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January 08, 2011

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


Minews. Good morning Australia. How did your market start the year?

Oz. It was patchy. There were a few stars, but most of the indices were down. Gold companies were hit hardest, after last week’s US$20 an ounce slide in the gold price. Coal companies held up remarkably well considering the negative publicity over the floods in Queensland’s coal country. Iron ore was mixed, base metals firmed modestly, and rare earths continued to attract plenty of hot money.

Minews. Let’s start the first call of the year with the stars, to brighten the day for our readers.

Oz. Good decision, because the overall picture is not terribly exciting. The key market index, the all ordinaries, closed the week down a fraction under one per cent. The metals and mining index was down a shade under two per cent, and the gold index lost 4.6 per cent, even allowing after the fall in the gold price was cushioned by a corresponding retreat in the US dollar exchange rate, a fall which took the Aussie dollar back below parity.

Within that gloomy picture in the background, it was possible to find solid performers in each sector, even in zinc which seems slowly to be waking. The best of the copper companies was the very well connected Red Metal (RDM), a business led by Joshua Pitt, who’s been a significant player in past Australian mining booms. Red’s share price jumped by A9 cents to A26 cents in surprisingly busy trade for a normally quiet company, especially as there was nothing fresh reported from its flagship Walford Creek project, located near Mt Isa in Queensland. Josh has always played his cards very close to his chest, so Red might be a company to watch in coming weeks.

The other copper “star” of the week was that old favourite, Bougainville (BOC) which continues to attract speculative interest on rumours that a return to one of the world’s biggest mothballed copper mines might be on the cards, 22 years after the company was driven off the Papuan island of Bougainville. Last week, Bougainville added A23 cents to A$2.02, but did trade up to a 12 month high of A$2.20 on Tuesday, when its market capitalisation came within a whisker of A$900 million, a high value for a company with one abandoned copper mine that’s likely to cost billions of dollars to re-develop.

Minews. Interesting moves. Now let’s look at the stars in the other sectors, before switching across to our normal call of the card.

Oz. The best of the coal companies, perhaps as a beneficiary of Australia’s coalfield floods, was Coal of Africa (CZA) which added a sharp A31 cents to A$1.71. Best of the zinc companies was Meridian (MII), which is re-developing the mothballed Lennard Shelf mines in the north of Western Australia. Meridian added A3 cents to A14 cents. Rare earth companies that performed well included China Yunan (CYU) and Goldsearch (GSE). These two companies are in joint venture over the Mt Dorothy project near Mt Isa, and have just reported promising assays from drilling there. Shares in both companies doubled in price over the week. China Yunan added A18 cents to A35.5 cents, and Goldsearch rose by A3.6 cents to A6.1 cents.

Gold, despite having an overall down week, had a few stars. Pick of the gold companies was Beadell Resources (BDR), which reported fresh drill hits from its Tropicana East project, including 19 metres at 12.1 grams a tonne from a depth of just 32 metres, and five metres at 39.7 grams a tonne from 41 metres. On the market, Beadell added A9 cents to A76 cents, but did reach a 12 month high of A79.5 cents on Thursday. Elsewhere, Crusader Resources (CAS) added A9 cents to A$1.27 thanks to continued encouraging drill results from its Borborema project in Brazil.

Minews. Time for the sectors, and since gold got the last mention why not start there, even if it was a down week.

Oz. Not pretty, with only a handful of companies joining Beadell and Crusader in the black. Medusa (MML) was one of those, putting in an eye-catching A24 cent rise to close at A$6.71. Adamus (ADU) added A4 cents to A85 cents, as construction steams ahead at its Nzema project in Ghana. Focus (FML) also managed to swim against the tide, just, with a rise of A0.1 of a cent to A5.4 cents. After that, it was all red ink. Fallers included Avoca (AVO), down A27 cents to A$3.25, Ampella (AMX), down A48 cents to A$2.85, Silver Lake (SLR), down A25 cents to A$2.12, Integra (IGR), down A8.5 cents to A63 cents, Gold Road (GOR), down A3.5 cents to A34.5 cents, Catalpa (CAH), down A12 cents to A$1.85, and CGA (CGX), down A25 cents to A$2.84. Also weaker was Troy (TRY), down a modest A3 cents to A$2.95, and Gryphon (GRY), down an even more modest A1 cent to A$1.79.

Minews. Base metals next please, with a bit of extra coverage of the zinc companies, which seem to be attracting attention.

Oz. Abra (AII) was the second best of the zincs after Meridian, briefly trading at a 12 month high of A28 cents before retreating back to A25 cents. The company has been asleep for so long, and on many days has attracted no sales whatsoever, that Friday’s rise was eye-catching indeed. Elsewhere, Perilya (PEM) continued its slow recovery, adding another A3.5 cents to A62.5 cents, which puts it back to where it was 12 months ago, but well ahead of its low of A36.5 cents reached in July. Other zinc moves were less interesting. Kagara (KZL) added half a cent to A81.5 cents, and Bass (BSM) and Terramin (TZN) slipped a few cents lower to A37 cents and A47.5 cents respectively.

Minews. Not much to write home about there. Are you sure there’s a zinc revival underway?

Oz. That’s the chatter among some brokers, though perhaps because they simply reckon a rebound is overdue. Meanwhile, copper remains the most active of the base metals, though most moves last week were modest either way. After Red and Bougainville the best of the copper companies was Equinox (EQN), up A9 cents to A$6.08. On the other side of the slate, Sandfire (SFR) dropped A22 cents to A$7.89, Rex (RXM) dropped A4 cents to A$2.89, OZ (OZL) dropped A3 cents to A$1.72, Marengo (MGO) dropped A1.5 cents to A38.5 cents, and Discovery (DML) dropped A4 cents to A$1.38.

Nickel companies were equally mixed. Western Areas (WSA) led the way up with a rise of A26 cents to A$6.23. Panoramic (PAN) led the way down, with a fall of A18 cents to A$2.39. Other nickel movers included Mincor (MCR), down A2 cents to A$1.86, Mirabela (MBN), up A2 cents to A$2.30, and Minara (MRE), down A3 cents to A93 cents. Independence (IGO) posted a sharp fall of A42 cents to A$7.53, but that was almost certainly gold-related.

Minews. Iron ore and coal next, please.

Oz. There wasn’t much movement in either sector. Brockman Resources (BRM), one of the targets of the mysterious Hong Kong taxi-hire firm, Wah Nam International, did best, putting in a rise of A35 cents to A$5.25. FerrAus (FRS), which is also in Wah Nam’s sights, added A3 cents to A93 cents. Murchison Metals (MMX) rebounded after a few down weeks with a rise of A16 cents to A$1.42, while Atlas (AGO) added A8 cents to A$3.03 after reporting a strong cash balance from iron ore sales. Other movers included Iron Ore Holdings (IOH), up A5 cents to A$2.25, Gindalbie (GBG) down A3 cents to A$1.36, Fortescue (FMG), up A3 cents to A$6.57, and Sherwin (SHD), down A1 cent to A20 cents.

The coal companies, as mentioned, held up well in the face of negative publicity over flood-caused export delays. Macarthur (MCC), added A42 cents to A$13.22. Aston (ATZ) rose by A12 cents to A$8.17, and Bathurst (BTU) put on A4 cents to A78.5 cents. On the negative side, Stanmore (SMR) slipped A1 cent lower to A$1.38, and Kangaroo (KRL) lost A1.5 cents to A18.5 cents.

Minews. Uranium and minor metals to close.

Oz. It was a mixed bag in the uranium sector, but most moves were in any case modest. Uranex (UNX) ran out of steam after a powerful pre-Christmas run, losing A12 cents to A69 cents. Manhattan (MHC) added A3 cents to A$1.39. Extract (EXT) slipped A9 cents lower to A$9.31, and Berkeley (BKY) closed the week at A$1.72, A1 cent lighter.

Rare earths were the pick of the minor metals, as China Yunan and Goldsearch led the way up. On the flipside, Lynas (LYC) was sold down quite sharply, though, and dropped A14.5 cents to A$1.91. Alkane (ALK) was also weaker, down A1.5 cents to A98.5 cents. Tin and zircon companies also eased back. Venture (VMS) lost A2 cents to A50.5 cents, and Gunson (GUN) shed A4 cents to A25 cents.

Minews. Thanks Oz.

Oz. And thank you London for not mentioning the cricket.
 
Why the world is teetering on the brink of agflation
by Sarah Miloudi

The price of key agriculture commodities jumped in the second half of 2010, sparking fears of a repeat of the global food crisis that struck two years ago, triggering political and economic instability in a string of developing countries.

The catalyst of this sudden jump in prices is still up for debate, however the consequences are far from ambiguous: elevated soft commodity prices combined with the growth of the world’s population, climate change and a shift in bio fuel consumption will ultimately drive up food inflation, experts believe.
The price hikes have already begun

Jim Wood-Smith, head of research at stockbroker Williams de Broe, argues that food price inflation may already be with us.

http://citywire.co.uk/wealth-manager/why-the-world-is-teetering-on-the-brink-of-agflation/a462737
 
Don't go hard, go soft.

http://www.cattlenetwork.com/Food-I...est_News.aspx?oid=1299095&fid=CN-LATEST_NEWS_

Profitability always makes a business outlook brighter, and if you’re in the cattle or hog business today, your mood is probably brighter than it has been for a few years. Yet, there are plenty of concerns that may keep you awake several nights this year.

Better prices for cattle and hogs are directly related to smaller inventories. Hog producers, for instance, have reduced their inventories to 64.3 million, according to USDA’s quarterly Hogs and Pigs report released Dec. 27, 2010. That’s a decline of one percent from the previous year, and two percent from Sept., 1, 2010. The number of market hogs was also reported down one percent from 2009, and two percent from Sept. 1. The declining inventory has boosted prices, and producers expect modest profit in 2011.

