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Not the price, "the price rise".
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"The best place to be is in commodities"
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Not the price, "the price rise".
April 11, 2011
""Can It Be Long Before The LME Starts Quoting Metals Prices In Renminbi ?""
By Rob Davies
www.minesite.com/aus.html [The registration is free]
Well over a decade ago a fund manager launched an Africa fund. It was at least ten years too early but one of his sales angles is now being proven correct. He based a large part of his investment thesis on the demand for resources that was likely to come from Asia, and Africa, with its wealth of commodities was a natural target for investment and supply. He summed the thesis up as “the giant sucking sound from Asia”.
As it’s turned out, the demand is less from Asia in general, and more from China in particular. China’s ambitions in the mining sector have been made very clear most recently by the unsolicited bid for Equinox Minerals by Minmetals, a state controlled miner based in Hong Kong. China wants to secure control over copper reserves in Central Africa, and cut out the middle man. But the Chinese are not the only ones playing that game.
Mick Davis at Xstrata has perhaps the best record of strategic deal-making in the mining industry over the last two decades. And a rise in the Anglo American share price last week was attributed to speculation that Xstrata was training his guns on this venerable old lady of mining.
Despite the massive capital spending programme the mining industry is undertaking to meet demand, it’s clear that the Chinese-driven commodity boom is far from over. Indeed, the game now is to secure as big a piece of the pie as possible.
It’s not all smiles and roses, though. There are concerns that the Chinese economy may eventually succumb to the increasing cost of money, as the authorities gradually raise interest rates. The rise that came through last week was the fourth since October, but there is little sign that such increases are having any effect as far as reducing demand for metals is concerned. More worrying, perhaps, is that China is the only game in town.
The increasing strains in the US economy were graphically illustrated by the last minute settlement between the Republicans and Democrats to allow the country’s 2011 budget to go through. But no one is pretending that this latest fudge does anything to solve the real problems of massive deleveraging this once great economy will have to face over the next few decades. And Japan has a similar issue with its debt burden that will constrain its appetite for raw materials, other than coal, for some time.
Elsewhere, Germany is the one bright spot in Europe, as its metal bashing economy continues to grow strongly. The problem is that the 25 basis point increase in interest rates that the ECB announced last week will only exacerbate the strains in the euro. Although it is clear the single currency must split, the process of it doing so will be painful for everybody whenever it happens.
This combination of higher rates in Europe and financial stress in the US acted to depress the dollar by 1.5 per cent, and helped boost base metals by 2.3 per cent as measured by the LME index. Over the week, the corporate action around copper raised the profile of the red metal and pushed it up more than the others taking it 3.2 per cent higher, to US$9,696 a tonne. Lead was an even stronger performer, putting in a 5.8 per cent gain to YS$2,877 a tonne, and not far from US$3,000, something few would have predicted a handful of years ago. Tin continues in its unaccustomed role as price leader for the sector, and last week rose by three per cent to US$32,600. Even zinc, labouring under its 700,000 tonne inventory, rose 5.3 per cent to US$2,440 a tonne. Aluminium brought up the rear with a 2.4 per cent jump to US$2,659 a tonne.
Separating the underlying fundamentals for the individual metals is getting increasingly difficult, as the gyrations of international currencies make analysis of the asset class ever more complex. That said, the underlying trend is clear. Can it be long before the LME starts quoting metal prices in renminbi?
::::::::::::::::::::::::::::::::::::
""Can It Be Long Before The LME Starts Quoting Metals Prices In Renminbi ?""
By Rob Davies
www.minesite.com/aus.html [The registration is free]
Well over a decade ago a fund manager launched an Africa fund. It was at least ten years too early but one of his sales angles is now being proven correct. He based a large part of his investment thesis on the demand for resources that was likely to come from Asia, and Africa, with its wealth of commodities was a natural target for investment and supply. He summed the thesis up as “the giant sucking sound from Asia”.
As it’s turned out, the demand is less from Asia in general, and more from China in particular. China’s ambitions in the mining sector have been made very clear most recently by the unsolicited bid for Equinox Minerals by Minmetals, a state controlled miner based in Hong Kong. China wants to secure control over copper reserves in Central Africa, and cut out the middle man. But the Chinese are not the only ones playing that game.
Mick Davis at Xstrata has perhaps the best record of strategic deal-making in the mining industry over the last two decades. And a rise in the Anglo American share price last week was attributed to speculation that Xstrata was training his guns on this venerable old lady of mining.
Despite the massive capital spending programme the mining industry is undertaking to meet demand, it’s clear that the Chinese-driven commodity boom is far from over. Indeed, the game now is to secure as big a piece of the pie as possible.
It’s not all smiles and roses, though. There are concerns that the Chinese economy may eventually succumb to the increasing cost of money, as the authorities gradually raise interest rates. The rise that came through last week was the fourth since October, but there is little sign that such increases are having any effect as far as reducing demand for metals is concerned. More worrying, perhaps, is that China is the only game in town.
The increasing strains in the US economy were graphically illustrated by the last minute settlement between the Republicans and Democrats to allow the country’s 2011 budget to go through. But no one is pretending that this latest fudge does anything to solve the real problems of massive deleveraging this once great economy will have to face over the next few decades. And Japan has a similar issue with its debt burden that will constrain its appetite for raw materials, other than coal, for some time.
