31 cents.

Coal stocks were all up, some better than others. Riversdale (RIV) rose a modest A10 cents to A$3.05. Coal of Africa (CZA) rose a more significant 17.6 per cent, and Felix (FLX) by 27.3 per cent to close the week out at A$11.86.

Most uranium stocks were weaker despite the US$1.00 per pound rise in the spot uranium price. Uranex (UNX) fell 27 per cent to A12 cents. Energy and Metals (EMA) dropped 27 per cent to A20 cents, and Toro (TOE) fell 21 per cent to A10 cents.

Minews. Any specials worth mentioning?

Oz. Platinum Australia (PLA) recovered strongly after a few torrid months, rising by 40.7 per cent to A59 cents, but Moly Mines (MOL) continued to slide lower, dropping A3 cents to A36 cents, and Windimurra Vanadium (WVL) dropped A8 cents to A81 cents.

Minews. Thanks Oz.

 

[drillinto]

November 08, 2008

That Was The Week That Was ... In Australia

By Our Man in Oz
www.minesite.com

Minews. Good morning Australia. Another tough week?

Oz. Yes and no. It was a week very much in the mould of one we saw in late October, a week which was split neatly in half, but the end result of which created the impression that we went nowhere, when we actually went up a long way, and down a long way. The big difference this time was that we squeezed in two major events. The Melbourne Cup, our biggest horse race of the year, took everyone’s interest off the market for a day. And that was followed by the hoopla of an election in the US. Interestingly, the stock market was up after race day and down after the election, which tells you that most of us would probably prefer a day at the races than a day listening to rubbish about voting trends in South Dakota or North Florida, or some other useless information about an election in a foreign country.

Minews. And a very foreign country at that. Enough of elections, tell us about your market.

Oz. Technically, the mining sector rose by 0.6 per cent, while the all ordinaries fell by 0.5 per cent - margins which are about as thin as you can get. But, another way of looking at the mining index is that on Wednesday it was actually ahead by a very impressive 12.6 per cent, thanks to strong share price rises on Monday and Wednesday. On Tuesday the index dropped by 2.3 per cent, but the real damage started on Thursday when it fell by 7.7 per cent. That was followed by a decline of another 4.3 per cent on Friday. The jury is out on the cause of the poor end to the week, but the popular theory down here is that a Democrat president is likely to withdraw into the US, causing problems for exporters such as China, and hence for raw material suppliers feeding China, such as Australia.

Minews. Did any sectors stand out for harsher treatment than others?

Oz. Not really. In fact, as you cruise through the sectors it’s actually easier to pick out stocks that rose rather than stocks that fell. What seems to have happened is that the bulk of the damage was done at the top end of the industry, where leaders such as Rio Tinto fell a rather sharp 6.3 per cent, while the small and mid-tier end of the game held up quite well, perhaps because so much damage was done in October.

Let’s start this week with the good news - to buoy the spirits of UK readers who seem to be having such a horrid time. Pick of the sectors, with a long overdue rally, was uranium where we saw a number of stand-out performances without any visible upswing in the uranium prices. Perhaps it was largely due to corporate activity. Bannerman (BMN), which controls the land surrounding Paladin Energy’s (PDN) Langer Heinrich uranium mine in Namibia, led the charge with a 73 per cent rise to A48.5 cents. There is a theory going around that Bannerman’s sharp share price rise might be a result of Paladin Energy seeking to snap up its neighbour to ensure future feedstock for Langer Heinrich. If that’s right it is in line with activity on the share register of another Aussie uranium hopeful in Namibia, Extract Resources, which owns the Rossing South uranium project next to Rio Tinto’s big Rossing mine. There was little movement in Extract last week, though, as the shares slipped a mere three per cent lower to A97 cents.

Other uranium movers included Toro (TOE), which secured a fresh injection of capital, largely from its biggest shareholder, OZ Minerals (OZL). Over the course of the week Toro rose 40 per cent to A14 cents. Uranex (UNX), which continues to shape as a beneficiary of political changes in Western Australia, was another star, rising 41.6 per cent to A17 cents.

Minews. The percentage moves look impressive, but they also reflect the low base from which they are rising. Let’s go through the other sectors now, starting with gold.

Oz. Mainly up was the story in gold, but there were a few stragglers who slipped a little lower, in a week when the gold price did absolutely nothing, and neither did the Australian dollar. Kingsgate (KCN) ranked among the better performers. It continues to recover lost ground after a few horrid weeks, and rose 25 per cent to A$3.25. Perseus (PRU) was another gold play in recovery mode, rising 18 per cent to A39 cents, while Carrick Gold (CRK), which we took a look at mid-week, rose 17 per cent to A82 cents. Also on the up were Allied (ALD), which rose 14 per cent to A24.5 cents, Newcrest (NCM), up A89 cents to A$21.69, Lihir (LGL), up A12 cents to A$2.07, and Medusa (MML), which saw off its takeover suitor Crosby Partners, and rose A1.5 cents to A65 cents. On the way down were Adamus (ADU), off 11 per cent at A16 cents, Troy (TRY) down A2 cents to A99 cents, and Centamin (CNT), down A1 cent to A71 cents.

Iron stocks were generally down, as concern rose about future Chinese demand for raw materials. One of the few stocks to rise was BC Iron (BCI), which was one of a very long line of stocks to announce downgraded, postponed or delayed mine plans, but still managed to rise A1 cent to A31.5 cents. The rest of the iron ore traffic was one way. Fortescue (FMG) dropped 11.8 per cent to A$2.60, as it mothballed a number of expansion plans. Atlas (AGO) fell 11.6 per cent to A73 cents. Mt Gibson (MGX) slipped A2.5 cents lower to A38 cents, and Golden West (GWR) dropped 11.3 per cent to A43 cents.

Minews. Base metals and any specials please.

Oz. Most nickel stocks rose, continuing the recovery after October’s wholesale sell-off. Mincor (MCR) was one of the best, rising 20 per cent to A83.5 cents, although it did trade as high as A93.5 cents on Wednesday. Albidon (ALB) also bounced back from tough times, rising 14.6 per cent to A50 cents, while Panoramic (PAN) rose 11 per cent to A$1.20. On the way down Minara (MRE), which is struggling in a depressed nickel market, dropped 40 per cent to A62 cents, with that fall raising doubts about the strong rise in the previous week, which is now looking somewhat artificial.

Zinc stocks were all over the shop. Most moves either way were pretty modest. Perilya (PEM) dropped 14.9 per cent to A20 cents and CBH (CBH) fell by one tenth of a cent to A5.2 cents, after both announced further production cutbacks. On the way up we saw some interesting moves, with Kagara (KZL) shaking off a long losing streak to rise 20.7 per cent to A64 cents, and Mt Burgess (MTB) which raised extra cash by selling a copper prospect, was also two tenths of a cent better off at A1.1 cents. Copper stocks were also mixed, but with small moves. Marengo (MGO) rose half a cent to A11 cents , CopperCo (CUO) rose six tenths of a cent to A10.5 cents and Hillgrove (HGO) rose A1 cent.

Minews. Finishing specials.

Oz. Platinum Australia (PLA) stood out as a recovery situation, after a long downward slide courtesy of heavy selling coming out of London. Over the week PLA rose 29.6 per cent to A76.5 cents. At the end of October, PLA hit rock bottom of A36 cents, which means it has now risen by 112.5 per cent in eight trading days, which is rather encouraging to say the least.

Minews. Thanks Oz.

 

[drillinto]

November 22, 2008

That Was The Week That Was … In Australia
By Our Man in Oz >> www.minesite.com

Minews. Good morning Australia. Was that the bottom on Friday?

Oz. Perhaps... The big bounce in the gold price, as we were closing for the week, was a very positive sign, as was the continued recovery in the price of uranium. Having said that, we are so far down the hole that the slightest glimmer of light is as welcome as the first beer is after a day in the scrub country east of Kalgoorlie. In truth, the first four-and-a-half days of this week just gone were bloody awful, and Friday’s late recovery made little overall difference, even if it did claw back a few lost cents. Overall, the metals and mining index fell 15.7 per cent last week, easily outstripping the all ordinaries which was “only” down 9.1 per cent. Those latest falls take the decline over the past 12 months to 54 per cent for metals, and 47 per cent for the all ordinaries - a difference which highlights how hard hit the metals sector has been since the bear market started.