The U.S. cattle herd has also shown signs of declining inventories. USDA will release its January 1, 2011, inventory numbers on the 28th of this month, but most industry analysts expect the numbers will be down another one percent from last year.

Oklahoma State University economist Derrell Peel told Drovers/Cattlenetwork this week he expects the beef cow herd to total about 31.1 million head, which would be the lowest beef cow inventory since 1963. The number of cows and operations both have seen decline for 35 years.

Fewer cows and fewer feeder cattle contributed to rising prices during the last half of 2010, and early 2011. And strong export demand has fueled a rally in fed cattle prices early this year. The declining inventory has meant better prices, yes, but the long-term effect of a significantly reduced cow herd has many analysts concerned.

India Will Buy Onions From Pakistan, Keep Lentil Export Ban to Slow Prices

http://www.bloomberg.com/news/2011-...r-singh-bans-onion-exports-boosts-supply.html

India will import 1,000 metric tons of onions and keep a ban on exports of edible oils and lentils to slow inflation.

The benchmark wholesale-price index rose 8.43 percent in December from a year earlier after a 7.48 percent gain in November, according to a commerce ministry statement in New Delhi today. The median forecast of 30 economists in a Bloomberg News survey was for an 8.4 percent increase.

The arrival of onions, a key ingredient in local cuisine, from Pakistan will help check price gains, according to a statement from the Indian prime minister’s office yesterday. Reserve Bank of India Governor Duvvuri Subbarao may join counterparts in South Korea and Thailand in raising borrowing costs this month to curb inflation.

“Policy makers are firing on all cylinders to contain inflation,” said D.H. Pai Panandiker, president of RPG Foundation, an economic policy group in New Delhi. “The RBI may likely hike rates this month.”
 
January 15, 2011

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


Minews. Good morning Australia. It seems as if your stock market has taken the Queensland floods in its stride.

Oz. That’s an interesting point because while the human suffering has been high the reality is that the floods are a routine business phenomena, given that flooding occurs at regular intervals in that part of the world. The reaction of coal companies is the perfect example. While newspapers focussed on the force majeure declarations of some exporters the share prices of all the coal companies we follow rose during the week – thanks to the force majeure cuts which pushed the price of coal higher.

Minews. Tough world, isn’t it?

Oz. It is, but that’s business. Overall, the Australian market had a fairly good week. The all ordinaries added two per cent. The minerals and metals index rose by 2.5 per cent, while the gold index was the weak link, creeping just 0.2 of a per cent higher following the fall in the gold price. Further share price falls for our gold companies can be expected on Monday, as the gold price dropped quite sharply after our Friday close. As has been the case in recent weeks we had a number of very strong companies, even in weak sectors, with the exception being zinc which just can’t develop any traction for a sustained recovery.

Minews. Let’s start with gold, as that seems to be attracting the closest attention.

Oz. Most gold companies managed to gain ground, which raises a question over that very small rise in the gold index. The gold index was held back because Newcrest (NCM), easily the biggest Australian gold producer, slipped by around one per cent to A$38.29, a fall linked to its exposure to the troubles in Ivory Coast where it now runs the Bonikro mine. If you shift Newcrest to one side it’s arguable that the overall gold sector was up by the same percentage as the metals and mining index, around two per cent.

Top of the gold heap last week was an old friend of Minesite, Medusa Mining (MML), which earned a speeding ticket from the ASX after an A81 cent rise to A$7.52. Along the way, on Thursday, it hit a 12 month high of A$7.71. Naturally, management knew of no reason for the price spike, but a move like that at a time when the gold price is a bit wobbly smells of corporate activity.

Kingsrose (KRM), which has a similar appearance to the Medusa of a few years ago, in that its working a high-grade epithermal vein system in the tropics, also hit a 12 month high, adding A16 cents to A$1.54. Noble Mineral Resources (NMG), one of the new players in West Africa, also performed well, adding A13 cents to A71 cents, after briefly setting a new high of A73 cents, following an excellent set of assays from its Bibiani project in Ghana. Elsewhere, Elemental (ELT) gained A7 cents to close at a fresh 12 month high of A39 cents as interest grows in its La Puerta discovery in Argentina. Dragon Mining (DRA) reported a solid resource upgrade at its Kuusamo project in Finland, adding A10 cents on the market to close at A$1.70. YTC (YTC), reported bonanza grade assays from its Hera project in New South Wales, rising by A4.5 cents to A57 cents, and PMI (PVM) made its first solid upward move after a lacklustre listing late last year, rising by A9 cents to A65 cents on the strength of good drill results from Ghana.

Most other moves were modest either way. Gains were posted by Gryphon (GRY), up A9 cents to A$1.88, Avoca (AVO), up A10 cents to A$3.35, Resolute (RSG), up A9 cents to A$1.47, Catalpa (CAH), up A12 cents to A$1.97, Nyota (NYO), up A3 cents to A46.5 cents, and Ampella (AMX), up A8 cents to A$2.93. Losses were posted by Silver Lake (SLR), down A2 cents to A$2.10, Sirius (SIR), down A1 cent to A30 cents, Crusader Resources (CAS), down A10 cents to A$1.17, and Adamus (ADU) down A3.5 cents to A81.5 cents. Also weaker was Reed Resources (RDR), which fell A8.5 cents to A66.5 cents after taking the courageous step of buying the Meekatharra gold project which has broken the back of at least five previous owners, including the London-listed company formally known as Mercator Gold.

Minews. You think Reed might be taking a step too far?

Oz. The jury is out, but going back into gold when you seem to be doing well with a lithium project and a re-emerging vanadium project, might be a stretch for a small company.

Minews. The fuel twins, coal and uranium next, please, as they seem to be heating up.

Oz. Coal companies did well, following the flood-induced export cuts, while uranium companies benefited from a US$3.00 increase in the spot uranium price to around US$66 per pound. Aspire (AKM) was the best of the coal companies after it reported a fresh discovery in Mongolia. It rose A14 cents to a 12 month high of A61.5 cents. Bathurst (BTU), the New Zealand coking coal developer, rose A10 cents to A88.5 cents, but did hit a 12 month high of A91 cents during Friday trade. Other coal movers included Coalworks (CWK), up A12 cents to A90 cents, Carabela Resources (CLR), up A25 cents to A$1.39, Aston (AST), up A20 cents to A$8.39, Coal of Africa (CZA), up A8 cents to A$1.79, and Continental Coal (CCC), up A0.6 of a cent to A8.7 cents. Riversdale (RIV) was the only major coal company to lose ground, shedding A29 cents to A$16.48 as reports surfaced that Rio Tinto might drop its takeover bid.

Most uranium companies rose, and those that didn’t were steady. Pick of the pack was Northern Uranium (NTU), which jumped A14 cents to a 12 month high of A53.5 cents, though interest was perhaps driven by its growing exposure to rare earths. The oddly-named U3O8 (UTO) also set a new high of A21 cents on Friday, before closing up A2.5 cents at A20 cents. Berkeley (BKY) shook off uncertainty about its deal with a Russian suitor, rising by A10 cents to A$1.82. Uranex (UNX) resumed its upward movement with a rise of A4.5 cents to A73.5 cents. Deep Yellow (DYL) also put on A4.5 cents to end the week at A36.5 cents, and Greenland Minerals (GGG) rose by A6 cents to A$1.28.

Minews. Iron ore next, please.

Oz. Like the other sectors, iron ore had a few stars that shone, amid a general upward trend. The stand-out performers, reaching new 12 month highs, were Northern Iron (NFE), the Norwegian magnetite exporter, which added A13 cents to A$1.91, and BC Iron (BCI), which is getting ready to make its first shipment of ore to Asian, and rose by A29 cents to A$3.15. African Iron (AKI) delivered a strong performance after re-listing with an old Cape Lambert asset as its centrepiece, and added A18 cents to A42 cents. Equatorial Resources (EQX), another of the Australians making waves in the African iron ore sector, delivered a sharp A60 cent rise to A$3.95, while and FerrAus (FRS), one of the takeover targets of the mysterious Wah Nam International (WNI) gained A11 cents to A$1.04.

Wah Nam was also the focus of the news event of the week, copping a stop order from the Takeovers Panel in regard to its second target, Brockman Resources (BRM). A preliminary finding from the Panel found that companies associated with Wah Nam might have breached the Australian Takeovers Code. A full hearing is scheduled for the next week. On the market, Brockman added A5 cents to A$5.30. Other iron ore movers included Iron Ore Holdings (IOH), up A4 cents to A$2.29, Atlas (AGO), up A26 cents to A$3.29, Giralia (GIR) up A40 cents to A$4.88, and Fortescue (FMG), up A28 cents to A$6.85.

Minews. Base metals and minor metals to finish.

Oz. Base metal stocks were flat, but minor metals continued to generate excitement, especially the rare earths. Among the coppers there was one outperformer, Hot Chili (HCH), which shot up to a 12 month high of A58.5 cents on Friday before closing the week at A54 cents, for an overall gain of A3.5 cents. Other copper companies to rise included OZ Minerals (OZL), up A4 cents to A$1.73, Discovery Metals (DML), up A3 cents to A$1.41, and Resources and Investment (RNI), up A5 cents to A$1.12. Fallers included Altona (AOH), down A2 cents to A44 cents, Equinox (EQN), down A16 cents to A$5.92, Sandfire (SFR), down A10 cents to A$7.79, and Bougainville (BOC), down A3 cents to A$1.99.