Elsewhere, Germany is the one bright spot in Europe, as its metal bashing economy continues to grow strongly. The problem is that the 25 basis point increase in interest rates that the ECB announced last week will only exacerbate the strains in the euro. Although it is clear the single currency must split, the process of it doing so will be painful for everybody whenever it happens.
This combination of higher rates in Europe and financial stress in the US acted to depress the dollar by 1.5 per cent, and helped boost base metals by 2.3 per cent as measured by the LME index. Over the week, the corporate action around copper raised the profile of the red metal and pushed it up more than the others taking it 3.2 per cent higher, to US$9,696 a tonne. Lead was an even stronger performer, putting in a 5.8 per cent gain to YS$2,877 a tonne, and not far from US$3,000, something few would have predicted a handful of years ago. Tin continues in its unaccustomed role as price leader for the sector, and last week rose by three per cent to US$32,600. Even zinc, labouring under its 700,000 tonne inventory, rose 5.3 per cent to US$2,440 a tonne. Aluminium brought up the rear with a 2.4 per cent jump to US$2,659 a tonne.
Separating the underlying fundamentals for the individual metals is getting increasingly difficult, as the gyrations of international currencies make analysis of the asset class ever more complex. That said, the underlying trend is clear. Can it be long before the LME starts quoting metal prices in renminbi?
::::::::::::::::::::::::::::::::::::
""CRB Index Hits Another New High; Still Down Over 20% From Peak""
April 11, 2011
Although it seems as though a day doesn't go by where at least one commodity is spiking to all-time highs, it may be surprising to some that the CRB [Commodity Research Bureau] Commodity Index is still down 22.3% from its all-time high in 2008. After falling more than 57.7% from its peak, the CRB Index has rallied by 83.6%, which is actually a bit less than the S&P 500 which has rallied 96% and is currently down 15.2% from its all-time high.
To view the graphic, please click the link below:
http://www.bespokeinvest.com/thinkb...er-new-high-still-down-over-20-from-peak.html
April 11, 2011
Although it seems as though a day doesn't go by where at least one commodity is spiking to all-time highs, it may be surprising to some that the CRB [Commodity Research Bureau] Commodity Index is still down 22.3% from its all-time high in 2008. After falling more than 57.7% from its peak, the CRB Index has rallied by 83.6%, which is actually a bit less than the S&P 500 which has rallied 96% and is currently down 15.2% from its all-time high.
To view the graphic, please click the link below:
http://www.bespokeinvest.com/thinkb...er-new-high-still-down-over-20-from-peak.html
""The Gas Revolution""
Amazingly, an era of energy abundance is upon us, unless politicians and environmentalists get their way.
Apr 18, 2011, Vol. 16, No. 30 • By STEVEN F. HAYWARD
The Weekly Standard (USA & UK)
To read the article, please click the link below:
http://www.weeklystandard.com/articles/gas-revolution_557014.html?nopager=1
Amazingly, an era of energy abundance is upon us, unless politicians and environmentalists get their way.
Apr 18, 2011, Vol. 16, No. 30 • By STEVEN F. HAYWARD
The Weekly Standard (USA & UK)
To read the article, please click the link below:
http://www.weeklystandard.com/articles/gas-revolution_557014.html?nopager=1
"Glencore International AG is about to take over the world -- literally"
S. N. Kapadia - 14 April 2011
Please click below, to read the article:
http://www.businessinsider.com/10-things-you-need-to-know-about-glencores-ipo-2011-4
S. N. Kapadia - 14 April 2011
Please click below, to read the article:
http://www.businessinsider.com/10-things-you-need-to-know-about-glencores-ipo-2011-4
Nassim Taleb, hedge fund manager, is also keen on commodities.
To read his interview, please click the link below:
http://knowledge.wharton.upenn.edu/printer_friendly.cfm?articleid=2755
***
To read his interview, please click the link below:
http://knowledge.wharton.upenn.edu/printer_friendly.cfm?articleid=2755
***
"The Granddaddy of All Bubbles ?"
World markets are frothing like shaken Champagne, and doomsayers argue that today's bubbles need to be deflated now before they get dangerously large.
By Peter Coy and Roben Farzad - Business Week - April 14, 2011
"... Not everyone is in the grip of bubble-phobia, least of all Fed Chairman Ben Bernanke. The [US]central bank remains committed to keeping rates ultralow until the economy shows more staying power. In an Apr. 11 speech in New York, Fed Vice-Chair Janet L. Yellen didn't say anything about bubbles. But she rejected the contention that Fed policy is responsible for commodity price inflation, blaming the runup in oil and food prices largely on "rising global demand and disruptions in global supply." She's right: Commodities aren't being hoarded, as they would be if investors were speculating on them. Inventories have fallen since last summer..."
Source > http://www.businessweek.com/magazine/content/11_17/b4225058281366.htm
******
World markets are frothing like shaken Champagne, and doomsayers argue that today's bubbles need to be deflated now before they get dangerously large.
By Peter Coy and Roben Farzad - Business Week - April 14, 2011
"... Not everyone is in the grip of bubble-phobia, least of all Fed Chairman Ben Bernanke. The [US]central bank remains committed to keeping rates ultralow until the economy shows more staying power. In an Apr. 11 speech in New York, Fed Vice-Chair Janet L. Yellen didn't say anything about bubbles. But she rejected the contention that Fed policy is responsible for commodity price inflation, blaming the runup in oil and food prices largely on "rising global demand and disruptions in global supply." She's right: Commodities aren't being hoarded, as they would be if investors were speculating on them. Inventories have fallen since last summer..."