Minews. Grim stuff indeed. Was there any good news?

Oz. A couple of the gold stocks caught the first whiff of the higher gold price, and there was a bit of action among some of the uranium stocks, especially after BHP Billiton said it was re-starting work on its long-mothballed Yeelirrie project now that the government of Western Australia has formally lifted a ban on uranium mining in that state. Among the iron ore stocks, which have been hit very hard by China’s demands for production cuts, there was a spectacular bounce in the price of Fortescue Metals (FMG), possibly the result of short positions being closed out, but maybe the start of something better (fingers crossed).

Minews. Let’s go straight to the gold stocks because that’s where the action is likely to be next week, with the price back over US$800 an ounce.

Oz. Good decision, because in Australian currency at more than A$1,200 an ounce gold is moving back into record price territory, and if you can’t make money at that level you ought to give up. Best move among the local gold stocks was Avoca (AVO) which kicked up towards the close to end the week at A$1.31, a rise of A7 cents. Perhaps at this point it’s worth pointing out that Avoca was the one Australian stock in Susie Boeckmann’s nine stock portfolio which you reported on mid-week actually to rise. The rest of her stable of stocks fell, some a little, some a lot. They included Kingsgate (KCN), which just cannot shake off its doubters despite an optimistic outlook. It fell by 34 per cent to A$2.37, perhaps under pressure because of delayed expansion plans.

Elsewhere in the gold sector it was a prettier picture. Centamin (CNT) regained some of its lost ground by putting in a rise of 15 per cent to A69 cents, all of it on Friday. Also better off over the course of the week was Bendigo Mining (BDG), which appears to be making progress with its big Bendigo project in central Victoria. Bendigo rose 13.4 per cent to A 11 cents. Other risers included Newcrest (NCM), up A69 cents to A$20.29, and Lihir (LGL) up A3 cents to A$1.80.

Joining Kingsgate on the way down were Troy (TRY) which slipped A6 cents lower to A70 cents, and which now appears to have become one of the growing breed of Aussie miners trading below the amount of cash they have in the bank, which says a lot about this dreadful market. Meanwhile, St Barbara (SBM) gets ever closer to announcing that it has started pulling high grade ore out of its Gwalia Deeps project, but it nonetheless fell A2 cents to A22.5 cents. Apex (AXM) is also within sight of re-starting gold production, but nonetheless dropped 15 per cent to A22.5 cents this week. Also weaker, Adamus (ADU), which fell 21.8 per cent to A12.5 cents.

Minews. Uranium next, please, because that latest US$5.00 a pound rise in the spot-market price seems to have been overlooked amid all the gloom.

Oz. You’re probably right, but so were two other positives for the uranium sector. First came the lifting of the mining ban in Western Australia (WA). Then along came BHP Billiton’s decision to dust off Yeelirrie, starting with a fresh round of drilling. On the market, stocks with exposure to the WA sector were mixed. Toro (TOE), which has recently received a fresh capital injection, rose 21.7 per cent to A14 cents, with most of the rise coming on Friday. Energy and Minerals (EMA) rose 11 per cent to A20 cents. But Uranex (UNX) went against the trend, dropping 14.7 per cent to A14.5 cents.

The prize for biggest upward move in the uranium sector went to one of the small Australian stocks working projects in Namibia. Bannerman (BMN) benefited from the recruitment of a new chief executive and the successful raising of a fresh A$20 million in capital. The extra cash was probably the major plus for the company, but the appointment of Len Jubber as the new chief executive didn’t hurt either. Jubber previously worked with OceanaGold, and more recently with the troubled zinc miner, Perilya (PEM). Investors greeted Bannerman’s news enthusiastically, adding 49 per cent to Bannerman’s share price which closed at A48.5 cents, after trading as high as A55 cents on Tuesday.

Minews. Now for the iron ore sector, and a comment on what happened at Fortescue during the week.

Oz. It was a remarkable week for Australia’s highest profile iron ore player, though it seems we haven’t seen all the cards played yet. On Thursday the stock dropped to a low of A$1.16, a fall of 39 per cent on the previous week’s closing price of A$1.90. On Friday, after a “bells and whistles” presentation from Fortescue’s chief showman (sorry, chief executive), Andrew Forrest, the stock was back up at A$1.80. Whether you want to talk up the 55 per cent rise in a day or the 5.2 per cent fall for the week depends rather on your own personal take on Fortescue and Mr Forrest, but one thing we will say: this company is never dull.

The news which drove the market in Fortescue up this time round was a claim that Chinese steel mills have increased their buying orders with Fortescue. What makes some seasoned observers a bit suspicious, though, is a nagging worry about why the Chinese would buy more from one company when they’re buying less from everyone else. The missing fact from these so-called “increased sales” is the price. If, as seems likely, the extra sales are at a big price reduction then there might be a bit of share price retracement in the next few weeks.

Elsewhere among the iron ore stocks there was nothing but gloom. Atlas Iron (AGO), which was hit by a shareholder revolt at Friday’s annual meeting, dropped 18 per cent to A45 cents, despite being almost ready to make its first shipment. Gindalbie fell 19.7 per cent to A34.5 cents, despite pulling in a huge pile of cash from its Chinese partner, AnSteel. Murchison (MMX) dropped 28.4 per cent as doubts grew about the entire Midwest iron ore sector, and Territory (TTY) was hammered after describing the outlook as grim at its annual meeting on Thursday. Territory dropped 60 per cent to A8 cents.

Minews. Tough stuff, but falls which make that Fortescue rise on Friday all the more interesting.

Oz. Absolutely. Let’s get a wriggle on and flash across the base metals, coal and specials, because there isn’t much good news for us to send you to lighten up those ever-shortening days in London. All nickel stocks fell. Independence by 10 per cent to A$1.23, Mincor (MCR) by 20 per cent to A52 cents, and Albidon (ALB) by A2.5 cents to A25 cents. It was the same with copper and zinc, where the stand-out performer was Equinox (EQN) on the basis that it only fell by A1 cent to A$1.50 while most other stocks lost a lot more. OZ Minerals (OZL), for example, dropped 32.7 per cent to A59.5 cents and faces a potential shareholder revolt after a frightful five months.

Minews. That’s enough Oz. Good luck for next week, and watch that gold price.

 

[drillinto]

January 06, 2009

Australia Looks Better Poised Than Most Other Western Economies For Recovery In 2009

By Our Man in Oz
www.minesite.com

Perhaps it’s the sun which sets Australians apart from their British cousins, both in pallor and confidence. While many Brits can only see gloom and doom as they struggle through a freezing northern winter, Aussies are frolicking at the beach and approaching 2009 with a cautious but breezy confidence. The difference is especially obvious to anyone who has his roots in Australia (like Minesite’s Man in Oz) but finds the time to pop over to see how the rest of the world is handling the great asset-value meltdown. Over the past few weeks the differences observed have been remarkable. Sure, Australia has been hit by the financial crisis and commodity-price collapse. Fortunes have been lost, just as they have in London. But, whereas the view in Britain seems to be that recovery is eons off the view in Oz is that the first green shoots of spring can already be seen. It’s a classic case of someone seeing a glass half-full, and someone else seeing the same glass half-empty.
For investors, a quick heads-up alert is important in looking at the year ahead, if only to avoid over-confidence and a belief that the destruction of 2008 will be quickly forgotten. It won’t, and that means share price recovery will be erratic. But, by the end of 2009 there seems little doubt that the stock market will be at a higher level, perhaps even substantially higher, than the level at which it ended last year. Most forecasts, which are really nothing more than best guesses, are for a rebound in the order of 25 per cent. Admittedly a gain of that size can only come as a consequence of rising from a low base, but it still looks infinitely better than leaving cash in the bank at some miserable interest rate of two per cent, or less.

There are three major reasons why Australia has entered 2009 with more confidence than Britain, the US, or Europe. Firstly, Australia’s highly-regulated banks were less exposed to the horrendous losses posted by other international banks which gambled on exotic financial instruments. This means the banking sector has survived with some bruising to profits but largely in a business-as-usual mode. Secondly, the Australian government entered the crisis with a large, by Australian standards, budget surplus of A$20 billion, and zero net debt. In the weeks before Christmas, in a move which kept the retail sector ticking over, the government “returned” A$10 billion of the surplus in the form of bonus payments to pensioners and people on low incomes. Much of the cash was spent immediately. Thirdly, Australia remains curiously close to China, and while China has been hit hard by the global slowdown it does continue to buy raw materials and maintains (perhaps overly optimistically) that its economy will grow by eight per cent this year.