Nickel companies did slightly better. Western Areas (WSA) reported strong production numbers for 2010, and added A46 cents to A$6.69. Mincor (MCR) continued its slow recovery, putting in a rise of A5 cents to A$1.91. Panoramic (PAN) rose A10 cents to A$2.49, and Independence (IGO) gained A21 cents to A$7.74.

Zinc went nowhere, as we’ve already mentioned. Most moves were a cent or two either way. Meridian (MII) lost A1 cent to A13 cents. Bass (BSM) rose half a cent to A37.5 cents, and Perilya (PEM) lost A2.5 cents to A60 cents.

Arafura (ARU) was the top rare earth company after it reported on higher market prices for its cocktail of odd metals, adding A15 cents to A$1.56. Lynas (LYC) rose A12 cents to A$2.03, and Alkane (ALK) went back over the A$1.00 mark to end the week at A$1.06, up A8 cents.

The handful of platinum companies listed on the ASX reacted positively as platinum rose through the US$1800 per ounce barrier. Platinum Australia (PLA) added a sharp A18.5 cents to A80 cents, and Zimplats (ZIM) put on A45 cents to A$15.20.

Minews. Thanks Oz.
 
January 17, 2011

Sell Copper, Buy Gold
By Rob Davies
www.minesite.com/aus.html

Anyone who felt optimistic, after the year started with a good rally in commodity and equity markets, only needs two hours with the Cross Asset Research Team of Société Générale to feel quite different.

In a densely packed presentation the three man team, led by Albert Edwards, has detailed exactly how big the bubble of the Chinese economy is, and how bust Western Governments, and the banks they own, really are.

They argue that all emerging markets are overvalued, but that the boom in China is of an order of magnitude different because of its sheer scale. As an example, they quote the 800 per cent increase in land prices in Beijing in the last seven years. A key reason for that price increase is that Chinese interest rates are a third of what they should be for an economy growing at 15 per cent.

Instead the authorities in China are trying to soak up the massive increase in foreign exchange reserves, arising from its artificially depressed currency, by a massive infrastructure spending boom. At 60 per cent, that level of investment relative to GDP is unprecedented and unsustainable. In addition, bank lending is simply out of control.

The whole economy is like a train speeding downhill with a wobbly wheel. You know a crash will happen, you just don’t know when. The consequences of such a crash will be dire for bulk commodities and base metals, especially copper, and will have a major impact on countries like Australia.

But until then, despite a freak economy, it is about the only game in town - so hang on but be ready to jump. Oh, and one other thing. The demographic time bomb of a rapidly ageing population is far worse in China than it is in either the US and Japan. And they are horrific enough in those two countries.

This increase in the average age of the populations of the world’s largest economies underlies SocGen’s positive view on gold. Although they didn’t actually come out and say buy the yellow metal. Everyone knows that sovereign debt has exploded in recent years, and that most countries have debt to GDP ratios of close to 100 per cent.

What these economists have done is add in the other liabilities, such as healthcare and pensions. Then the figures look truly scary, as debt to GDP in many countries, including the US, shoots up to around 500 per cent.

And everyone knows, too, that politicians will not honour these obligations, and the only option that will avoid triggering riots is to monetise the debt through inflation. As always, history is a great guide to what might happen. One fascinating graph the SocGen boys present charts the reduction in the silver content of Roman coins from over 90 per cent in the year AD 64 to about five per cent by the reign of Claudius II in 268.

These days they call it Quantative Easing but the effect is the same. Governments defraud savers, as the value of savings is eroded and wealth is transferred from savers to borrowers who can’t afford to repay their obligations. In the modern world that means home owners and governments.

Another telling slide makes the point that Japanese tax revenues do not even cover its non-discretionary expenditure like debt servicing, social security and education. Inflation is the only way that Japan, and most of the other governments, will be able to bridge that gap. Someone described gold as a hedge against the stupidity of politicians. It looks as if that case has now been well and truly been proven.

This rather depressing snapshot of the world may be too gloomy for some. Indeed, these problems many not come to a head for years, or even decades. But to ignore them altogether may not be very sensible. You have been warned.
 
January 22, 2011

That Was The Week That Was ... In Australia
By Our Man in Oz
Source: www.minesite.com/aus.html [FREE REGISTRATION]


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

Oz. It was certainly tough for most of the miners, but there was also the odd outbreak of optimism, just to show that the speculative spirit is alive. All of the major indices ended down. The gold index was hit hardest, and shed 4.4 per cent. The metals and mining index dropped by three per cent, and the all ordinaries held up rather well, losing just one per cent.

Minews. Apart from the gold price weakness, was there any other reason for the sell-off?

Oz. China worries seem to be a factor across all sectors. Despite the strong growth figures still coming out of China, there is concern that the government over there will soon crack down on inflation by means of further interest rate rises and reduced bank lending. If that happens it might dim demand for Australian exports. The Queensland and Victorian floods also had a negative effect on sentiment, but the financial cost seems manageable, even if it leads to a one-off tax levy to raise A$20 billion, or so.

Minews. Enough of the big picture, let’s have some prices.

Oz. Right. Good news first, fallers later. That way our London readers will be starting out with a look at the smaller companies which caught the eye of traders down this way, and there was quite a selection.

Minews. Good news is always welcome. Let’s hear it.

Oz. The prize for biggest rise of the week went to Mt Isa Metals (MET) which at one stage came close to doubling as the shares ran up from A48 cents to a 12 month high of A80 cents during trading on Friday. Mt Isa eventually closed the week at A70 cents, a gain of A22 cents, a rise that following in the wake of a a suite of excellent assays from its Nabanga gold project in Burkina Faso. The best result, reported on Thursday, was eight metres at 14.01 grams a tonne from a depth of 26 metres, followed by three metres at 24.62 grams per tonne from 59 metres. Gold mineralisation of more than 0.5 grams per tonne has been noted over a 3,600 metre line of strike, with the average coming in at 4.6 metres grading 5.66 grams per tonne.

Minews, Impressive results. Did they get much coverage in your news media?

Oz. Barely a mention. Only a couple of trade publications picking up the story, which is interesting for a number of reasons. The company itself is approaching the A$100 million market capitalisation level, and it has skilled management led by John Bovard, an old hand who some of your readers might remember as the man in charge, in its early days, of the Kalgoorlie Superpit gold mine, and then later on, at Greenwich Resources.

Minews. Indeed. What else is going on?

Oz. Other stocks which do not often get a mention in the mainstream investment media, but which did well last week, included two coal explorers, Attila Resources (AYA) and Universal Coal (UNV). Atilla only listed late last year, with coal in Western Australia as a target, but this week it jumped A16 cents higher to A77 cents, and did get as high as A80 cents on Friday, double its opening day price on December 8th. Universal Coal, meanwhile, is the latest Australian explorer to try its luck in South Africa’s coalfields, and added A11.5 cents to A57 cents.

The gold explorer which caught the eyes of traders, though we are yet to discover why, was Jaguar Minerals (JAG), which effectively doubled from A2.6 cents to A5 cents. Jaguar has projects across Australia, and at the moment its Mt Darlot joint venture with Barrick Gold looks the most promising. Among the other upward movers was Atomic Resources (ATQ), which is looking for gold and uranium in Tanzania. It added A4 cents to A57.5 cents. Also better off was Voyager Resources (VOR), which is exploring in Mongolia, and which rose by A3.5 cents to A55 cents, but did trade up to A66 cents on Friday. Elsewhere, Uramet (URM), which has switched its focus to gold in the South American country of Guyana, put on A1.5 cents to A17 cents, a 12 month high. Sovereign Gold (SOC) added A3.5 cents to A24.5 cents after completing its first drill hole in the historic Rocky River-Uralla goldfield in New South Wales, but with no assays to report yet. And one of Minesite’s old favourites, Scotgold (SGZ), shot up by A2.8 cents to A9.6 cents after reporting encouraging assays from its Auch project in Scotland which, fortunately, lies outside the national parks which stopped its flagship Cononish project last year.

Minews. Thanks for that burst of good news, which probably took a bit of prospecting on your part.

Oz. It did, but the results were worth it because they showed that hidden gems can always be found in the market if you look hard enough. A couple of other risers also merit a mention, because their share price movements, courtesy of speculators, could be pointers to future news. Prairie Downs (PDZ), one of the lost souls in the sickly zinc sector, attracted a bit of attention and put in a sudden upward move to a 12-month high of A25 cents on Friday. At the close it had slid back to A18.5 cents, for a gain over the week of A1.5 cents. Meanwhile, one of Minesite’s quieter members, Sabre Resources (SBR) recovered recently lost ground with a rise of A4 cents to A22 cents, but did trade as high as A24 cents on Friday, perhaps due to a revival of interest in its Namibian copper exploration project..

Minews. I think we’re now sufficiently softened for the bad news. Let’s start the call of the card, starting with gold.

Oz. Apart from Scotgold’s revival there were only three other gold companies that finished in the black, alongside one interesting producer which held its ground. Ampella (AMX) managed a rise of A3 cents to A$3.00. Silver Lake (SLR) recovered recently lost ground, and delivered a rise of A8 cents to A$2.18. Thor (THR) also continued to recover, putting on A0.3 of a cent to A4.7 cents. Apex (AXM), which almost disappeared from view thanks to trouble at processing plants in Western Australia, held its ground at A2.6 cents after reporting increased resources at its Wiluna mine, production of 19,500 ounces of gold in the December quarter, and a 30 per cent fall in costs to A$890 an ounce.