Source > http://www.businessweek.com/magazine/content/11_17/b4225058281366.htm
******
April 17, 2011
That Was The Week That Was ... In Australia
By Our Man in Oz
www.minesite.com/aus.html [ The registration is free ]
Minews. Good morning Australia. It looks like you had a tough week.
Oz. We did, but it was hardly unexpected, what with concern growing that China is about to slam the brakes on its over-heating economy by means of a sharp increase in interest rates. The major indices all fell by around two per cent. Having said that, though, it’s also worth noting that there were plenty of positive movers among smaller gold companies, some of which might not have attracted close attention in London.
Minews. That sounds interesting.
Oz. It is, because a call of the usual suspects produces a few interesting movers, but nothing spectacular. To find the companies that caught the eye of Australian speculators you need to dig a little deeper. And then you discover quite an assortment of gold, iron ore and rare earth companies that performed exceptionally well in a down week.
Minews. Let’s start with the new names and good news before switching to a roll call of the fallen.
Oz. Three new, or relatively new, iron ore explorers did well last week, all reaching fresh 12-month share price highs. Amex Resources (AXZ), which was mentioned last week as the company which won a West Australian iron ore tenement in a raffle, continued its upward run, adding another A14 cents to close the week at A71 cents, although it did hit a high of A73 cents during Friday trade. Indo Mines (IDO), which is exploring for iron sands in Indonesia, added A8 cents to A45 cents. And South American Iron (SAY), which is looking for the same sort of material in Chile and Ecuador, reached a fresh high of A14 cents during the week, finally closing out at A13.5 cents for a rise of A3 cents.
The notable gold risers included some relatively new players. They were led by Bailey Minerals (BAA), which is perhaps more of a platinum story thanks to a deal recently completed in Colombia, but which also has gold assets in Australia. It rose to a fresh high of A$1.15, before closing at A$1.10 for a gain on the week of A21 cents. Worth recalling that the company was trading at a mere A40 cents as recently as February. Shares in Azimuth (AZH), which is exploring for gold in Guyana, rose A2.5 cents to a closing price of A34 cents, although that was well short of its new peak of A37 cents reached in early Friday trade. YTC Resources (YTC), which is exploring the Hera gold project discovered by CBH Resources some years ago, traded up to a new high of A79 cents, before closing at A75.5 cents for a gain on the week of A6.5 cents. Meanwhile, Gold Road (GOR), one of our long-term favourites rocketed up on Friday to a fresh peak of A81.5 cents before tumbling back to close at A68.5 cents, a closing price which still left it with a gain of A17.5 cents for the week.
Outside of precious metals, Northern Minerals (NTU), the old Northern Uranium, was the pick of the rare earth companies after a well received presentation at an investment conference in Sydney. It added A21.5 cents to end the week at A$1.00, but did get as high as A$1.07 on Friday. Alkane (ALK) one of our long-term favourites also continued its rapid rise, hitting a fresh all-time high of A$2.73, before ending the week at A$2.63 for a week’s rise of A38 cents. In mid-March Alkane was trading around A$1.20, and a year ago it was A23 cents.
Minews. Is that the end of the good news?
Oz. Close, though it is worth mentioning the continued recovery among uranium companies. Among the interesting news this week, Callabona Uranium (CUU) reported visible secondary uranium mineralisation at its Oak River project in Queensland. Despite a uranium mining ban in Queensland, the shares traded up to a fresh high of A14 cents, double what it was a week earlier, before closing at A13.5 cents for a gain of A5 cents. Two other uranium exploration newcomers were Legacy Minerals (LML) and FYI Resources (FYI) which both attracted attention. Legacy rose 3.5 cents to A19 cents and FYI rose 3.4 cents to A11 cents, but both in very, very, light turnover. To spell out just how light, FYI added A1.8 cents on Friday thanks to a trade of 3,465 shares valued at A$362 which is probably less than the Friday night bar tab of the buyer.
Minews. Thanks. A timely warning on the importance of volume for investors working in the ultra-small end of the market. Time now to call the card, starting with gold, please.
Oz. Gold was mixed, trending down, although there were also a few solid risers. Among the best performers was Ausgold (AUC), which continues to impress with its Katanning project, and added another A17 cents to close at A$1.62. Northern Star (NST) also continues to attract attention in the wake of impressive production and discovery news from its Paulsens mine. The shares added A4.5 cents to A41 cents, and might perhaps be worth a closer look soon. A third strong company last week was the soon-to-be silver producer, Alcyone (AYN) which rose by A2.5 cents to A13 cents, but did reach a fresh 12 month high of A14.5 cents at one stage during the week. There was a more modest rise from Cortona (CRC), which awarded a contract for the mining of its Dargues Reef project in New South Wales. Cortona’s shares rise A1 cent to A18.5 cents. Shareholders in Alacer Gold (AQG), which incorporates the old Avoca, were also better off, as the shares rose by an impressive A$1.20 to A$10.43.
After the good news comes the bad. Kingsgate (KCN) led the way down, with a heavy fall of A$1.44 to A$7.50 after it issued a production downgrade. Catalpa (CAH) reported something similar and was hit with a sell-off which knocked A16 cents off the shares to A$1.62. Other fallers included Perseus (PRU), down A14 cents to A$3.15, Allied Gold (ALD), down A6 cents to A63 cents, Beadell (BDR), down A3 cents to A87.5 cents, Troy (TRY), down A15 cents to A$3.79, and Medusa (MML) down A28 cents to A$7.72. Integra (IGR) was also weaker, down A5.5 cents to A49.5 cents, but is set to release what is expected to be a rather impressive quarterly early next week with costs said to be attractively low.