There are a number of ways of measuring the difference in how the world is seen from Australia. Currency values are a good starting point, and even though they are still subject to the occasional wild fluctuation, it is significant that the Australian dollar has risen by 16 per cent from its November low point against the US dollar. The stock market is another guide to the upward trend - and never forget the market maxim that “the trend is your friend”. Since bottoming at 2,278 points on 20th November, just 30 trading days ago, the metals and mining index on the Australian Securities Exchange has jumped (yes, jumped) by 38.3 per cent to 3,151. Metals prices, like the stock market, are also showing promising recovery signs. Commodity-future indices, such as those maintained by UBS and CRB, are up by around 10 per cent. Recently the nickel price has risen 40 per cent, up by US$1.50 a pound from US$4.00 to around US$5.60. Copper has climbed out of the US$1.20 per pound range into the US$1.40 range, and gold continues its slow plod back towards the US$900 an ounce mark.

None of this evidence is convincing if looked at in isolation. The trick is to see the pattern that emerges as global markets recover, banks are repaired, trade is resumed and industry starts the slow grind back out of the hole into which it has fallen. Two factors are working in favour of commodity producers and investors. High-cost producers are being knocked out of business which makes a useful dent in the supply surplus, and the whole process - both the going down and now the coming up is happening at a speed never seen before, thanks to instantaneous communications and just-in-time stockpile management.

On the stock market the first early-bird speculators are making their return. Well-capitalised mining companies with strong management and good projects are being picked over by interested parties, and picked up. Gindalbie Metals (GBG) which has strong Chinese connections and an ambitious iron ore project has effectively doubled in price from A32 cents late last year to around A62 cents today. Avoca (AVO), one of the new breed of gold mining companies, has also come close to doubling, putting in a rise from A87 cents to A$1.55. Mincor (MCR) is riding the nickel-price recovery with a 104 per cent rise in little more than a month, up from A45.5 cents to a recent price of A93 cents. And Equinox (EQN) has shrugged off problems with a delayed commissioning phase at its Lumwana copper mine in Zambia to stack on more than A$1.00 in a matter of weeks with a rise from A95 cents to A$1.96.

There’s a pattern in those prices and its spelled r.e.c.o.v.e.r.y. Early days, certainly, but recovery nevertheless, and just as shoppers in the high street have been picking their way through bargain basement displays of surplus goods, so too are investors moving in to mop up bargains by acquiring positions in the better-run companies, especially those with the ingredients for (a) survival through what will be a tricky year, and (b) future growth as the wheels of world industry re-engage. That process ought to accelerate in the second half of the year as government-sponsored economic revival plans take hold and “make work” construction schemes boost the demand for raw materials.

Hurdles ahead cannot be avoided. There is more bad news to come out of America as its housing sector lurches from crisis to crisis. Banks are also yet fully to open their new-loans departments, car loans remain hard to get, and the entire car industry remains a basket case. In Australia, there will also be disturbing news about the fate of troubled companies burdened with excess debt. OZ Minerals (OZL) is yet to emerge from its self-imposed meltdown. CopperCo (CUO) is in the hands of administrators. High cost mines will be high-graded over the next 12-months and face early closure. China will demand (and get) massive price cuts on iron ore and coal purchases, and even the once mighty Rio Tinto will struggle to shake off its US$40 billion in debt.

News of corporate failures, marriages (mergers) of convenience to save costs, mine closures, and job losses will continue to trickle in as 2009 unfolds. But, the news trend will undoubtedly become more positive over time, and even the bad news will have the odd silver lining. With OZ, for example, the possible sale of assets such as the Prominent Hill copper/gold mine will initially be seen as a negative, but quickly become a positive because (a) a sale means it will remain in production and (b) it might go to a new (and freshly capitalised) owner who can start life at the bottom of the cost curve and not at the top.

The first months of 2009 will be a time when the bravest souls emerge from their bunkers. As the months tick by, and investors realise that the world did not end, rather it merely got a well-deserved scare, the business of commodity consumption will resume. China, if you can actually believe the statistics produced by its government has its eight per cent growth target for the year. Toy manufacturers in Guangdong might be closing in their hundreds, but steel mills which make long products for projects such as bridge building are starting to crank up output, and reports from the wharves of Shanghai point to stockpiles having dropped below the desired safety level to keep blast furnaces operating.

Capital raising, the stuff which keeps the small end of the market going, will not be in the first recovery wave. Banks, brokers and wise investors want to see more evidence than the small jewels observed by Minesite’s Man in Oz during a global jaunt which has taken him across the U.S., into parts of Europe and now into a freezing London. Having seen a series of economies, sniffed the air and drunk the beer (quite a lot, if you must ask) then the clearest picture is of Australia, with its time-honored propensity for extreme highs and extreme lows, coming out of this downturn at a fairly rapid rate – and certainly at a faster pace than in those parts of the world locked in ice.

 

[drillinto]

February 08, 2009

That Was The Week That Was ... In Australia
By Our Man in Oz >> www.minesite.com

Minews. Good morning Australia. Your market seems to have continued to improve, even after the improvement reported in our last conversation.

Oz. It was another good week, as strong support for gold stocks spilled over into the iron ore sector thanks to the positive comments from BHP Billiton boss Marius Kloppers, which we flagged during the week in our story on Golden West (GWR). Overall, the metals and mining index (XMM) on the Australian market rose by a rather impressive 5.2 per cent, which takes the gain over the past two weeks to 14.2 per cent. Curiously, the same positive trend in the mining sector has not spilled over into the wider Australian market. Over the past two weeks the all ordinaries index has risen by a lowly 3.2 per cent.

Minews. That is interesting. It seems to indicate that investors are picking up on the possible effects of the Chinese revival story which Kloppers mentioned.

Oz. Very much so. The key point from Kloppers, and others in the know, is that the Chinese “de-stocking” process appears to be over. That, obviously, is very good news because it means normal business can be resumed. The 64,000 dollar question is whether normal business means the Chinese will be seeking to lock in long-term contracts at significantly lower prices.

Minews. Time for prices. Let’s start with iron ore, as that seems to have been where the action was.

Oz. There were notable rises across the iron ore sector in the wake of Kloppers’ optimism. Fortescue Metals (FMG) acted as a magnet for speculators as its chief executive, Andrew Forrest, smoothed out a few operational wrinkles. Amongst other things he settled a disputed shipping contract, and spoke of a full order book - for the next month anyway. That news helped lift FMG by 31 per cent to A$2.32. Gindalbie (GBG) was another significant winner after its shareholders approved a big placement to the Chinese steel maker Ansteel. This vote of confidence in management and their plan to integrate Gindalbie into Ansteel’s production operations lifted Gindalbie’s shares by 15.7 per cent to A66 cents.

Also on the rise in the iron ore space was Jupiter Mines (JMS), which rose 25.7 per cent to A8 cents after the company confirmed its close ties with Brian Gilbertson’s Pallinghurst group. This is a complex situation, but Minesite was one of the new media outlets to explain what’s afoot, for which see our recent article on Red Rock Resources, which is also involved in the Pallinghurst connection to Jupiter. Meanwhile, FerrAus (FRS), which has high hopes for projects deep inland near BHP Billiton’s Mt Newman mining centre, rose 17.6 per cent to A20 cents. And Northern Iron (NFE), which continues to make good progress with its Norwegian iron ore re-development project, rose 12.1 per cent to A$1.18. Brockman Iron (BRM) was also better off, 15.3 per cent to the good at A$1.02, while BC Iron (BCI) was up a slightly more modest-looking A1.5 cents at A36.5 cents. The two stocks we followed most closely during the week, Golden West and Fairstar (FAS), did little late in the week. Golden West closed at A30 cents, the same price that it had reached as mid-week, up 11.1 per cent on the week before, while Fairstar rose 15 per cent largely in response to its possible sale of its stake in Golden West.

It wasn’t all one-way traffic among the iron ore stocks, though. Atlas (AGO) slipped A1 cent lower to A$1.18, but did trade as high as A$1.24 early on Friday. Giralia (GIR) also eased modestly, dropping half a cent to A32.5 cents. Cape Lambert (CFE) lost ground too, A1 cent lighter at A25.5 cents, although that closing price came before the company had announced that it’s to buy the secured debt of CopperCo from Macquarie Bank and the Linq Resources Fund for a total of A$72.7 million. CopperCo went into administration late last year.