Now for the falls. Adamus (ADU) fell A6 cents to A75 cents, despite pouring first gold at Nzema. Kingsgate (KCN) fell A59 cents to A$10. Resolute (RSG) fell A3 cents to A$1.44. OceanaGold (OGC) fell a sharp A38 cents to A$2.88. Newcrest (NCM) fell A$1.58 to A$36.71, in the wake of problems at three of its mines. Gryphon (GRY) fell A23 cents to A$1.65. Perseus (PRU) fell A17 cents to A$2.95. Kingsrose (KRM) fell A9 cents to A$1.45, and Medusa (MML) fell A36 cents to A$7.19.

Minews. Time’s short. Let’s move quickly now, with base metals next.

Oz. Apart from the rise from Sabre, which we mentioned earlier, there were only two copper companies that gained ground. Rex Minerals (RXM) rose by A23 cents to A$2.97, but did get as high as A$3.12 on Wednesday. And Exco (EXS) added A1 cent to A52.5 cents. After that there was a long list of fallers, led by Sandfire (SFR), down A43 cents to A$7.36, Bougainville (BOC), down A22 cents to A$1.77, OZ Minerals (OZL), down A6 cents to A$1.67, Altona Mining (AOH), also down A6 cents to A38 cents, and Marengo (MGO), down A3 cents to A34.5 cents.

All nickel companies fell. Mincor (MCR) fell A6 cents to A$1.85. Panoramic (PAN) fell A11 cents to A$2.37. Western Areas (WSA) fell A24 cents to A$6.45, and Independence (IGO) fell A71 cents to A$7.01.

All zinc companies, apart from Prairie Downs, also lost ground, but not much, which is what you might call an interesting negative. Meridian (MII) was down A1.5 cents to A11.5 cents. Ironbark (IBG) fell by A2.5 cents to A27.5 cents, while Perilya (PEM) and Bass (BSM), both slipped half-a-cent lower to A59.5 cents and A37 cents respectively.

Minews. Iron ore next, please.

Oz. Mainly down, but with a few handy rises. Best performers were BC Iron (BCI) and Grange Resources (GRR). BC Iron accepted a takeover bid from Hong Kong’s Regent Pacific Group, and added A13 cents to A$3.28. Grange Resources reported strongly profitable production from its Savage River mine in Tasmania, and rose by A7.5 cents to A85 cents. The fallers were led by Fortescue (FMG), which fell A36 cents to A$6.69 following the exit from its share register of Singapore’s sovereign wealth fund, Temasek. Other movers included Iron Ore Holdings (IOH), down A4 cents to A$2.25, Mt Gibson (MGX), down A5 cents to A$2.14, and Brockman (BRM), down A30 cents to A$5.00. Moly Mines (MOL) also fell, down a sharp A26 cents to A$1.16, after it hit fund-raising problems

Minews. Now for the fuel twins, coal and uranium.

Oz. Coal remained popular with local investors, and uranium should have done better as the spot price is now up to US$68 a pound. Among the coal companies Aspire (AKM) continued to rise, adding A12 cents to A73.5 cents. Aston (ATZ) rose A16 cents to A$8.55. Carabella (CLR) shot up by A23 cents to A$1.62. Coalworks (CWK), added A3.5 cents to A94 cents, and Bathurst (BTU) put on A16 cents to A$1.04. The only significant decline came from Coal of Africa (CZA), which lost A19 cents to A$1.60.

Uranium companies failed to respond to the higher spot market, though most falls were modest. Berkeley (BKY) slipped A3 cents lower to A$1.79. Manhattan (MHC) lost A4 cents to A$1.38. Uranex (UNX) was A4.5 cents weaker at A69 cents, and Paladin (PDN) did worst of all with a drop of A37 cents to A$5.04 after it reported an expected production shortfall.

[To comply with ASF article length requirements, I have deleted five lines on minor metals]

Minews. Thanks Oz for finding a positive spin on a poor week.
 
2011- Year of the Rabbit

Key China wheat growing province hit by drought

(AP) – 2 hours ago

BEIJING (AP) — China's key wheat growing province of Shandong is facing its worst drought in at least 40 years, putting further pressure on politically sensitive food prices that have been surging for months.

Drought has hit more than half of the land in the province normally used to grow wheat — about 5 million acres (2 million hectares) — and that number is rising, according to a notice posted Monday on the provincial water bureau's website.

Many areas have seen no precipitation in four months, and 872,263 acres (353,000 hectares) of spring wheat has already dried up or is beginning to fail, it said. More than 240,000 people and 107,000 head of livestock already have lost access to drinking water and are forced to rely on deliveries from fire trucks.

Unusually dry conditions have spread across much of China's northeastern bread basket, including the provinces of Henan, Shanxi, Hebei, Jiangsu and Anhui. The capital Beijing has yet to receive snow this winter, although water supplies have not been affected.

Dry weather and higher-than-average temperatures are forecast well into spring. Scientists say it is a result of the La Nina effect that is also responsible for the harsh winter weather still gripping large parts of China's south.

Premier Wen Jiabao drew attention to the potential drought disaster with a weekend visit to Henan, where he called on local officials to make greater efforts to assist farmers.

Not only do hundreds of millions of Chinese rely on farming to make a living, but good harvests are crucial to keeping meat, grains and vegetables affordable for the vast majority of lower-class Chinese who spend one-third or more of their income on food.

Rising food prices sent the inflation rate to 4.6 percent in December after hitting a 28-month high of 5.1 percent the month before. That put inflation for the full year at 3.3 percent amid blockbuster 10.3 percent economic growth.
 
January 24, 2011

A Tightening Of Reporting Standards Is Required To Help Investors Avoid The Geese That May Never Fly
Source >> www.minesite.com/aus.html

David Hall, executive director of Stratex, and non-executive chairman of Horizonte Minerals, argues in favour of a more rigorous application of reporting standards to help investors sort the geese from the swans.

At the end of last year, Charles Wyatt wrote, here on this website, that demand for metals and minerals should stay high in 2011, and that as a result, there would likely be a spate of takeovers and new listings. He sounded a word of warning, too, though. “A number of these IPOs will be geese dressed as swans in order to maximize profits for the founders in the shortest possible time. Investors who avoid the geese; are wary of rare earths; and keep a look-out for political risk should make money in 2011”.

I believe there should be some fundamental changes in reporting to help investors with only a modicum of knowledge of the mining sector to work out which projects will truly fly as swans. The application of reporting standards does help, yet these for the inexperienced are hard to follow mainly because of the science/rationale behind them.

In my view there are three ways to improve the situation, and to show the pitfalls that may arise for investors: outlawing the use of metal equivalents, providing greater clarity in results as to the relative breakdown of oxide, transition, and sulphide ore, and the restricting the application of economic studies to inferred resources.

Assays released by companies as metal-equivalents are misleading and can imply a greater value than the true value. Using silver to make gold-equivalents and gold to make copper equivalents does not necessarily show true economic potential. Why? Because metallurgical recoveries can vary dramatically from deposit to deposit. Quoting a gold-equivalent based on silver and gold can be misleading if gold recoveries are 90% but silver only 50%. Likewise with copper-equivalents, whether it is a gold-copper-moly system or copper-gold only, the recoveries are highly unlikely to be the same.

But for many projects at the exploration results stage, metallurgical recovery information may not be available. That’s why the JORC code states that “for many projects at the exploration results stage, reporting in terms of metal equivalents may not be appropriate”. My view is that it is not appropriate.

Next to assist in the evaluation process is the breakdown of results into oxide versus sulphide. As we know in the industry, there can be a huge difference in the metallurgy, the recoveries and the costs depending on whether you are dealing with an oxide ore or a sulphide ore. This is especially true of gold systems.

Many sulphide gold ores are refractory, or at least considerably more costly. It is standard to log bottom of oxide, and top of sulphide when logging drill core, and given that this is a matter of material importance to the viability of any mineralised system, this should be reported. The Pan-European Reserves And Resources Reporting Committee (PERC) code does state in reporting of exploration results that “should indicate the variability of each important mineral within the deposit”. Surprisingly, though, the reporting of oxide versus sulphide is not a categorical clear requirement under current reporting standards, although in practice most gold companies do differentiate when they are reporting.

Lastly, there should be a far more rigorous approach to the application of scoping studies on inferred resources. Time after time we read of companies undertaking scoping studies using assumptions that would be far more appropriate for reserves, but applying them instead to inferred resources that may never even convert or at least only in part to indicated and measured resources, let alone reserves. Inferred resources are that part of a mineral resource for which tonnage, grade and mineral content can be estimated with a low level of confidence. It is inferred from geological evidence and assumed but not verified geological and/or grade continuity.

The PERC Code states: “inferred mineral resources may only be included in mine design, mine planning and/or economic studies provided that there exists a mine plan and a statement of mineral reserves”.

It goes on to state: “for avoidance of doubt, it is reiterated that caution should be exercised if this category [inferred] is considered in technical and economic studies. At the discretion of the Competent Person, a Company may include all or part of its Inferred Mineral Resource for the purpose of internal planning, scoping or strategic studies. Any such reliance on Inferred Resources should be made clear in the report. In such circumstances, the results are not considered to be sufficiently reliable to ensure that all of the Inferred Resource will eventually become a Mineral Reserve”.

The JORC Code states, “confidence in the estimate of Inferred Mineral Resources is not usually sufficient to allow the results of the application of technical and economic parameters to be used for detailed planning. For this reason, there is no direct link from an Inferred Resource to any category of Mineral Reserve. Caution should be exercised if this category is considered in technical and economic studies”.

So the message here is: treat with extreme caution. But would it not be better just not to allow such studies? Even though the goose may be white and look like a swan there are many reasons why it may be the ugly duckling for ever. Unfortunately, even the use of Competent Persons Reports does not fully inform the market as to whether the project is a goose or a swan.

They should do. But can anyone claim to have seen a negative CPR report or, for that matter, a negative 43-101? No, because they can be equally geese disguised as swans as long as you pay the “fancy dress” fee.