Minews. Thanks to that Integra heads-up, we’ll keep an eye out. Moving on, let’s take a look at some of our regulars in the uranium sector.
Oz. The regulars in uranium were less impressive than the stars we mentioned earlier. Paladin (PDN) continues to struggle with profitability, and dropped another A10 cents last week to A$3.64. Extract (EXT) slipped A8 cents lower to A$8.47. Berkeley (BKY) fell A4.5 cents to A98.5 cents. Manhattan (MHC) was A10 cents weaker at A70 cents, and Bannerman (BMN) lost half a cent to A41.5 cents.
Minews. Iron ore and base metals next.
Oz. It was mainly down among the iron ore companies, although there were one or two risers. BC Iron (BCI) has forced Regent Pacific to reinstate finance for its proposed takeover bid, and that news was enough to lift BC by A12 cents to A$2.96. Mindax (MDX) upgraded the resource at its Mt Forrest project, and its shares rose to A39 cents, up A3 cents as a result. Crusader (CAS) was also better off, up by A6 cents to A$1.27 as Crusader’s Rob Smakman toured London on an itinerary that included a well received presentation at our very own Minesite forum. After that, though, it was downhill. Fortescue (FMG) fell A16 cents to A$6.48. Brockman (BRM) fell A49 cents to A$5.55. Iron Ore Holdings (IOH) fell A6 cents to A$1.76. And Murchison fell A8 cents to A$1.09.
There was an easing off in the base metal space too. Syndicated (SMD) and Sumatra were the two copper companies that gained ground, but only just. Syndicated added half a cent to close at A20 cents, and Sumatra added A1 cent to A31 cents. Falls came from OZ Minerals (OZL), down A12 cents to A$1.52, Sandfire (SFR), down A33 cents to A$6.97, Hot Chili (HCH), down A6 cents to A73.5 cents, and Rex (RXM), down A26 cents to A$2.70.
Poseidon (POS) was the single nickel company that rose, posting a gain of A1 cent to A28 cents. Falls were recorded by Western Areas (WSA), down A8 cents to A$7.08, Mincor (MCR), down A17 cents to A$1.31, Panoramic (PAN), down A23 cents to A$2.10 and Mirabela (MBN), down A5 cents to A$2.05.
It was more of the same in zinc - one rise and the rest down. Terramin (TZN) was the sole company to gain, adding half-a-cent to A37 cents. Then came the fallers: Kagara (KZL), down A1 cent to A62.5 cents, Blackthorn (BTR), down A7 cents to A65 cents, Perilya (PEM), down A1 cent to A64 cents, and Meridian (MII), down half a cent to A12.5 cents.
Minews. Coal and minor metals to finish, please.
Oz. There was one strong coal performer, and it was a newcomer as well. Metro Coal (MTE), an emerging thermal coal producer, added A10 cents to A41 cents. Then comes a long list of declines, including: Carabella (CLR), down A27 cents to A$2.29, Coalspur (CPL), down A14 cents to A$1.93, Hunnu (HUN), down A11 cents to A$1.66 and Coal of Africa (CZA), down A13 cents to 1.21.
Rare earths were mixed despite the strong performances from Alkane and Northern. Lynas (LYC) lost A2 cents to A$2.53 and Arafura (ARU) was off by A3 cents to A$1.32. Titanium and zircon companies were mixed, although there was one stand out performer, and that was a newcomer too. Diatreme (DRX), one of the merging Eucla Basin zircon companies, added A2.7 cents to A11 cents. Tin companies eased, as did manganese and lithium explorers.
Minews. Thanks Oz.
******
That Was The Week That Was ... In Australia
By Our Man in Oz
www.minesite.com/aus.html [ The registration is free ]
Minews. Good morning Australia. It looks like you had a tough week.
Oz. We did, but it was hardly unexpected, what with concern growing that China is about to slam the brakes on its over-heating economy by means of a sharp increase in interest rates. The major indices all fell by around two per cent. Having said that, though, it’s also worth noting that there were plenty of positive movers among smaller gold companies, some of which might not have attracted close attention in London.
Minews. That sounds interesting.
Oz. It is, because a call of the usual suspects produces a few interesting movers, but nothing spectacular. To find the companies that caught the eye of Australian speculators you need to dig a little deeper. And then you discover quite an assortment of gold, iron ore and rare earth companies that performed exceptionally well in a down week.
Minews. Let’s start with the new names and good news before switching to a roll call of the fallen.
Oz. Three new, or relatively new, iron ore explorers did well last week, all reaching fresh 12-month share price highs. Amex Resources (AXZ), which was mentioned last week as the company which won a West Australian iron ore tenement in a raffle, continued its upward run, adding another A14 cents to close the week at A71 cents, although it did hit a high of A73 cents during Friday trade. Indo Mines (IDO), which is exploring for iron sands in Indonesia, added A8 cents to A45 cents. And South American Iron (SAY), which is looking for the same sort of material in Chile and Ecuador, reached a fresh high of A14 cents during the week, finally closing out at A13.5 cents for a rise of A3 cents.