Minews. Sounds like an interesting case of bottom fishing, perhaps you might find the time to have a chat to Cape Lambert boss, Tony Sage, next week.

Oz. It would certainly be interesting to hear what he has in mind. Let’s move along now and look at the next best sector, gold, where we also had some upward momentum, though it wasn’t as strong as it was in late January. Pick of the pack was Centamin (CNT) which continues to attract attention with work at its Sukari mine in Egypt. It stacked on another 26.5 per cent to close at A$1.09. And Perseus (PRU), one of our favourite stocks, also continued to forge ahead as investors re-discovered its attractions. The stock added rose 10.2 per cent to A81 cents, but traded as high as A83.5 cents early on Friday. Resolute (RSG) was a third strong performer as it raked in a few extra dollars to pay for final work on its Syama mine in Mali. It was sufficient to convince investors to get back aboard and lift the shares by a very impressive 31.7 per cent to A56 cents. That’s a handsome gain for supporters who took up extra Resolute shares at A40 cents.

Other upward gold moves came from Troy (TRY), which rose 11.6 per cent to A$1.15, Adamus (ADU), which came surging back with a 33 per cent rise to A24 cents, New Zealand-focused OceanaGold (OGC), which rose A3.5 cents to A47.5 cents, and Bendigo (BDG) which crept A1 cent higher to A16.5 cents.

Minews. Base metals, uranium and any specials to finish, please.

Oz. We’re still waiting for signs of recovery in the base metal sector. Share price movements across the copper, nickel and zinc sectors flat-to-down over the past week. The problem remains high global stockpiles. Mincor (MCR) was the best of the nickel stocks, rising 12.5 per cent to A71.5 cents, while Independence (IGO) also managed a gain of A8 cents to A$2.57, though that rise translates into a percentage gain of just 3.2 per cent. Equinox (EQN) was the best of the copper stocks, rising A18 cents to A$2.10. Citadel (CGG) issued a swag of press releases during the week about copper and gold assays, but rose just half a cent to A13 cents. Zinc stocks were generally flat, though Perilya (PEM) posted a rise of 23 per cent to A18.5 cents after shareholders voted through a big placing to a Chinese company. Other moves came from Terramin (TZN), which was down 10.3 per cent to A35 cents, and Bass Metals (BSM), which fell 10.9 per cent to A9.8 cents.

Uranium stocks were generally weaker, except for Uranex (UNX) which rose 17.6 per cent to A20 cents. Extract (EXT) eased back by A10 cents to A$1.52 as a boardroom battle continued to rage.

The only special worth mentioning is Stirling Resources (SRE) the vehicle being used by Michael Kiernan for his encore performance. Our midweek report seems to have attracted a small amount of interest, and the stock rose by 35.7 per cent to A1.9 cents.

Minews. Thanks Oz.

 

[drillinto]

February 21, 2009

That Was The Week That Was … In Australia
By Our Man in Oz >> www.minesite.com

Minews. Good morning Australia. Your week must have been all about gold.

Oz. Well, the record high gold price in Australian dollar terms certainly created a lot of interest, but so too did the Chinese invasion of the local mining sector. News next week looks like shaping as a fascinating mixture of gold-driven activity among the smaller miners and heavy-duty political action in regard to Rio Tinto, Fortescue Metals (FMG), OZ Minerals (OZL), and the swag of other companies which are attracting direct Chinese investment.

Minews. Before we look at share prices, how do you see that Chinese investment question unfolding?

Oz. It will undoubtedly require government-to-government involvement at the highest level. Australian law is not designed to handle foreign investment from a monolithic state such as China, where all companies are ultimately controlled by the central government. However, there also seems little doubt that some Chinese companies are currently acting independently and causing friction within China because of their competitive bidding for assets. In a way, that’s what happened last year when the same highly competitive companies drove up the price of commodities. It seems from this part of the world that some companies in China have become diplomatically embarrassing.

Minews. Does that include the Rio Tinto situation?

Oz. Not yet - that seems to be more a case of the directors of Rio Tinto embarrassing themselves with a rushed rescue effort that effectively hands control of their business to their biggest customer. It would be surprising if many members of the Rio Tinto board survive 2009.

Minews. Enough of events to come, let’s look at what happened on your market last week.

Oz. Gold was the best performing sector, but not to the extent you might have imagined. The global financial crisis, which is helping drive the gold price higher, is also weighing heavily on everyone, even gold investors. Over the week the metals and mining index fell by five per cent, slightly more than the overall Australian market which was down by 4.1 per cent. Most gold stocks rose, but modestly, given the attraction of a fabulously high gold price. On Friday, after we closed, the US dollar gold price kept rising on European and US markets. The last price we saw was US$994 an ounce, which, when converted at the latest exchange rate of US64.52 cents, produces an Australian gold price of A$1540 per ounce, up A$100 per ounce over the week.

But, apply that remarkable gold price to share prices and you get a pretty flat result. Allied Gold (ALD) was one of the best performers on the week, putting in a rise of 25.6 per cent to A51.5 cents. Centamin (CNT) also performed well as interest grows in its Sukari project in Egypt. Centamin rose by A11 cents to A$1.24. Silver Lake (SLR) also showed the benefits of full exposure to the gold price and the consequent healthy cash flow by putting on 10.7 per cent to close at A36 cents. Other useful upward moves in the gold sector came from St Barbara (SBM), up 10.8 per cent to A46 cents, and Kingsgate (KCN) which rose 10.3 per cent to A$4.40.

Minews. Useful rises, but well short of what you might have expected with you gold price at a record high.

Oz. Precisely. And as you trawl through the market it quickly becomes obvious that most moves were actually fairly modest. Other rises worth reporting came from Adamus (ADU), up A2 cents to A24 cents. Scotgold (SGZ), which you took a look at midweek, was also better off, up 15 per cent to A7.5 cents. And also showing considerable strength was West Wits (WWI), which reported an encouraging resource upgrade at its South African project, rose 28.5 per cent to A9 cents as a result.

Offsetting those rises, somewhat surprisingly, were a number of gold stocks which fell, even as the gold price was rising. To take two: Perseus (PRU), which has been a strong performer for several weeks, ran out of puff and slipped by A1.5 cents to A68.5 cents, while Troy (TRY) eased back by A2 cents to A$1.33.

Minews. Let’s switch across to the other sectors, starting with iron ore.

Oz. In a word, most iron ore stocks were flat. The one stand-out rise came from a stock we took a look at a few weeks ago, Golden West Resources (GWR), which rose by 43.6 per cent to A39.5 cents for a very interesting reason. One of GWR’s biggest shareholders is the Hunan Valin steel company of China. And Hunan Valin is also one of the potential investors in Fortescue Metals (FMG). Speculators have linked GWR with the possible FMG move, if only because it might create all-important rail and port access for GWR’s future ore production. FMG itself was up and down over the week, initially copping a speeding fine from the ASX for an 18.8 per cent dash up to a midweek high of A$3.34, and then dropping back down to close at A$2.83. That retreat shrunk FMG’s overall rise for the week to just A2 cents. The only other iron ore stock to rise was BC Iron (BCI), which rose 19 per cent to A50 cents.

Most other iron ore moves were down. Atlas (AGO) slipped by A5 cents to A$1.21, Northern Iron (NFE) completed a fresh capital raising and dropped A12 cents to A$1.10, Territory (TTY) fell A1 cents to A14 cents, and Giralia (GIR) fell 13 per cent to A33 cents.

Minews. Time to roam across the other sectors, starting with base metals, please.

Oz. Not a lot to report from copper, nickel or zinc. Everyone seems to be waiting for recovery in base metal prices, or at least for a sign that demand has picked up. Aditya Birla (ABY), an Indian company listed on the ASX and operator of the troubled Nifty copper mine, was hammered after reports of more problems at the project. As a result it fell by 27.5 per cent to A10.5 cents. Last year this was a stock that traded as high as A$3.00. Equinox (EQN), meanwhile, fell 11 per cent to A$1.78, as a dispute with the Zambian parastatal electricity company lingered on. And last, but certainly not least, OZ Minerals (OZL) made an undistinguished return after a couple of months in the sin bin of self suspension, opening at A71 cents and falling to A65 cents. This puts OZ still A17.5 cents short of the proposed acquisition price from China Minmetals, its preferred suitor.