In conclusion there is still a lot the relevant authorities can do to protect the investor. Investors can also help themselves seriously looking at the directors and management and the company structure to see if the founders are setting it up to list and run, and leave some unwary shareholders holding a “dead duck”.
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January 24, 2011

China Has A Speed Wobble, But There’s No Sign Yet That Growth Is On The Wane
By Rob Davies
www.minesite.com/aus.html [The registration is free]

It might seem counter-intuitive, but there is a very poor correlation between stock market returns and economic growth in the country that hosts the market. Last year the Chinese stock market fell 10 per cent, while the economy grew by 9.5 per cent. The performance of base metals has a much more direct correlation to growth.

Even so, the two per cent correction in the performance of the Shanghai stock market after the most recent data showed that China still grew at 9.8 per cent in the last quarter is a measure of the underlying concern that this speeding behemoth has to be brought under control. The Chinese authorities have already raised bank reserve requirements, and interest rates are being edged up.

But at five per cent they are probably 10 per cent lower than they should be.

The equities markets took the news of this continued growth badly. But the response of the base metals was more measured. After peaking at US$9,781 tonne on Wednesday copper fell back to US$9,484 to give a net decline over the week of 2.5 per cent.

Overall, base metals, as measured by the LME Index, fell slightly more at 2.7 per cent. In other currencies the fall was more pronounced, as the dollar fell 1.6 per cent against the euro, although the change against the commodity currencies was minimal.

In total this tells us little except that investors remain extremely nervous and are unsure which way they should jump. Do they protect themselves from inflation or deflation? Rising inflation is certainly a problem in some countries, as higher commodity prices drive up prices. And in some circles the argument goes that inflation is not a problem because once Chinese growth slows down the price pressure on raw materials will be reduced and the issue will resolve itself.

That may be, but such an outcome would not be without pain. The IMF estimates that a one per cent reduction in Chinese GDP would knock half a per cent off world GDP. That might not sound too bad, but world growth falling from 2.5 per cent to two per cent is a much bigger change than a drop from 10 per cent to nine per cent.

There is no doubt that China will slow down at some point, but it clearly won’t be just yet. Recent data from the World Steel Association showed that China remains the world’s biggest steel producer by a country mile. Output last year was a whopping 627 million tonnes.

So, while the Chinese growth rate of 9.3 per cent looks pedestrian compared to the 38 per cent increase recorded by the US, the disparity simply arises because China didn’t suffer the collapse the previous year. It is the absolute size of the figures in China that are significant, rather than the percentage changes.

Unsurprisingly this level of activity has a knock on effect. The 15 per cent growth in global steel production pushed iron ore prices to a new record of US$175 a tonne last week, and drove coking coal up to US$350 a tonne.

Like all booms this one might be unsustainable, but it sure will be fun while it lasts. The wobble in growth assets this week might be an early warning of something nasty around the corner. But no one really knows how far away that corner is.
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January 26, 2011

Export Cuts Will Be Almost As Influential As Rising Demand When It Comes To Asia And Commodity Prices
By Our Man in Oz
www.minesite.com/aus.html [Free Registration]

Auric Goldfinger, one of the unforgettable villains created by Ian Fleming for his James Bond books, is credited with the immortal lines: “Mr Bond, once is happenstance, twice coincidence, three times it’s enemy action”. While not exactly an investment thesis, there is a message in Goldfinger’s observation, and that is if you see something happen three times there is a real chance that it will happen a fourth, a fifth, and so on. Last year’s “happenstance” in world mineral markets was the cut in Chinese rare earth exports. The “coincidence” was India’s cut in iron ore exports, and the “enemy action” is China’s cut in antimony production.

Of those three, rare earths have been getting most of the headlines, thanks to a combination of strong industrial demand and China’s decision to keep more of its dysprosium, praseodymium and neodymium for its own industries. That’s made rare earths one of the best performing sectors on world stock markets, and it looks like the rare earth companies will continue to do well, until fresh projects in the US and Australia come on line. But in the wake of a decision by the Indian state of Karnataka to ban exports iron ore companies have also been star performers, as the short-term price of iron ore has soared to US$150 a tonne. And antimony producers, of which there are few, have been winners too, following a Chinese decision to close dirty and inefficient local mines, a top-down decision from Beijing which has doubled the price of the fire-retardant mineral to around US$13,000 a tonne.

In those three cases the effect on price may be the same, but the action is the reverse of the price drivers we’ve seen in recent years – namely, Asia buying more minerals from Canadian, South African or Australian exporters. Value is being created as the Chinese and Indians withdraw material from the export market, thereby creating a shortage. Bingo, up goes the price. In the case of rare earths used in high-strength magnets and rocket guidance systems, the increase has been of the order of hundreds of per cent. Iron ore has effectively doubled because of reduced supply, and antimony, has also now doubled.

From an investment perspective the way to play these supply line cuts is to view what’s happening as a variation on short-selling. You’re not buying companies that are riding strong Asian demand, you’re looking for commodities that government officials believe are important to domestic industries, and ought to have an export restriction slapped on them. Given that Chinese growth shows no sign of slowing, with India playing catch-up with gusto, the big questions are (a) what’s next, and (b) how do you profit from this “keep it at home” policy which seems to be emerging in the Asian economic giants.

The answer to the second question will remain unknown until the first is answered, and, unfortunately, it is not possible to know the inner thoughts of the mandarins in Beijing or the Indian civil service. But, as a guide it is worth calling on the thoughts of a third party witness to this game, the US Geological Survey, which, without being precise, does keep track of what it is that China produces in abundance. This list offers a starting point for an inquiry as to what the country might next see fit to restrict. After all, there must be supply constraints somewhere, as China’s 9.8 per cent December quarter growth rate means heavy demand for all forms of minerals and metals.

Antimony, for example, is listed by the USGS as a commodity dominated by China. Analysts in Washington note prophetically in their latest research: “Changes in the volume of China’s production and exports could affect prices of antimony in the world market”. Spot on, and written months before it happened. Now for the “what’s next” question, and a bit of guidance from the USGS.

Any activity involving lead and zinc, a pair of closely-related metals, would potentially be a very big event. It’s perhaps a remote possibility that China will decide it needs everything it produces for home consumption, but the USGS noted in the same document in which it dealt with antimony that “China was the leading producer of lead in the world”. Precisely the same words were used for tin and rare earths, and we know what happened when export cuts hit the rare earth market. We haven’t seen the same thing happen with tin, yet. But the list of commodities dominated by China is extensive. Soda ash, “world’s biggest”, sulphur, “gradually become one of the leading sulphuric acid producers”, salt, “world’s biggest”.

Interesting as it is to imagine some of the bigger commodities being hit by export cuts, it still seems unlikely. A more likely development is that some of the minor metals will be put on an embargo list to ensure local factories have plenty of raw material. Indium, for example, is an interesting case study because of its use as an alloy with tin, and more recently its use in the thin-films applied to liquid crystal displays (LCDs). The USGS has indium on a list of metals where China is “one of” the leading producers - along with barite, bismuth, coal, copper, fluorspar, gold, graphite, magnesium, manganese, molybdenum, silver, talc and zinc.

No-one in their right mind would see that grouping of commodities as an investment shopping list. They would, however, see that list as a useful pointer to a possible trend, especially if China and India maintain their breakneck growth rates. Because, unlike the previous growth spurts from Asian economies, like Japan and Korea, the countries doing the growing today are also big commodity exporters. For now. If/when they decide that local raw materials should be kept for local consumption the worldwide knock-on effect could be dramatic. Food for thought?
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January 31, 2011

The US Policy On The Dollar Has Much In Common With Its Policy Towards Egypt
By Rob Davies
www.minesite.com/aus.html

Financier-turned philosopher Naseem Taleb coined the phrase “Black Swan Event” back in 2007 to describe something that’s totally unexpected and outside the normal expectations of daily life. But in the last couple of years events that have not been foreseen seem to have become quite common. The most recent is the ongoing instability in Egypt, which has the potential to destabilise the whole Arab world, with consequences for the oil price that can only be guessed at.

It is often the case that while the world focuses on lots of serious-looking and potentially game changing problems, the real issue that upsets the apple cart is something that no one was paying any attention to. In 1978 there was a stalled global economy, a high oil price, ongoing conflict in Cambodia, and a decision in China by one Deng Xiao-ping to reverse the old policy of Maoism in favour of a more market-based approach. But the real game-changer at that time was the revolution in Iran that followed, and which became unstoppable in the early months of 1979. That event had a monumental impact on the global economy.

Fast forward thirty years, and there’s been heavy focus on the US deficit, the tensions in the Eurozone, ongoing war in Afghanistan, nuclear issues in Iran, and the bubble in China. It is conceivable, though, that the game changing event of our own time in terms of the investment horizon, will actually be the Egyptian insurrection.

President Mubarak might be a dictator but as Eisenhower would have said, at least he was “our sonafabitch”. If he goes, as seems likely, the implications for other governments in the Middle East could be dire. In which case we could be contemplating changes in the oil price of hundreds of dollars, not just tens of dollars. Such a massive increase would cause a sharp reduction in economic growth and may well add to inflationary pressures.

How investors prepare for such an outcome is the hardest call of all. Gold is an obvious solution, the two per cent fall in gold over the past week suggests that there’s little upward pressure at the moment. By contrast, base metals, as measured by the LME Index, edged up one per cent, with tin leading the way. Tin rose by 7.7 per cent to US$29,196 a tonne, making it the most expensive of all the base metals.