The notable gold risers included some relatively new players. They were led by Bailey Minerals (BAA), which is perhaps more of a platinum story thanks to a deal recently completed in Colombia, but which also has gold assets in Australia. It rose to a fresh high of A$1.15, before closing at A$1.10 for a gain on the week of A21 cents. Worth recalling that the company was trading at a mere A40 cents as recently as February. Shares in Azimuth (AZH), which is exploring for gold in Guyana, rose A2.5 cents to a closing price of A34 cents, although that was well short of its new peak of A37 cents reached in early Friday trade. YTC Resources (YTC), which is exploring the Hera gold project discovered by CBH Resources some years ago, traded up to a new high of A79 cents, before closing at A75.5 cents for a gain on the week of A6.5 cents. Meanwhile, Gold Road (GOR), one of our long-term favourites rocketed up on Friday to a fresh peak of A81.5 cents before tumbling back to close at A68.5 cents, a closing price which still left it with a gain of A17.5 cents for the week.
Outside of precious metals, Northern Minerals (NTU), the old Northern Uranium, was the pick of the rare earth companies after a well received presentation at an investment conference in Sydney. It added A21.5 cents to end the week at A$1.00, but did get as high as A$1.07 on Friday. Alkane (ALK) one of our long-term favourites also continued its rapid rise, hitting a fresh all-time high of A$2.73, before ending the week at A$2.63 for a week’s rise of A38 cents. In mid-March Alkane was trading around A$1.20, and a year ago it was A23 cents.
Minews. Is that the end of the good news?
Oz. Close, though it is worth mentioning the continued recovery among uranium companies. Among the interesting news this week, Callabona Uranium (CUU) reported visible secondary uranium mineralisation at its Oak River project in Queensland. Despite a uranium mining ban in Queensland, the shares traded up to a fresh high of A14 cents, double what it was a week earlier, before closing at A13.5 cents for a gain of A5 cents. Two other uranium exploration newcomers were Legacy Minerals (LML) and FYI Resources (FYI) which both attracted attention. Legacy rose 3.5 cents to A19 cents and FYI rose 3.4 cents to A11 cents, but both in very, very, light turnover. To spell out just how light, FYI added A1.8 cents on Friday thanks to a trade of 3,465 shares valued at A$362 which is probably less than the Friday night bar tab of the buyer.
Minews. Thanks. A timely warning on the importance of volume for investors working in the ultra-small end of the market. Time now to call the card, starting with gold, please.
Oz. Gold was mixed, trending down, although there were also a few solid risers. Among the best performers was Ausgold (AUC), which continues to impress with its Katanning project, and added another A17 cents to close at A$1.62. Northern Star (NST) also continues to attract attention in the wake of impressive production and discovery news from its Paulsens mine. The shares added A4.5 cents to A41 cents, and might perhaps be worth a closer look soon. A third strong company last week was the soon-to-be silver producer, Alcyone (AYN) which rose by A2.5 cents to A13 cents, but did reach a fresh 12 month high of A14.5 cents at one stage during the week. There was a more modest rise from Cortona (CRC), which awarded a contract for the mining of its Dargues Reef project in New South Wales. Cortona’s shares rise A1 cent to A18.5 cents. Shareholders in Alacer Gold (AQG), which incorporates the old Avoca, were also better off, as the shares rose by an impressive A$1.20 to A$10.43.
After the good news comes the bad. Kingsgate (KCN) led the way down, with a heavy fall of A$1.44 to A$7.50 after it issued a production downgrade. Catalpa (CAH) reported something similar and was hit with a sell-off which knocked A16 cents off the shares to A$1.62. Other fallers included Perseus (PRU), down A14 cents to A$3.15, Allied Gold (ALD), down A6 cents to A63 cents, Beadell (BDR), down A3 cents to A87.5 cents, Troy (TRY), down A15 cents to A$3.79, and Medusa (MML) down A28 cents to A$7.72. Integra (IGR) was also weaker, down A5.5 cents to A49.5 cents, but is set to release what is expected to be a rather impressive quarterly early next week with costs said to be attractively low.
Minews. Thanks to that Integra heads-up, we’ll keep an eye out. Moving on, let’s take a look at some of our regulars in the uranium sector.
Oz. The regulars in uranium were less impressive than the stars we mentioned earlier. Paladin (PDN) continues to struggle with profitability, and dropped another A10 cents last week to A$3.64. Extract (EXT) slipped A8 cents lower to A$8.47. Berkeley (BKY) fell A4.5 cents to A98.5 cents. Manhattan (MHC) was A10 cents weaker at A70 cents, and Bannerman (BMN) lost half a cent to A41.5 cents.
Minews. Iron ore and base metals next.
Oz. It was mainly down among the iron ore companies, although there were one or two risers. BC Iron (BCI) has forced Regent Pacific to reinstate finance for its proposed takeover bid, and that news was enough to lift BC by A12 cents to A$2.96. Mindax (MDX) upgraded the resource at its Mt Forrest project, and its shares rose to A39 cents, up A3 cents as a result. Crusader (CAS) was also better off, up by A6 cents to A$1.27 as Crusader’s Rob Smakman toured London on an itinerary that included a well received presentation at our very own Minesite forum. After that, though, it was downhill. Fortescue (FMG) fell A16 cents to A$6.48. Brockman (BRM) fell A49 cents to A$5.55. Iron Ore Holdings (IOH) fell A6 cents to A$1.76. And Murchison fell A8 cents to A$1.09.