Nickel stocks were as flat as copper, as the nickel price bumped along at under US$10,000 per tonne. Mincor (MCR) was the only company swimming against that tide, A1.5 cents better off at A70 cents. But Mirabela (MBN) dropped 22.6 per cent, even in spite of optimistic talk from the company’s management about funding for its proposed mine development in Brazil. Heron Resources (HRR) was another faller, dropping by 20.5 per cent to A13.5 cents, despite similarly optimistic noises about a big new laterite mine. Zinc stocks barely rate a mention, as all producers struggle with a US49 cents per pound zinc price.

Minews. Final call, uranium, coal and specials please.

Oz. Despite a theoretical spot price which remains relatively weak, there were fresh signs of interest in uranium. Extract (EXT), which is caught up in Rio Tinto’s raid on Kalahari, jumped an eye-catching 26.4 per cent to A$2.30. Mantra (MRU) also attracted attention as announced further progress on its Tanzanian projects. Traders bid the company’s shares up by 14.5 per cent to A$1.26 on that news, some key buyers coming in in the form Highland Park, a vehicle for ex-LionOre executives. Also better off in the uranium space was Uranex (UNX), up 14.3 per cent to A19 cents, but how much this means isn’t clear, as Uranex has been yo-yoing in price for the past six months.

There was also a fair bit of interest in coal as Coal of Africa (CZA) continued to show signs of a sustained recovery, rising A2.5 cents to A90 cents. Notable share price weakness in the space came from two of the better-known miners in Australia, Whitehaven (WHC) and Gloucester (GCL), after they announced merger plans. Both promptly fell: Whitehaven by 13.2 per cent to A$1.45, and Gloucester by A10 cents to A$3.40.

The only special worth mentioning was a successful new float - a very rare event indeed these days. Dragon Energy (DLE) is looking for phosphate in Queensland, and, naturally, has a Chinese investor as its cornerstone shareholder. Its A20 cents shares started trading on Thursday at A21.5 cents, and closed on Friday at A24 cents, a 20 per cent gain for stags.

Minews. Thanks Oz.

 

[drillinto]

June 14, 2009

That Was The Week That Was … In Australia

By Our Man in Oz
www.minesite.com

Minews. Good morning Australia, it looks like iron ore was the hot commodity on your market last week.

Oz. Very much so. There were fabulous profits to be had all round for followers of the iron ore sector last week thanks to Rio Tinto’s proposed deal with BHP Billiton and the dumping of a Chinese suitor, Chinalco. And investors seized on angry comments from aggrieved Chinese officials who seemed to hint at a re-allocation of iron ore buying orders away from BHP and Rio, and over to anyone else. Much of the reaction was theatrical because China simply cannot do without BHP and Rio, but there seems little doubt that Chinese steel mills will now do all they can to sponsor rival projects, perhaps develop their own, or perhaps buy another producer, such as Fortescue Metals Group (FMG).

Minews. Presumably it was FMG which led the way up.

Oz. It was, as Fortescue rose by a very sizeable A97 cents to A$4.15. At one stage on Friday FMG was trading at A$4.55, though the fact that the stock crossed the A$4 mark was significant itself because that’s the first time it’s been that high since last October. Adding to interest in the stock was an official speeding fine for FMG which was treated by followers of the sometimes controversial company as a badge of honour. Naturally, management said it wasn’t aware of what was driving interest in the stock, which means they were about the only people in Australia claiming to not know about the Chinese reaction to the BHP/Rio deal, and its knock-on effects.

Minews. Right then. Let’s start with iron ore, before flipping across to gold which was the favourite commodity at the World Resource Investment Conference in Canada last week.

Oz. After FMG, which is widely seen as a takeover plum for China because it already owns a railway and port, it was the turn of those smaller iron ore stocks which have struck a transport deal with FMG. BC Iron (BCI) was one of the stars, thanks to a recently signed deal that could see it start shipping next year. It rose by A46 cents to A$1.33, well on the way back to a 12-month high of A$1.65, set at this time last year. FerrAus (FRS) wasn’t far behind, with a rise of A20 cents to A53 cents. Meanwhile, Iron Ore Holdings (IOH) added A28 cents to A85 cents. And Gindalbie (GBG) came back strongly after a few bad weeks, rising by A12 cents to A90.5 cents, fired up by very optimistic comments from chairman, George Jones, who was attending investment talks in Beijing last week.

Minews. That must have put Jones at the centre of the action.

Oz. It did, and I was fortunate enough to track him down to his hotel during the week. Over a brief chat he made it clear that the Chinese were mightily annoyed with both Rio Tinto and BHP Billiton. However, he also added that Gindalbie has already secured its Chinese partner in AnSteel, so he’s a bit of a sideline observer, though one in the good books of the Chinese.

Continuing on with prices there was a man missing in action, but likely to make a star return next week. Atlas Iron (AGO) is in voluntary suspension, with local media speculating that management is seeking to raise A$100 million in fresh capital to accelerate mine development plans. When suspended on Tuesday Atlas was trading at A$1.70, having risen from A$1.50 in late May. Digressing for a second, our exchange was closed on Monday for the Queen’s Birthday holiday – same Queen as you but different birthday, which is rather curious.

Minews. Best if you stick to the market and leave the Queen alone.

Oz. Sorry. Finishing with the small irons, there were one or two other movers of note. Warwick Resources (WRK), a stock we hear little of, was one. We might hear more of it in the future, as it rose by A6.5 cents to A22 cents after reporting an expanded resource base at its Jimblebar prospect in the north of Western Australia. Also on the up, Territory (TTY) added A5 cents to A27.5 cents, Cape Lambert (CFE) rose by A5 cents to A37 cents, Northern Iron (NFE) rose by A27 cents to A$1.60 and United Minerals (UMC) managed a modest gain of A1 cent to A$1.05. The only iron stock to fall was Grange (GRR), which slipped A2 cents lower to A61.5 cents.

Minews. Over to gold now, please.

Oz. Not a lot to report really with the gold price losing ground for much of the week and the Aussie dollar rising to A82 cents. The two stand-out movers were Kingsgate (KCN), which came within an inch of cracking the A$7.00 mark on Thursday when it set a new 12-month peak price of A$6.98. On Friday, it eased back a fraction to end the week at A$6.90 for a gain of A31 cents. The other star was an old favourite which has been pretty moribund for a few years, Eurogold. On Friday, Eurogold’s chairman, Peter Gunzburg, quietly slipped out a one page announced which said the company had realised certain investments and had A$14.5 million in the bank, equivalent to A23 cents a share. Given that the stock had closed the previous night at A12 cents there was quite a reaction, with Eurogold adding A7 cents to end the week at A19 cents. But, there’s more. Not only is the stock still below cash backing but it’s due to receive another US$3 million next month from further asset sales which will lift the cash backing per share by A5.8 cents. The equation will then show a stock at A19 cents with A28.8 cents backing each share.

Minews. Watch Eurogold closely because Gunzburg is not going to sit on a pot of cash forever. Let’s rush through the gold sector and then slide across to uranium and base metals.

Oz. Most other gold moves were down, with Andean (AND) and Adamus (ADU) the exceptions. Andean rose thanks to reporting a lift in its Cerro Negro gold resource to three million ounces. Shares in Andean hit A$2.08, before falling back to end the week at A1.95, a gain of just A2 cents. Adamus added A1.5 cents to A41.5 cents after giving the green light to its Southern Ashanti gold project in Ghana. Going down, we saw Perseus (PRU) lose A7.5 cents to A90 cents, and Norton (NGF) drop A2 cents to A24.5 cents despite a small celebration to mark the start of underground mining at its Homestead project near Kalgoorlie. Allied (ALD), Apex (AXM) and West Wits (WWI) all slipped half-a-cent lower to A51.5 cents, A20 cents, and A10.5 cents respectively.

Uranium stocks remained in strong demand, led by that tear-away Extract (EXT), which soared another A90 cents to A$6.90. On Wednesday, Extract hit a fresh 12-month high of A$6.99 and is now capitalised at A$1.5 billion, which is a big price for a small stock. Other uranium moves included Mantra (MRU), up A58 cents to A3.53, well on the way back to its 12-month peak of A$4 set on June 30 last year. Uranex (UNX) was also on the march, up A3.5 cents at A48.5 cents. Meanwhile, Deep Yellow (DYL) gained A5.5 cents to A44 cents, Toro (TOE) added A2.5 cents to A26.5 cents, and Nimrodel (NMR) rose by A1.5 cents to A10 cents after it completed a capital raising in the wake of our mid-week report.