More relevant to miners was the price move from copper, which edged up a couple of dollars to US$9,489 a tonne. The positive tone in the copper space came after better than expected US GDP numbers that showed that the US economy grew at an annualised rate of 3.2 per cent in the fourth quarter. That provides some comfort to Ben Bernanke, President of the US Federal Reserve, that the additional US$600 billion he is throwing at the economy in the form of the second round of Quantitative Easing is doing some good. The US is now alone now in pursuing a policy of creating money to maintain economic growth.

But, dare we say it? - the US’s approach to sustaining its economy has some similarities to the way it’s dealt with Egypt. In the short term it made sense for the US to support a corrupt and undemocratic regime, because the uncertainty and pain that was likely to surround a change seemed be too great. In the same way every US politician knows the policy of printing more dollars is unsustainable. Uncle Sam can only abuse the status of the dollar as the world’s reserve currency once. Yet who wants to be the one that stops that gravy train and makes life difficult for all those voters?

When something can’t be sustained it won’t be sustained. Whether it becomes a Black Swan Event will then be a matter of professional and academic debate. But by then it’ll be far too late for investors.

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February 05, 2011

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

Minews. Good morning Australia. Despite storms and floods, you seem to have had a good week on the market.

Oz. Very much so. It was hard to find a company that lost ground last week, which presented a marked contrast to how the markets looked in the last couple of weeks of January. What’s more, the miners led the market, with gold doing best. The all ordinaries index added 1.7 per cent, not a bad result considering the negative publicity about cyclone Yasi in Queensland and continuing floods in Victoria. The metals and mining index put on more than double that, closing up 3.8 per cent, while the gold index was up by four per cent.

Minews. Not what might have been expected, given the likelihood of widespread storm damage.

Oz. In hindsight the impact of the cyclones and floods hasn’t caused a great deal of long-term damage to industry. In many ways it’s been more of a media and a political event than an industrial catastrophe. That might sound a rather hard observation, and there’s no doubt a lot of people have suffered losses, and there have been a number of deaths. But most of the mines that closed because of flooding are working again, or soon will be. Insurance payouts are smaller than feared, and normal business is being resumed. Which is why investors brushed off the event as just another example of the weather at work.

Minews. Enough philosophy, time for prices.

Oz. Gold was the star sector, though one might argue that it was a relief rally an earlier decline triggered apprehension that the gold price might fall below US$1,300 an ounce. Troubles in the Middle East reminded investors that gold is far more than an alternative currency, and the bounce back to US$1,350 on safe-haven buying sent most gold companies higher. Copper also did well as the price passed through the US$10,000 a tonne mark, while rare earths, lithium, potash and phosphate companies led the way among the minor minerals. Iron ore also produced a few winners, but concerns about rising costs, and worries that the super-tax will become law sooner than later, is starting to take its toll.

Minews. That super-tax of yours will not go away.

Oz. It is a worry, and a serious one because the politics of the issue are changing. Last year the miners won public support when they were able to demonstrate the importance of the industry to the economy. Last week saw a curiously negative development when the latest version of Australia’s “rich list” named two iron ore players as the richest people in the country. Gina Rinehart, daughter of the late Lang Hancock, topped the bill at US$9 billion. Andrew Forrest, founder of Fortescue Metals, was second at U$6.9 billion. The problem for the iron ore sector is how to engineer a split in the public mind between those personal fortunes and a government demand that the industry share some of the spoils. It will all probably take another turn for the worse when the big miners start reporting in the week ahead, with Xstrata, BHP Billiton, and Rio Tinto, sure to post monster numbers thanks to the boom, thereby giving the government more firepower to ram through the super-tax.

Minews. We’ll keep an eye on the tax issue. For now let’s focus on prices, starting with gold.

Oz. No stand-out performers, just a solid set of risers, and very few fallers. The companies that did best included Perseus (PRU), up A24 cents to A$2.96, and Gold Road (GOR), up A6.5 cents to A35 cents. Avoca (AVO) rose A45 cents to A$3.30, and this will be its final price as its merger with Anatolia Mines has now passed all legal hurdles, and the newly-merged business will trade in future as Alacer Gold. Among the other gold risers were Kingsgate (KCN), up A46 cents to A$9.60, CGA (CGX), up A26 cents to A$2.93, Silver Lake (SLR), up A11 cents to A$1.98, Medusa (MML), up A69 cents to A$7,23. Beadell (BDR) was also better off, up A7 cents to A76 cents, as interest builds in its Brazilian gold project.

Minews. We might take a look at that one shortly. Now, on to copper.

Oz. Strong all over for copper. There were plenty of stars, so for a change we’ll start with a short survey of recent events at the smaller end. Voyager Resources (VOR), which is chasing a big copper porphyry system in Mongolia, rose by A3.9 cents to A13 cents, and fended off a fresh speeding inquiry from ASX regulators. Just two weeks ago Voyager was trading around A5 cents. Frontier Resources (FNT), another explorer hunting “elephants”, this time the island of New Britain, added A2.5 cents to A17.5 cents. In late December, Frontier was trading at less than A10 cents. And third example of a copper company that’s recently caught the interest speculators is TNG (TNG) which was once best known as a zinc explorer, but which has recently reported excellent copper assays from its Mount Peake project in the Northern Territory. Last week, shares in TNG more than doubled, with a run from A6 cents up to a 12-month high of A14.5 cents in early Friday trade. It finally ended the week at A12 cents.

Among the better-known copper stocks companies Equinox (EQN) hit a new record price of A6.79 on Friday, before closing at A$6.65, up A69 cents for the week. Sandfire (SFR) added A42 cents to A$7.60. Rex (RXM), rose by A16 cents to A$3.09. Talisman (TLM) put on A15 cents to A88 cents. Exco (EXS) gained A5.5 cents to A58.5 cents. Hot Chili (HCH) added A7 cents to A53 cents. OZ Minerals (OZL) closed at A$1.71, for a gain of A7 cents. The only copper plays not caught in the upward trend were Marengo (MGO), which remained stuck at A35.5 cents, and Altona (AOH) which slipped A1.5 cents lower to A37.5 cents.

Minews. Let’s finish with the base metals, and then across to iron ore and coal, please.

Oz. Nickel and zinc companies put in a mixed performance, in spite of firmer nickel and zinc prices. Nickel is sitting comfortably above US$12 a pound, a price which would normally trigger a nickel boom in Australia. So far, there’s been a limited reaction to that price, though it’ll be interesting to see how long the nickel punters wait on the sidelines. Western Areas (WSA) was the best of the pure nickel companies, adding A11 cents to A$6.60. Independence (IGO) was the best of the nickels overall, allowing for the boost also provided by its gold assets. It rose by A43 cents to A$7.58. Other nickel movers included Mirabela (MBN), up A4 cents to A$2.29, and Panoramic (PAN), up A14 cents to A$2.47. Mincor (MCR) moved the other way, slipping A2 cents lower to A$1.74.

Meridian (MII) was the best of the zinc companies, posting a rise of A2 cents to A13.5 cents. Perilya (PEM) added A3.5 cents to A59 cent. Terramin (TZN) lost A4 cents to A40.5 cents, perhaps because of exposure to assets in North Africa. Bass Metals (BSM) eased back by A1.5 cents to A36 cents, and Ironbark (IBG) slipped A1 cent lower to A25.5 cents.

Iron ore companies were generally firmer, but most moves were modest. Pick of the sector was Atlas (AGO), which shot up by A67 cents to A$3.89. Its takeover target, Giralia (GIR), added A91 cents to A5.66. After those two it was less exciting. Aquila (AQA) added A17 cents to A$9.44. Fortescue (FMG) rose A6 cents to A$6.57. Iron Ore Holdings (IOH) was A2 cents stronger at A$2.07. Gindalbie (GBG) shed A2 cents to A$1.34, as worries grow about a big cost blow-out at its Karara mine. Territory (TTY) was off by half a cent at A32.5 cents.

Coal companies were relatively flat after several very solid months. Most moves were small, either way. Xanadu Mines (XAN) was one that caught the eye of traders as it makes progress with its Mongolian assets. Xanadu was up by A8 cents to A70 cents on the week. Bathurst (BTU) added A5 cents to A$1.06. Aston (AZT) gained A20 cents to A$8.70. On the downside, Coal of Africa (CZA) lost A8 cents to A$1.59, and Continental Coal (CCC) eased by the smallest possible amount, A0.1 of a cent to A8.1 cents.

Minews. Uranium and the minor metals to finish please.

Oz. Uranium companies were stronger across the board as the spot price rose another US$3.00 a pound to US$73 per pound. The minor metals continued to attract speculators to a smorgasbord of potash, phosphate, lithium and rare earths. Among the best movers in uranium were Paladin (PDN), up A38 cents to A$5.21, Extract (EXT), up A47 cents to A$9.40, Uranex (UNX), up A13.5 cents to A77.5 cents, and Bannerman (BMN), up A6.5 cents to A82 cents. And some uranium companies we rarely hear about also delivered good moves, including White Canyon (WCU), which rose A2.5 cents to A20 cents, and Aura (AEE), which rose A6.5 cents to A45 cents.

Minor metals produced a number of eye-catching moves and stock exchange filings. Altura Mining (AJM) joined the lithium bandwagon and rose A5 cents to A22 cents on news of promising drill results from a project in Western Australia. Tin companies performed well. Venture (VMS) added A4 cents to A55 cents, and Kasbah (KAS) rose A5 cents to A37 cents. Peak Resources (PEK) was both a newcomer and star performer among the rare earths, rising A23 cents to A76 cents after reporting excellent drill intersections.