There was an easing off in the base metal space too. Syndicated (SMD) and Sumatra were the two copper companies that gained ground, but only just. Syndicated added half a cent to close at A20 cents, and Sumatra added A1 cent to A31 cents. Falls came from OZ Minerals (OZL), down A12 cents to A$1.52, Sandfire (SFR), down A33 cents to A$6.97, Hot Chili (HCH), down A6 cents to A73.5 cents, and Rex (RXM), down A26 cents to A$2.70.
Poseidon (POS) was the single nickel company that rose, posting a gain of A1 cent to A28 cents. Falls were recorded by Western Areas (WSA), down A8 cents to A$7.08, Mincor (MCR), down A17 cents to A$1.31, Panoramic (PAN), down A23 cents to A$2.10 and Mirabela (MBN), down A5 cents to A$2.05.
It was more of the same in zinc - one rise and the rest down. Terramin (TZN) was the sole company to gain, adding half-a-cent to A37 cents. Then came the fallers: Kagara (KZL), down A1 cent to A62.5 cents, Blackthorn (BTR), down A7 cents to A65 cents, Perilya (PEM), down A1 cent to A64 cents, and Meridian (MII), down half a cent to A12.5 cents.
Minews. Coal and minor metals to finish, please.
Oz. There was one strong coal performer, and it was a newcomer as well. Metro Coal (MTE), an emerging thermal coal producer, added A10 cents to A41 cents. Then comes a long list of declines, including: Carabella (CLR), down A27 cents to A$2.29, Coalspur (CPL), down A14 cents to A$1.93, Hunnu (HUN), down A11 cents to A$1.66 and Coal of Africa (CZA), down A13 cents to 1.21.
Rare earths were mixed despite the strong performances from Alkane and Northern. Lynas (LYC) lost A2 cents to A$2.53 and Arafura (ARU) was off by A3 cents to A$1.32. Titanium and zircon companies were mixed, although there was one stand out performer, and that was a newcomer too. Diatreme (DRX), one of the merging Eucla Basin zircon companies, added A2.7 cents to A11 cents. Tin companies eased, as did manganese and lithium explorers.
Minews. Thanks Oz.
******
April 18, 2011
"Goldman Sachs Rains On Glencore’s Parade"
Rob Davies
www.minesite.com/aus.html [Free Registration]
The impending stock market flotation of the world’s largest commodity broker is a significant event for investors. After all, if the biggest and best broker in the game doesn’t know when to sell then who does? That said, companies choose to go public for all sorts of reasons and not just because they think external markets are placing a higher value on their business than they do internally.
And there are a couple of other factors which make this route, and the strategy, interesting. It is well known that Glencore has been contemplating reversing into Xstrata, its 34 per cent-owned publicly listed subsidiary. It seems the reason it didn’t go down that route was a difference of opinion over valuation. On the face of it Glencore would rather pay US $250 million in fees to get its own listing rather than accept a low ball bid from Mick Davis, chief executive of Xstrata.
Those listing fees will be spread around just about every investment bank and broker in the business, except for one. Few would disagree that Goldman Sachs is the alpha firm in broking. So it is surprising that Goldman is not part of the underwriting syndicate. Even more telling perhaps, is that it chose last week to issue a note advising its clients that the top of the commodity market has been reached. While that will undoubtedly be contrary to what the brokers to the Glencore listing will be saying to potential investors, maybe the underlying positions of Glencore and Goldman Sachs are perhaps not that far apart.
In the markets themselves dollar weakness was again a feature, as it dropped to a 16 month low against the basket of six other currencies by which it is usually measured. This weakness benefited gold more than base metals. The industrial metals collectively fell by 2.4 per cent, and that fall took the LME index down to 4,270.
But gold was also in the news because of the release of the definitive annual survey by GFMS. Among the many gems in this latest presentation was data showing that gold held by ETFs now amounts to virtually the equivalent of a whole year’s worth of production. For an industry that only started in 2003 that is remarkable. According to the Financial Times the SPDR Gold ETF was worth a total of US$58 billion at the end of 2010. The FT also reported that there is US$202 billion worth of silver in silver ETFs as it reached US$42 an ounce.
Maybe it is just coincidence, but the ongoing tragedy that is the Greek economy resulted in an outflow of US$40 billion from Greek banks in 2010. The outflow is still continuing, at the rate of US$4 billion a month. Even yields of nearly 14 per cent can’t persuade investors to lend to a government that is still, nominally, part of the euro zone. And Ireland was also struggling again, as its debt was downgraded to the very bottom of the investment grade table. Despite the feeble protestation of politicians it is clear that the euro zone is breaking up before our very eyes, as investors vote with their wallets and shift money from IOU’s that only have tenuous backing to assets that have a physical underpinning.
In a financial world that increasingly seems to be based on the shifting sand of large scale capital flows perhaps the biggest question raised by the Glencore listing is why London is the chosen location. Maybe any currency that is not the dollar or the euro looks relatively attractive these days. But perhaps what we really need is a currency that is fully backed by a gold, or a silver, ETF. A physically backed precious metal ETF bearer bond - how about that for a true international measure of value?
******************
"Goldman Sachs Rains On Glencore’s Parade"
Rob Davies
www.minesite.com/aus.html [Free Registration]
The impending stock market flotation of the world’s largest commodity broker is a significant event for investors. After all, if the biggest and best broker in the game doesn’t know when to sell then who does? That said, companies choose to go public for all sorts of reasons and not just because they think external markets are placing a higher value on their business than they do internally.