Base metals were generally flat, with the big event of the week being OZ Minerals (OZL) winning shareholder approval to sell most of its assets to China Minmetals. OZ is now a pure copper play centred around its Prominent Hill mine, and a takeover plum. On the market, OZ rose by A13 cents to A$1.04, a price which values the owner of a single mine at a rather stretched A$3.26 billion. Among the other copper stocks, Equinox (EQN) added a fractional A1 cent to A$3.25, Anvil (AVM) gained A10 cents to A$2.05, while Exco (EXS) was steady at A30 cents after raising a fresh A$7 million.

Nickel stocks were stronger thanks to the nickel price clearing the US$7.00 per pound mark for the first time in eight months. Mincor (MCR) gained A16 cents to A$1.72. Independence (IGO) was up A39 cents to A$4.86 and Croesus Mining (CRS) made a return as a nickel play after striking a deal with Apex and prominent prospector, Mark Creasy. The deal started with a transfer of mineral tenements and a cash injection of A$7 million, which helped lift the share price of Croesus by half-a-cent to A2.1 cents.

Minews. Anything else to report before signing off.

Oz. Yes. Kagara (KZL) became the latest company to accept Chinese capital as part of a refinancing operation. That was not enough to save the stock from falling by A28 cents to A90 cents. The rest of the zinc sector was quiet.

Minews. Thanks Oz.

 

[drillinto]

August 09, 2009

That Was The Week That Was … In Australia

By Our Man in Oz
www.minesite.com

Minews. Good morning Australia. It looks like you had a busy week.

Oz. There was plenty happening, though the end result was nothing to write home about. Overall, mining shares, as measured by the metals index on the ASX, managed rise of less than 0.3 per cent, which was a surprise given the level of publicity that the sector was getting, courtesy of the annual Diggers & Dealers conference in Kalgoorlie, and given some rather solid upward moves by smaller companies. But ot even a nice rise in the gold price and a slight decline in the exchange rate, could take away the feeling that we went nowhere last week.

Minews. Was it the mining majors which kept a lid on the indices?

Oz. No, both BHP Billiton and Rio Tinto managed to rise marginally. It was more a case of the good work on three days being offset by damage done on two bad days, especially Friday, when most of the gains were wiped out by a two per cent decline in the metals and mining index. Perhaps with this week’s review we should focus on individual stocks because there really isn’t a dominant trend to discuss. So how about starting with a look at how companies on display at the Diggers conference performed?

Minews. Presumably they reacted positively on their day in the spotlight, and then tapered away?

Oz. That was pretty much the case, though there were a few which hung on to their gains. Troy (TRY) was one of the stars, choosing Diggers as the forum to announce a major reduction in the capital costs of development at the newly-acquired Casposo gold project in Argentina. The ability to marry a mothballed processing plant with the orebody has produced a 47 per cent cut in the capital outlay to just US$45 million. That, following on from earlier news of fresh gold discoveries at the company’s Sandstone operations, suddenly woke investors up to the reality that Troy is on the way to becoming the operator of three gold mines, rather than just the one which looked likely a few months ago. On the market, Troy added A22 cents to end the week at A$1.72, having touched A$1.74 during Friday trade. The stock is now just a few cents short of its 12 month high of A$1.83, reached last September.

Chalice Gold (CHN) was another company flying its flag at Diggers, and while there was no formal presentation Chalice’s chairman, Tim Goyder, was busy spreading the news that the company’s merger with Sub-Sahara Resources is close to completion. That helped Chalice trade up to a fresh 12 month high of A33.5 cents, before it eased fractionally to close at A33 cents for a gain over the week of A4 cents. Meanwhile, Silver Lake (SLR), which has become one of the darlings of the gold sector thanks to its no-frills approach to mining, also attracted a great deal of interest, adding A3.5 cents to A73.5 cents. Also on the up was Mincor (MCR), which reinforced its status as a leader of the nickel sector, adding another A30 cents to close the week at A$2.50. That was down slightly on the 12 month high of A$2.55 reached on Thursday, and thousand miles away from the lowly A45.5 cents low set at the depth of last year’s big share market shake-out.

Minews. Let’s continue picking the eyes out of the week’s trade before switching to a sector-by-sector run down.

Oz. That’s a good idea because, as we said earlier, there really isn’t a trend to follow, just a number of eye-catching moves to catch up on. Moly Mines was one of the most interesting. Not a presenter at Diggers, Moly still managed to rush back into the spotlight on speculation that its Spinifex Ridge molybdenum project is back on track thanks to a sharp rise in the price of molybdenum. Whatever the reason - and Chinese involvement in the company was also being talked about too - Moly copped a speeding ticket from the ASX, as its shares rose 77 per cent to close the week at A95.5 cents. Even that was down on the mid-week high of A$1.16.

Meanwhile, CuDeco (CDU) gave us another blast from the past as it added A63 cents to A$3.38, with no specific news reported. Still, it was in line with the revived interest in copper stocks, as also demonstrated by the charge mounted by Sandfire Resources (SFR) over the past two months. This week, though, Sandfire itself ran out of steam, shedding A27 cents to A$2.00. But another stock to star, but very much from the unknown category, was Iron Road (IRD), a South Australian iron ore hopeful which reported an encouraging 110 million tonne resource at its Warramboo project. That news was enough to see the stock more than double from A24 cents to A51.5 cents, with a brief peak above A60 cents on Friday.

Minews. Time for the sectors, starting with iron ore, which remains in the news thanks to events in your part of the world, and in Africa.

Oz. Stronger overall, as China continues to suck in vast amounts of raw material for its booming steel sector. Iron Road was the star, as we’ve mentioned. But solid rises were also posted by other emerging producers such as Brockman (BRM), which added A11 cents to A$1.30, BC Iron (BCI), which rose A7 cents to A$1.13, and Grange (GRR), which put on A5 cents to A47 cents as it continues to make headway with its Southdown project. DMC Mining (DMM) was also stronger, up A8 cents to A29 cents thanks to its African iron ore assets and strong financial support from Cape Lambert (CFE). Cape Lambert itself put on A3 cents to A38.5 cents. Moving the other way, after a strong start when it traded up to A$2.10, Atlas Iron (AGO) faded to close at A$1.92 for a decline of A6 cents over the week. This was somewhat of a surprise as Atlas won the “Digger Award” at the Kalgoorlie conference for best overall performance by a small miner during the year.

Minews. Gold and then base metals please.

Oz. Troy was the star of the week, though good rises were also posted by a number of other gold stocks. Sino Gold (SGX) gave a very positive presentation at Diggers, and rose A27 cents to A$5.56 on the market over the course of the week, although it did trade as high as A$5.72 on Tuesday. Shares in Centamin (CNT) reacted positively to the company’s announcement that it will move to the official list of the London stock exchange, adding A12 cents to A$1.86.

Meanwhile, Dominion (DOM) continues to attract support, thanks to the excellent performance of its Challenger mine. Dominion’s shares rose by A26 cents to A$4.38. Perseus (PRU) was also better off, rising A11 cents to A86 cents. But it wasn’t all good news among the gold stocks, as Scotgold (SGZ) slipped by A2.5 cents to A14.5 cents, Resolute (RSG) fell A2 cents to A60 cents, and Kingsgate (KCN) eased back by 36 cents to A$6.59.

Base metals offered the mixed picture as gold, with no discernible trend to report on. Among the copper stocks, Equinox (EQN) rose A3 cents to A$2.95 after trading as high as A$3.13 early in the week, while Anvil (AVM) rose A15 cents to A$2.55. Other copper movers included OZ Minerals (OZL), which dropped A4 cents to A$1.08, and PanAust (PNA), which slipped A3 cents lower to A38 cents. Nickel provided a similar picture. Mincor was up as mentioned earlier, Independence (IGO) added A3 cents to A$5.33, but Panoramic (PAN) lost A16 cents to A$2.60. Meanwhile, and Western Areas (WSA) eased back by A5 cents to A$6.03 after its biggest shareholder, Terry Streeter, suffered a big defeat in court in a battle over a disputed share deal. Zinc was dull, as ever.