And we’ll sign off with a gem. Fortis Mining (FMJ) more than doubled with a rise of A38 cents to A69 cents, on news that it has entered into a strategic relationship with a Hong Kong company, Grand Concord Investments. There was no specific news about exploration, just the new friendship pact and a promise that Grand Concord’s principal owner, Madam Cheung (no first name), had “a substantial network of clients and mining-related relationships throughout Asia and Eastern Europe”. Minesite’s Man in Oz can hardly wait to see what Madam Cheung has to offer.

Minews. Indeed. Thanks Oz.
 
February 07, 2011

A Fairy Tale Market? Copper Hits $10,000 A Tonne
By Rob Davies
www.minesite.com/aus.html [Free Registration]

A combination of strong underlying demand and some dollar weakness was enough, finally, to push copper over the US$10,000 a tonne level last week. At that height some found the experience made them a little giddy and after some profit taking the red metal finally ended the week a touch lower at US$9,950 a tonne. But the excitement wasn’t confined to one metal only, as tin made further progress and closed at US$30,650 a tonne.

Seasoned observers of the base metals scene are resigned to the fact that they are living through a bubble. That it will end badly is not in doubt. The only question is when and how bad will it be. It is perhaps of limited comfort to know that great minds in the past have been sucked into bubbles and paid the price.

John Maudlin in his letter http://www.investorsinsight.com/ last week included an article by Jeremy Grantham with a graph showing the trading Sir Isaac Newton did in shares of the South Sea Company. In February 1720 the great philosopher bought some stock and sold out in the middle of the year for a healthy profit having tripled his money. Then, seeing his friends continuing to stay invested and make money hand over fist, he bought back in at about five times his original entry price. He sold in three tranches at the end of year having lost everything.

Long time analysts of base metals, like Neil Buxton of GFMS, note that prices of most metals in this group are so far above the marginal cost of production that conventional analysis tells you little about the likely timing of any reversal. The issue is that these metals are trading at the full cost of production, not the marginal cash cost.

To help put this in perspective Glen Jones of Intierra Resource Intelligence put together an excellent presentation last September to explain just how concentrated and limited new resource development is. It is sobering to see that 68 per cent of new copper projects are in just two countries - Australia and Canada. But that tells you more about the importance of politics than geology.

The database used by Intierra records 7,185 copper projects around the world. It is not surprising that the largest single category, at 39 per cent, is grass roots exploration. The next category comprises those projects at the drilling stage, and this accounts for 32 per cent of the total. The dynamic behind these numbers is fairly straightforward: as the intensity of work, and funds required, increases, the number of projects starts to fall quite sharply.

Which is why projects at the advanced exploration stage only makes up 14% per cent of the total number of copper projects in the world, while those in the pre-feasibility and feasibility stage make up four per cent each.

The most sobering fact is that a tiny one per cent of the tally consists of mines under construction. That compares with the eight per cent, or, in raw numbers, 571, that are actually operating mines. On the evidence of this data it looks pretty obvious that this is an industry that is not sowing what it is reaping. And on that reckoning, it’s no wonder prices are running at the full cost of exploration, development and production. There is simply no fat left in the system.

It will change of course - it always does. But trying to predict exactly when a behemoth like the Chinese economy collapses under its weight of bad debts and misguided capital allocation is impossible. Perhaps the only saving grace is that unlike the Irish property bubble, many of the participants in this particular space at least understand they are operating in a fairy-tale market.
::::::::::::::::::::::::::::::::::
 
"ISM Commodities Survey on the Rise"
Monday, February 7, 2011

In each month's Manufacturing Report on Business, ISM publishes the results of its monthly commodities survey where it asks respondents which commodities are rising in price and which are declining. In this month's survey, the net number of commodities rising in price rose to 30, which is the highest level since May 2008. Given the recent increase in this series (blue line), investors may want to brace for an uptick in inflation. As shown in the chart below, the last time the commodities survey reached this level, it was accompanied by a rise to over 5% in the CPI (y/y basis), or more than three times the current level of 1.5%.

[To see the chart with results of the survey, please click the link below]
http://www.bespokeinvest.com/thinkbig/2011/2/7/ism-commodities-survey-on-the-rise.html
*****************************************************************
 
Feb 10, 2011

Global Food Prices: Five Reasons to Buy Rice Futures
by Jack Barnes

The world is finally waking up to the fact that global grain prices are destined to head higher -- much higher.

Nasty weather in key agricultural markets around the world has savaged the global grain crop, meaning worldwide supplies can't help but be squeezed. Australia, for instance, is experiencing additional flooding in areas that were already battered by the torrential rains of November, December and January.

And as if the supply-related increase in agricultural commodities wasn't enough, there's also the U.S. dollar -- and the so-called "race to the bottom" -- to contend with. Make no mistake: The endless devaluations in the greenback are having a worldwide impact on agricultural commodity prices. Since commodities are priced in dollars, these devaluations translate into higher prices for grains and other food-related commodities.

Short supplies and rising prices are bad enough, but concerns about these first two realities are creating an additional catalyst that completes a trifecta for higher agricultural commodity prices.

And that third catalyst is panic buying -- especially with rice, which is a basic table staple in Asian markets. For instance, The Saudi Gazette last week reported that Bangladesh recently tripled its rice-import target and Indonesia just purchased 820,000 tons of Thai rice, nearly five times the volume initially sought.

"This is only the start of the panic buying," Ker Chung Yang, a commodities analyst at Singapore-based Phillip Futures, said in the report. "I expect we'll have more countries coming in and buying grain."

For global investors, there are five reasons why it's definitely time to buy rice futures.

Five Keys to Higher Rice Prices

Global food prices set an all-time record in January, reaching their highest level since the United Nations' Food and Agriculture Organization began to track them in 1990. They even topped the previous highs set during the global food prices scare of June 2008.

"The new figures clearly show that the upward pressure on world food prices is not abating. These high prices are likely to persist in the months to come," said Abdolreza Abbassian, an economist for FAO, which is based in Rome.

Food-price inflation has become a major issue in the world's emerging economies -- particularly those in Asia. Those inflationary pressures are now threatening to ignite a rally in rice prices, even though bumper crops in Thailand and Vietnam should mean there will be ample supplies. Instead, the following five reasons almost assure us of increased rice prices by the end of this year:

* The aforementioned huge early Asian crop is allowing U.S. farmers to shift to planting higher-margin grains.
* Panic buying by consuming nations trying to fight food inflation will escalate the price of existing supplies.
* The weather effects of La Nina are continuing to affect historical rain patterns.
* We expect an actual imbalance between world supply and demand by the end of this year.
* The United States is exporting inflation to the rest of the world, and will continue to do so for the rest of 2011.

Thailand's benchmark 100% "B" Grade white rice was offered at $540 per ton last week. That price is unchanged so far in 2011, after having fallen 13% last year. During the 2008 food crisis, rice prices exceeded $1,000 a ton -- a spike in food prices so severe that the head of the United Nation's World Food Program said it was causing a "silent tsunami" of hunger to sweep the globe.

While the Westernized nations continue to feel the effects of deflation and de-leveraging, emerging-market economies are having almost the exact opposite experience. And rice prices may be the ideal way to illustrate this economic disparity.

You see, rice is a staple food for half the world's population, particularly in Asia. And though there's a huge-and-growing middle class in Asia, there are still millions of households that exist at or near the poverty line. A big run-up in rice prices would squeeze their budgets and topple them into poverty, causing a wave of unrest that the governments of those countries would do almost anything to avoid.

Under normal circumstances, the inflationary effects we're seeing would not be as damaging to world food prices. But we are in a major global weather pattern shift that has changed the rain patterns around the world. La Nina is causing heavy rains to locations that normally experience little to no rain. This has caused flooding in such global breadbasket economies as Australia and Brazil. It has affected the monsoons of India and weather conditions on the U.S. East Coast.

Rice analysts have labeled price inflation as a "near-term" event, stating that an expected surge in rice supplies provided by a strong harvest would halt -- and ultimately reverse -- the current run-up in prices. But the supply increases won't be as large as these analysts expect.

The U.S. Wild Card

The price increases in grains have led the United States to shift its historical growing averages. In terms of the global pecking order among rice exporters, the United States typically ranks as the No. 3 or No. 4 largest exporter.

But not this year. In 2011, U.S. farmers are shifting to other crops, hoping to capitalize by boosting their output of soybeans over rice. In fact, Bloomberg has reported that U.S. farmers will plant the fewest acres of rice since 1989. And with good reason: Other grains have better profit margins than rice, especially since Asia's largest rice growers have a "bumper crop" coming to market this year.

"Why would you want to take that risk to plant rice, knowing that your income is going to be way down?" Terry Hatley, an Arkansas farmer who this year may not plant rice for the first time in three decades, told a Bloomberg reporter. "Farming is a business, and you've got to look at the economics of it. Now, the economics on rice are very dim."

Because the U.S. crop lags its Asian counterparts, such changes in planting plans by U.S. farmers will affect worldwide rice supplies in six to nine months.

The "Egypt Effect"

The uprising in Egypt has been directly linked to the cost of wheat, as Russia was the supplier of wheat to the Middle East region. This historical relationship was put into doubt when Russia cancelled its exports of grains last summer.

Egypt has started to go into the spot market to purchase more expensive wheat to feed its growing population. The uprising is going to play havoc with additional supplies arriving and being distributed to the hungry population. And Egypt is not the only nation that has had to make large bulk purchases of food to try to meet domestic demand.

Take Indonesia, which is the first of many nations to come to market in an attempt to make larger-than-normal purchases of a particular commodity. In large part because of runaway food prices, Indonesia is facing an inflation rate of better than 7%, in a year in which the inflation rate had been expected to decline.

Cheap rice has risen 22% in the past year. Cooking oil jumped 15% and various types of "chillies" zoomed between 90% and 314%, the newspaper The Australian reported.