And there are a couple of other factors which make this route, and the strategy, interesting. It is well known that Glencore has been contemplating reversing into Xstrata, its 34 per cent-owned publicly listed subsidiary. It seems the reason it didn’t go down that route was a difference of opinion over valuation. On the face of it Glencore would rather pay US $250 million in fees to get its own listing rather than accept a low ball bid from Mick Davis, chief executive of Xstrata.
Those listing fees will be spread around just about every investment bank and broker in the business, except for one. Few would disagree that Goldman Sachs is the alpha firm in broking. So it is surprising that Goldman is not part of the underwriting syndicate. Even more telling perhaps, is that it chose last week to issue a note advising its clients that the top of the commodity market has been reached. While that will undoubtedly be contrary to what the brokers to the Glencore listing will be saying to potential investors, maybe the underlying positions of Glencore and Goldman Sachs are perhaps not that far apart.
In the markets themselves dollar weakness was again a feature, as it dropped to a 16 month low against the basket of six other currencies by which it is usually measured. This weakness benefited gold more than base metals. The industrial metals collectively fell by 2.4 per cent, and that fall took the LME index down to 4,270.
But gold was also in the news because of the release of the definitive annual survey by GFMS. Among the many gems in this latest presentation was data showing that gold held by ETFs now amounts to virtually the equivalent of a whole year’s worth of production. For an industry that only started in 2003 that is remarkable. According to the Financial Times the SPDR Gold ETF was worth a total of US$58 billion at the end of 2010. The FT also reported that there is US$202 billion worth of silver in silver ETFs as it reached US$42 an ounce.
Maybe it is just coincidence, but the ongoing tragedy that is the Greek economy resulted in an outflow of US$40 billion from Greek banks in 2010. The outflow is still continuing, at the rate of US$4 billion a month. Even yields of nearly 14 per cent can’t persuade investors to lend to a government that is still, nominally, part of the euro zone. And Ireland was also struggling again, as its debt was downgraded to the very bottom of the investment grade table. Despite the feeble protestation of politicians it is clear that the euro zone is breaking up before our very eyes, as investors vote with their wallets and shift money from IOU’s that only have tenuous backing to assets that have a physical underpinning.
In a financial world that increasingly seems to be based on the shifting sand of large scale capital flows perhaps the biggest question raised by the Glencore listing is why London is the chosen location. Maybe any currency that is not the dollar or the euro looks relatively attractive these days. But perhaps what we really need is a currency that is fully backed by a gold, or a silver, ETF. A physically backed precious metal ETF bearer bond - how about that for a true international measure of value?
******************
April 2011
"The World’s Top Ten Gold Mines"
Bill Haynes
www.minesite.com/aus.html (The registration is free)
Gold has long been one of mankind’s most prized possessions. Yet most people have little idea where gold comes from, other than from “gold mines.” Mining gold today often involves monumental undertakings, truly some of man’s greatest engineering feats. Imagine gold mining shafts nearly two and a half miles below the surface and it taking two hours for miners to get to their work stations. Imagine a pit so large that it can be seen from outer space. No reason to imagine, those are the realities in the mining of gold revealed in “The World’s 10 Most Prolific Gold Fields.”
1. Witwatersrand Basin (Johannesburg, South Africa). Located in South Africa, the Witwatersrand Basin represents the richest gold field ever discovered. It is estimated that 40% of all of the gold ever mined has come out of the Basin. In 1970, South Africa’s output accounted for 79% of the world’s gold production. By 2009, South Africa’s share of world gold production had dropped to less than 8%. Mining in the Witwatersrand Basin is accomplished by creating deep underground tunnels that are necessary to reach the plentiful reserves. The Tau Tona Mine features the deepest tunnel in the world extending a full 2.4 miles below the earth’s surface. A massive ventilation and air conditioning system is required to overcome the extreme working conditions throughout more than 500 miles of tunnels. At its deepest levels, the air temperature reaches 131 degrees farenheit and the rock face itself 140 farenheit. The mine is so extensive that it takes workers a full two hours to travel from the surface to the deepest sections of the mine where they must then contend with pockets of lethal gas, water and a continual barrage of small earthquakes. The discovery of gold in the Basin in 1886 by Australian miner George Walker set off one of the largest gold rushes in history. The surrounding area became the city of Johannesburg, and within ten years Johannesburg was the largest city in South Africa.
2. Carlin Trend (Nevada, US). For over a hundred years, prospectors in the Western US completely missed one of the richest gold fields in the world, as it contained what is now popularly called ‘invisible gold.’ Historically, most gold fields were discovered by the presence of gold veins or deposits visible to the naked eye. Not so in the Carlin Trend located in northeast Nevada. Hot springs containing dissolved gold deposited the metal into the sediment in such fine particles that it is difficult to see even with a microscope and impossible to find using older conventional methods such as hand tools and panning. In 1961, John Livermore, a geologist for Newmont Mining, set out in search of this invisible gold based on some ideas in a paper published a year before by noted geologist Ralph Roberts. It didn’t take long before Livermore found what he was looking for in an area that is now known as the Carlin Trend. The deposit was the first major one of its kind discovered. Subsequent discoveries of similar type areas in China and Macedonia are referred to as Carlin Trend type deposits. Mining by Newmont began in 1965; the area has since become one of the richest gold fields in the world. Open pit mining dominates the Carlin Trend over its five by 40 mile area although some underground operations have been formed in higher grade areas. Gold production in the state of Nevada, which is dominated by the Carlin Trend, accounts for almost 80% of the gold mined in the United States. If Nevada were a country, it would rank #4 in the world in terms of total gold production.