Minews. Uranium and coal to finish.

Oz. More of the same, with one star. Extract (EXT) hit a fresh 12 month high of A$8.38 in early Friday trade, before easing to close at A$8.13 for a gain over the week of A66 cents. Mantra (MRU) managed a rise of A3 cents to A$3.80, but Uranex (UNX) dropped A3 cents to A40 cents. Biggest loser of the week was Metals Australia (MLS), which was hit by a negative court decision in Namibia. That sent the company’s shares plunging by almost 50 per cent, down from A3.1 cents to A1.7 cents. Coal stocks were generally down. Coal of Africa (CZA) slipped A11 cents to A$1.66, Macarthur Coal (MCC) lost A7 cents to A$7.77, and Riversdale (RIV) fell A32 cents to A$6.28.

Minews. Thanks Oz.

 

[drillinto]

October 11, 2009

That Was The Week That Was … In Australia

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

Minews. Good morning Australia, it’s not often you have a week when everything rises.

Oz. It was really quite bizarre. I never thought I’d see a time when Australian interest rates, the overall stock market, gold, and most other commodities all rose at the same time. In fact, I’m not sure whether what we saw last week was a good thing, or a worry that we’re at the start of another round of asset bubbles, and we all know what happens to bubbles.

Minews. Don’t be so grumpy. Why not take a rise when you get it.

Oz. Because some of last week’s moves were quite strange, and perhaps driven forces other than conventional supply and demand. The disintegration of the U.S. dollar is one factor that no-one seems to quite understand because there’s nothing to replace the dollar yet, except perhaps gold, and that’s not going to happen if governments can prevent it. Ultra-low, almost non-existent interest rates, are also fuelling irrational investment decisions because the cost of money is being held down by a flood of government stimulus spending, rising government debt levels, and quantitative easing which, we all know, is nothing more than the Zimbabwean solution of speeding up the money-printing press.

Minews. Enough of the theories, tell us what happened in Australia last week.

Oz. Overall, the stock market as measured by the all ordinaries index rose by a relatively modest 3.2 per cent, while the metals index added 6 per cent, and the gold index rocketed up by 11.7 per cent, which is perhaps the most curious move of all.

Minews. Why, surely gold stocks were in strong demand with the price holding above US$1000 an ounce.

Oz. There’s no denying the strong U.S. dollar gold price, but on conversion to Australian dollars the gold price has actually been falling all year. Last week the Australian dollar gold price rose, but by exactly half the U.S. price. Gold in Australian dollars has fallen from around A$1500 an ounce earlier this year to A$1162/oz on Friday. That was a rise of 2.4 per cent for the week while the U.S. dollar gold price rose by 4.8 per cent. All of the damage to the local gold price was caused by currency movement, with the Aussie dollar adding another US 2 cents to close on Friday at US90.48 cents, taking the gain since January to 30 per cent.

Minews. All very interesting, but what happened to share prices, starting with gold, please.

Oz. Not a fall to be found, despite a fine-toothed search. Best performance of the week came from a Minesite member, Eleckra (EKM) which reported excellent results from drilling at the Central Bore deposit on its Yamarna tenements in Western Australia. At one stage on Wednesday Eleckra had almost tripled from A6.7 cents to trade at A18 cents, but eased back to end the week at A13 cents, which is just short of doubling in the week. Best assay results from the latest drilling included three metres at 25.6 grams of gold a tonne starting at a depth of 75 metres and 2 metres at 26.5g/t. Eleckra’s Yamarna project already has close to a million ounces in the resource category, so these latest results could be what’s needed to elevate the project from exploration to development.

Other good gold moves included Centamin (CNT) hitting a 12-month high of A$2.10 on Friday, before closing at A2.04 for a gain of A34 cents. Silver Lake (SLR) traded up to A99 cents, but also suffered a late sell-off, ending at A97 cents, for a gain over the week of A8.5 cents. Kingsgate (KCN) continued to attract interest in its Chatree mine which is rapidly picking up speed after winning expansion approval from the government of Thailand. It rose A19 cents to A$8.47. Troy (TRY) made progress on construction at its Casposo project in Brazil, and despite some boardroom disquiet. It added A28 cents to A$2.42.

A quick call of other prices saw Medusa (MML), up A18 cents to A$3.45 after fresh drilling news from its Lingig project in the Philippines. Avoca (AVO) added A18 cents to A$1.69 on news of lower operating costs at its Higginsville mine. Highlands Pacific (HIG) made a return to the headlines on reports of progress at its Frieda River project in Papua New Guinea, while adding A4.5 cents to its share price which closed the week at A24.5 cents, down on the 12-month high of A26 cents reached on Wednesday. Resolute (RSG) was up A8 cents to A70 cents. Focus (FML) rose by A0.8 of a cent to A4.7 cents, and Catalpa (CAH) added A1.5 cents to A16.5 cents.

Minews. Let’s switch across to the other sectors starting with the base metals, please.

Oz. Copper led the way thanks to its strong price rise to back over US$2.80 a pound. OZ Minerals (OZL) added A17 cents to A$1.27, a move which looks especially interesting given the launch of a class action by aggrieved investors over last year’s near collapse of the company. Equinox (EQN) continues to attract support, adding A37 cents to A$3.80, but did trade up to a 12-month high of A$3.94 on Friday. Sandfire (SFR) remained a speculator’s favourite thanks to its Doolgunna discovery, rising A36 cents to A$3.76, while the list of “near-ology” beneficiaries grew to four. Talisman (TLM) we know about. It rose by A9 cents to A83 cents, and two newcomers chimed in, Chrysalis (CYS) rose by A7.5 cents to A39 cents after reporting it has acquired a tenement 20 kilometres west of Doolgunna, and Sipa (SRI) added A4.4 cents to A14 cents thanks to its Thaduna project being nearby.

Nickel stocks were also on the move up. Independence (IGO), which we took a close look at last week, rose A18 cents to A$4.53. Mincor (MCR) added A9 cents to A$2.42. Mirabela (MBN) gained A33 cents to A$2.94 and Minara (MRE) reported record cobalt production from its Murrin Murrin mine and rose A11.5 cents to A$1. Zinc stocks continued to improve as the outlook for its close metallic associate, lead, brightened on speculation of increased battery sales to the vehicle industry. Perilya (PEM) rose by A3.5 cents to A50.5 cents. CBH (CBH) gained A0.9 of a cent to A10.5 cents, and Bass Metals (BSM) moved up an eye-catching A7.5 cents to A32 cents after announcing a deal to treat material mined by the submarine mining specialist, Nautilus Minerals. The only zinc stock to retreat was Ironbark (IBG), which we also took a look at last week. It fell A4.5 cents to A18 cents.

Minews. Iron ore, uranium and any specials to finish, please.

Oz. Like gold, it was hard to find an iron ore stock which fell last week. Atlas (AGO) added A10 cents to A$1.72. Giralia (GIR) rose A7.5 cents to A$1. Fortescue (FMG) gained A14 cents to A$3.77, and Polaris (POL), which has received competing takeover bids, closed at a 12-month high of A62.5 cents, a rise of A11.5 cents. However, the stock everyone is watching is United Minerals (UMC) which asked for a suspension in trade on Wednesday amid speculation of receiving a takeover bid from BHP Billiton. While UMC was stuck at its pre-suspension price of A91 cents, its major shareholder, Thundelarra (THX) gave the game away by hitting as 12-month high of A72 cents on Friday, before easing to close at A67 cents for a gain of A3 cents over the week.

Uranium stocks didn’t miss out on last week’s strong market. Extract (EXT) reported more encouraging assays results from its Rossing South project in Namibia, an announcement which helped the stock rise by A46 cents to A$9.29. Mantra (MRU) added A17 cents to A$4.70, and Paladin (PDN) gained A45 cents to A$4.79.

Minews. Specials to close.

Oz. Interestingly, there were quite a few, mainly in the fields of platinum and lithium. Platinum Australia (PLA) rose by A6.5 cents to A91.5 cents on encouraging news from its South African operations. Nkwe Platinum (NKP) joined in with a rise of A6.5 cents to A33.5 cents. Among the lithium players, Galaxy (GXY) crept A5 cents higher, despite a big capital raising, to A$1.80, and Haddington (HDN) almost doubled after reporting a fresh lithium discovery. The stock, once best known as a tantalum producer, rocketed up from A17 cents to a 12-month high of A39.5 cents on Friday, before easing to end the week at A31 cents.