Now the largest economy in Southeast Asia is importing rice in bulk for the first time since 2007. And Jakarta recently made an emergency decision to temporarily halt import duties on foreign supplies of rice, soybeans and wheat to ease food prices and take the sting out of inflation.

In fact, as a longtime observer of the global markets, I've found it interesting to observe the differing strategies that governments around the world have resorted to as they respond to the events in Tunisia and Egypt.

After the global food prices scare of 2008, authorities around the world were aware of the risks and better prepared to cope with rising food costs this time around, says Indonesia central bank spokesman Difi A. Johansyah. "We expect food prices can be controlled so they won't raise inflation expectations," he said.

Indonesia's President Susilo Bambang Yudhoyono said that possible steps to avoid a food crisis included waiving value-added taxes or import taxes for rice and cooking oil, maintaining sufficient stockpiles and preventing smuggling or hoarding.

Countries that operate under an autocratic government are announcing changes in their governments in an attempt to address the anger of a population that has no real say in deciding who will lead them. Shuffling the deck chairs on the Titanic has not fixed the problems before, and it won't make a difference today.

The people are experiencing the pain that accompanies big increases in staple food prices. In such situations, it's the price of the calories that drives the anger. And a fear of that anger will continue to induce governments to make the kind of hasty decisions that actually exacerbate the problem.

As investors in capitalist markets who will also feel some of that pocketbook pain, we have the ability to improve our lot by making investments that can offset the price increases. And we should make those moves now.

Actions to Take

It's time to look at rice futures. The breakout in rice prices, which follows several years of relatively narrow trading, is going to unfold over the course of this year. However, with a true "bumper" crop expected to reach market this spring, I would expect to see some serious attempts from all around the world to "talk down" the price of rice, and to temper inflationary expectations right about at harvest time.

Expect governments to also talk down the risks of food inflation.

FOR MORE CLICK AND READ ON
http://seekingalpha.com/article/252...five-reasons-to-buy-rice-futures?source=yahoo
 
February 19, 2011

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

Minews. Good morning Australia. It looks like it was a solid week on the ASX, with gold leading the way.

Oz. That’s a reasonable summary, though the 4.2 per cent rise in the gold index that we enjoyed this week was driven largely by one company, Newcrest (NCM). Because it is easily Australia’s biggest gold miner, Newcrest dominates the index. Last week’s five per cent rise to A$39.02 put the rest of the gold sector in the shade, and re-kindled speculation of a bid for Newcrest by one of the global gold majors. That talk has been aided by the sudden resignation earlier this month of Newcrest’s chief executive, Ian Smith, a departure which was not accompanied by a satisfactory explanation.

Minews. Meaning there might be a boardroom struggle underway?

Oz. It’s possible, and that makes Newcrest a company to watch closely over the next few weeks. As for the rest of the Australian market, it fell well short of gold. The all ordinaries rose a modest 1.1 per cent, and the broad metals and mining index rose a slightly less modest 1.4 per cent.

Minews. Index rises which indicate minimal share price movements.

Oz. That’s true if you look primarily at the market leaders and usual suspects. A different and more interesting picture emerges when you look behind the well-known names and follow the trail of the hot money on the ASX, something we’ve been doing in recent weeks to highlight some fresh names for our London readers. This week we’ll start with a company exploring for a mineral we don’t often hear about, graphite. Shares in Archer Exploration (AXE) doubled on Friday, putting in an upward run of A16 cents to A32 cents, before easing to close at A21 cents, for an overall a gain of A8.5 cents for the week. Interest in the project was sparked by an encouraging report on the company’s Sugarloaf project on the Eyre Peninsula of South Australia, which was a source of graphite in the 19th century. And interest in the material has been raised as supplies diminish. Graphite has uses as a lubricant and in lithium-ion batteries.

Minews. Interesting. Let’s hear about a few more of the lesser-known companies before the call of the card.

Oz. The next significant mover worth mentioning is named after a company which set the mining world alight almost 40 years ago, Poseidon (POS). Back in 1969 and 1970, the original Poseidon triggered a nickel boom with its discovery at Mt Windara in Western Australia. The new Poseidon is re-working the same mine, though perhaps more scientifically. Last week’s 43 per cent rise in Poseidon’s share price to A34.5 cents was driven after the company awarded a contract to refurbish the original underground mine at Mt Windara.

Frontier Resources (FNT) was also generating plenty of interest, as its gold search in Papua New Guinea continues. Last week it added another A7.5 cents to A37.5 cents. And another explorer, Papillon Resources (PIR), a new Aussie player in the West African gold hunt, was the beneficiary of interest after a presentation at the Mining Indaba conference in Cape Town. It added A16.5 cents to A94.5 cents. Elsewhere, Cerro Resources (CJO), the old Kings Minerals, attracted interest in its Mexican silver exploration, adding A4 cents to A26 cents, while another silver stock, Cobar Consolidated (CCU) continued its upward run with a rise of A13 cents to A88 cents.

Minews. Thanks for that brief survey of the bigger moves. Let’s move through the sectors now, continuing with gold.

Oz. After Newcrest, the performance in the gold space was mixed, although the general trend was up. Ausgold (AUC) added A11 cents to A$1.65 after our report on its ambitious South Boddington exploration project. OceanaGold (OGC) recovered recently lost ground, with a rise of A31 cents to A$2.86, but did trade as high as A$3.03 on Friday. Ramelius (RMS) added A13 cents to A$1.20, and Tanami (TAM) continued its remarkable revival with a rise of A12 cents to A$1.05. Other gold companies that gained ground included Medusa (MML), up A29 cents to A$7.32, and Beadell (BDR), up A7 cents to A83.5 cents. Troy (TRY) was also better off, up A27 cents to A$3.82, as investors look past its commissioning setbacks at the new Casposo mine in Argentina. Offsetting the gains was a long list of companies that fell, including Gold Road (GOR), down A4 cents to A31.5 cents, Silver Lake (SLR), down A3 cents to A$1.89, Kingsrose (KRM), down A12 cents to A$1.33, Gryphon (GRY), down A3 cents to A$1.89, and Ampella (AMX), down A6 cents to A$2.69.

Minews. Base metals next, as copper’ still hot and there seems to be growing optimism in the nickel and zinc market.

Oz. There were a couple of copper stars, Hot Chili (HCH) and Sumatra Copper & Gold (SUM). Hot Chili, which we took a look at mid-week, added a sharp A13.5 cents to A63.5 cents, but did hit an all-time high of A70 cents on Thursday. Meanwhile, Sumatra is benefiting from its recent development decision on the Tembang gold project, and rose by A8.5 cents last week to A28 cents. The rest of the copper sector was more mixed. Companies on the rise included Discovery (DML), up A2 cents to A$1.37, Bougainville (BOC), up A7 cents to A$1.64, and Sabre (SBR), up A1.5 cents to A20 cents. Companies that fell included Equinox (ERN), down A7 cents to A$6.43, Sandfire (SFR), down A18 cents to A$7.26, and Rex (RXM), also down A18 cents to A$2.87.

Nickel companies performed reasonably well, with Poseidon in the lead. Other movers included Minara (MRE), up A3.5 cents to A90 cents, Mirabela (MBN), up A7 cents to A$2.35, Western Areas (WSA), up A64 cents to a 12 month high of A$6.90, and Panoramic (PAN), up A5 cents to A$2.47. Mincor (MCR) was also a riser, up A1.5 cents to A$1.74, but that was mainly due to a copper discovery at its Tottenham project in New South Wales.

Zinc companies also trended up, continuing a quiet recovery which has been evident for some weeks. Perilya (PEM) added A4 cents to A67 cents. Bass (BSM) rose an eye-catching A6.5 cents to A47 cents, and Prairie Downs (PDZ) put on A3.5 cents to A24.5 cents.

Minews. Iron ore and coal next, please.

Oz. There were signs of weariness in both iron ore and coal last week. Most moves were modest either way, although the overall trend in iron ore was up a little. The trend in coal was down a little. Among the leaders in iron ore, Fortescue (FMG) rose A16 cents to A$6.88 after a strong profit, maiden dividend, and a fresh legal setback for its dominant shareholder, Andrew Forrest. Brockman (BRM) added A15 cents to A$5.10, and Atlas (AGO) put on A21 cents to A$3.97. After that the moves were mainly down. Cape Lambert (CFE) lost A3.5 cents to A64.5 cents amid reports of irregular share dealing. BC Iron (BCI) fell A11 cents to A$3.11, and Iron Ore Holdings (IOH) lost A12 cents to A$1.80. Coal companies on the slide included Coal of Africa (CZA), down A4 cents to A$1.46, Macarthur (MCC), down A9 cents lower to A$12.36, and Bathurst (BTU), down A5 cents to A$1.06.

Minews. Uranium and minor metals to close.

Oz. It was mostly down among the uranium stocks. Manhattan (MHC) led the way with a fall of A15 cents to A$1.16. Paladin (PDN) lost A24 cents to A$5.08 after reporting a surprise annual loss. Berkeley (BKY) fell A7 cents to A$1.59, and Uranex (UNX) dropped by A6.5 cents to A55.5 cents.

The minor metals were all over the shop. Rare earths did best. Lynas (LYC) rose A3 cents to A$1.93. Alkane (ALK) rose A13 cents to A$1.28. However, Arafura (ARU) slipped A2 cents to A$1.26. Tin companies were weaker, as were lithium companies. South Boulder (STB) was the best of the potash plays, adding A42 cents to close at A$4.60 after it hit an all-time high of A$4.82 in early Friday trade. Atlantic (ATI) added A3 cents to A$1.93 after announcing a big fundraising for its planned redevelopment of the ill-fated Windimurra vanadium project.

Minews. Thanks Oz.
******
 

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