 

[drillinto]

October 17, 2009

That Was The Week That Was ... In Australia
By Our Man in Oz
www.minesite.com/aus.html

Minews. Good morning Australia. It looks like you had an up-and-down week.

Oz. That’s a fair description. Three up days, and two down days, which produced a relatively flat overall result. The all-ordinaries index on the ASX rose 1.8 per cent, the mining index rose by 3.3 per cent, but the gold index slipped by a marginal half a per cent.

The sectors told the same story. Iron ore was hot thanks to the proposed takeover of United Minerals (UMC) by BHP Billiton. Gold was flat, while base metals and uranium were mixed, trending up. The bogeyman for Australian investors, the local dollar, was strong again, adding another US2 cents over the course of the week, taking its gain since June 30 to US11 cents, or 13.8 per cent in less than four months, with half of that rise coming in the past month.

Minews. Presumably there is still talk of parity with the US dollar?

Oz. Absolutely, with the mooted timing of that event moving from mid next year to early next year, especially if Australia’s Reserve Bank does what it was tipped to do this week and rapidly lifts interest rates. The 0.25 basis point rise earlier this month has been absorbed without any reaction in the broader economy, except to boost confidence. The bank is now talking about a series upward moves, starting as early as next month to get away from the “emergency” rate setting of the past year.

Minews. Which puts you completely out of step with the rest of the world.

Oz. Out of step with the rest of the English speaking and European world certainly, a situation which reflects that fact that Australia is very much plugged into fast-growing Asia, and much less reliant on the slow-growing US and Europe. The lucky country is a hackneyed term for Oz, but it’s coming true again, this time because no-one spotted that the real effect of global government stimulus spending is that it requires more resources, and that’s what Australia sells. It actually doesn’t matter whether it’s the private sector spending, or government, it all consumes steel, copper, aluminium and zinc.

Minews. Enough of the economic theories, time for prices, starting with iron ore and that UMC deal, please.

Oz. The target itself, UMC, traded as high as A$1.28 and closed at A$1.27, A3 cents short of the BHP offer price of A$1.30, a pretty good sign that no counter bid is expected. That rise represents a gain of A36 cents on UMC’s last sale which was back on October 6 when management requested a suspension in trade. However, the deal and the price is not what really caught the attention of local observers who have been quick to point out that BHP has just given China Incorporated another black eye. Followers of UMC will remember that it had already struck a deal with China Railway Commercial to give the Chinese an 11.4 per cent stake in UMC, while it busily proves up the Railway iron ore deposit which butts into an existing BHP mine. Given that it is less than a year since BHP gazumped China’s plans to snatch control of Rio Tinto (RIO), and the Chinese were thwarted in their attempt to get all of OZ Minerals (OZL), the UMC action will not go down well in Beijing.

Minews. Oh dear, what a pity. Let’s move along and look at the rest of the iron ore sector.

Oz. There was uplift for all iron ore stocks with a number of them hitting 12 month highs. Fortescue Metals (FMG), which had been a potential bidder for UMC, added A40 cents to A$4.17. It can be expected to do even better next week as news flow increases as it hosts a full-scale media tour of its operations, a tour which will include your very own Man in Oz.

Elsewhere, Atlas (AGO) added A15 cents to A$1.87, and its merger partner, Warwick Resources (WRK) gained A8 cents to a fresh high of A60 cents. Also on the move was Giralia (GIR) which rose A21 cents to A$1.21, although the close was down slightly on a new high of A$1.24 set during Friday trade. Meanwhile, BC Iron (BCI) rose by A8 cents to A$1.16, Brockman (BRM) rose a very sharp A39 cents to A$2.17, Iron Ore Holdings (IOH) rose A7 cents to A87 cents, while FerrAus (FRS) rose A2.5 cents to A77.5 cents and Golden West (GWR) also A2.5 cents to close at A37 cents.

Minews. Since gold was flat, let’s do something different at look at any specials now, before we go to base metals, uranium and finish with gold.

Oz. That’s a good decision because we had a number of interesting situations during the week. The revitalised interest in manganese was at the top of the list, with the Minesite report on Spitfire (SPI) getting most of the credit for that stock effectively doubling last week from A8.2 cents A16 cents in early Friday trade, before settling at A15.5 cents. Other manganese stocks, which are benefiting from a looming takeover struggle for OM Holdings (OMH), also did well. Shaw River Resources (SRR) added A2.5 cents to A20 cents, and OM itself rose by A12 cents to A$1.81, but did get as high as A$1.93 on Friday.

Other specials included useful rises by the handful of Australian stocks playing in the platinum space. Platinum Australia (PLA) added A8 cents to A98.5 cents, but did trade up to A$1.10 on Wednesday after news broke that billionaire speculator, George Soros, had snapped up a nine per cent stake in the stock, his second plunge into Australian-based resource stocks in less than a month. His previous move was on the copper explorer, Marengo Mining (MGO) which had a down week, losing A2 cents to A19 cents, still about double what Soros paid.

Minews. Base metals next, please.

Oz. This is where the game starts to slow, despite continuing interest in selected copper stocks. Sandfire (SFR) was the leader after further spectacular assay results from its Doolgunna prospect. That lifted the stock by A40 cents to close at A$4.06, down from an all-time high of A$4.39 reached during Friday trade. Its near-neighbour, Talisman (TLM) added A35 cents to close at A$1.18, also down on an all-time of A$1.21 reached earlier in the day. Rex (RXM), the third run-away copper story of the past few weeks, had a down week, losing A5 cents to A$2.09. Other copper moves included Equinox (EQN), which was up A32 cents to A$4.12, Hillgrove (HGO), which was up A2.5 cents to A32 cents, and Syndicated (SMD), also up by A2.5 cents to A25 cents. Citadel (CGG) was a rare loser, slipping by half a cent to A43 cents.

Nickel stocks trended up, but not by much. Independence (IGO) and Western Areas (WSA) were the picks of the bunch, with Independence rising by A18 cents to A4.71 and Western Areas adding A25 cents to A$5.08. Another nickel stock we don’t hear much about was Fox Resources (FXR). It rose by A5 cents to A25 cents after the chairman of Western Areas, Terry Streeter, boosted his personal stake in the stock to 16.1 per cent via on-market purchases. Mincor (MCR) was steady at A$2.42 and Poseidon (POS) added half-a-cent to A29.5 cents. Zinc stocks were flat all over.

Minews. Uranium now.

Oz. Mixed, as mentioned earlier. Energy and Metals (EMA) was well supported, perhaps after its presentation at the Minesite forum in London. It added A3.5 cents to A28.5 cents. Extract (EXT) added A65 cents to A$9.94, and Manhattan (MHC) attracted interest with a rise of A9 cents to A79 cents. But after that it was generally downhill. Forte (FTE) slipped A1.5 cents lower to A17.5 cents, and Uranex (UNX) lost A2.5 cents to A27.5 cents.

Minews. And gold to finish.

Oz. Not a lot to report in a week when the earnings damage from the rising Australian dollar received closer attention. Among the best performers were Perseus (PRU) which added A10.5 cents to A$1.52, and Eleckra (EKM) which rose by A1.5 cents to A14.5 cents as interest grows in its Yamarna discovery. Laconia (LCR) was an interesting addition to the gold sector, with its freshly-floated A20 cent shares selling at an opening A25 cents, before easing to close at A23 cents, a useful premium and a reminder that the new float season is almost upon us. The only other gold move of note was Crescent (CRE) which announced the start of ore processing, enough to lift the stock by an impressive A12.5 cents to A28.5 cents.

Other gold moves were minor, either way, or not at all. Troy (TRY) was steady at A$2.42 after a tumultuous week of boardroom name-calling. Kingsgate (KCN) slipped A2 cents lower to A$8.45. Centamin (CNT) eased back by A4 cents to A$2.00. Adamus (ADU) was steady at A45 cents. Silver Lake (SLR) lost A5 cents to A92 cents, and Catalpa (CAH) gained half a cent to A17 cents.

Minews. Thanks Oz. Have fun visiting Fortescue’s Pilbara iron ore mines where it seems summer has arrived with a vengeance with temperatures already in the 40s.

Oz. At least the beer’s guaranteed to be cold at the end of the day.