3. Irian Jaya (Indonesia). In one of the most inaccessible spots on the planet lie the single largest gold orebody and third largest copper orebody ever discovered. Located in the mountains of Irian Jaya, Indonesia, at an elevation of 14,010 ft, is the Grasberg Mine. Two miles away lies its predecessor, the Ertsberg Mine. The amazing feat of their construction by Freeport McMoRan is the subject of an episode of Discovery Channel’s Super Structures. Work on the original Ertsberg Mine began in 1967 with the construction of a dock and a 25 mile road through the surrounding jungle. Chainsaw-wielding workers were lowered from helicopters to cut their way clear to the jungle floor. Bulldozers were flown in where they often had to contend with 20 feet of soft marshland before reaching solid ground. The final section of mountain road was built atop a ridge so narrow that the first clearing pass had to be done with bulldozers no bigger than riding lawn mowers. Six subsequent iterations of air lifting increasingly larger bulldozers were used to complete the road. A tram system had to be built to surmount the final 2,000 foot cliff that separates the road from the mine site. Getting the mined ore off of the mountain is a much more efficient process: it is simply dropped 2,000 feet to the giant crushers below. The processed ore is mixed with water to create a gold and copper slurry which travels through 70 miles of pipe out to the shore. From there, the slurry is concentrated and the ore then transported to smelters around the world. The original Ertsberg Mine operated from 1972 until it was depleted in the mid 1980s. In 1988, Freeport McMoRan discovered the enormous neighboring ore body that is today operating as the Grasberg Mine. Gold production was 2.5 million ounces in 2009. Open pit operations will continue through 2015 at which point the gold will be mined by underground methods.
4. The Super Pit (Kalgoorlie, Western Australia). The Super Pit, located in Kalgoorlie, Western Australia, is the largest open pit mine in the country. It covers an area of almost three square miles and is large enough to be seen from space. The excavation began after several underground mines were acquired by Kalgoorlie Consolidated Gold Mines. Even today, operations occasionally unearth old mining tunnels complete with abandoned mining equipment. The Super Pit covers an area known as the Golden Mile, a name that dates back to the original gold rush of the late 19th century. During this time, the field was considered to be the richest square mile in the world. The area has been continually mined for over 100 years, and the Super Pit is expected to remain in production through at least 2017. Once retired, the mine will be allowed to fill in with ground water, a process that could take 50 years. The city of Kalgoorlie was formed in 1893 right after Irishman Paddy Hannan filed a Reward Claim leading to an influx of hopeful prospectors. The subsequent gold rush saw the surrounding area boom over the next 10 years, temporarily reaching a population of almost 200,000. It was during this time that Kalgoorlie’s famous Hay Street brothels began. Much like the mine, they have also been in continuous operation for over a century and are now an accepted part of the community. Today, Kalgoorlie has a population of less than 30,000 with about one fourth of its jobs directly related to mining.
5. Yanacocha (Peru). Located high in the Andes Mountains, with parts reaching elevations in excess of 13,000 feet, is the sprawling complex known as Yanacocha. Covering some 60 square miles, it is the largest gold mine in Latin America, possibly the second largest in the world, and is recognized as one of the most profitable in the world. Yanacocha is the largest facility operated by Newmont Mining and is the company’s crown jewel. With almost US$2 billion dollars invested in the mine, Newmont has received a return of over US$7 billion to date. In 1994, a legal battle for Yanacocha erupted between Newmont Mining and its French partner BRGM, after BRGM attempted to sell its stake to a Newmont rival. A controversial decision by the Peruvian high court allowed Newmont and its Peruvian partner Buenaventura to buy out BRGM’s stake. The aftermath was ugly with both sides accusing one another of engaging in improper conduct in attempting to influence the decision. Since its origins in 1993, Yanacocha has produced more than 26 million ounces of gold.
[Note: The post had to be shortened to five mines because of ASF size requirements]
This article first appeared on Bill's Blog on The CMI Gold & Silver website.
******************************************
"The World’s Top Ten Gold Mines"
Bill Haynes
www.minesite.com/aus.html (The registration is free)
Gold has long been one of mankind’s most prized possessions. Yet most people have little idea where gold comes from, other than from “gold mines.” Mining gold today often involves monumental undertakings, truly some of man’s greatest engineering feats. Imagine gold mining shafts nearly two and a half miles below the surface and it taking two hours for miners to get to their work stations. Imagine a pit so large that it can be seen from outer space. No reason to imagine, those are the realities in the mining of gold revealed in “The World’s 10 Most Prolific Gold Fields.”
1. Witwatersrand Basin (Johannesburg, South Africa). Located in South Africa, the Witwatersrand Basin represents the richest gold field ever discovered. It is estimated that 40% of all of the gold ever mined has come out of the Basin. In 1970, South Africa’s output accounted for 79% of the world’s gold production. By 2009, South Africa’s share of world gold production had dropped to less than 8%. Mining in the Witwatersrand Basin is accomplished by creating deep underground tunnels that are necessary to reach the plentiful reserves. The Tau Tona Mine features the deepest tunnel in the world extending a full 2.4 miles below the earth’s surface. A massive ventilation and air conditioning system is required to overcome the extreme working conditions throughout more than 500 miles of tunnels. At its deepest levels, the air temperature reaches 131 degrees farenheit and the rock face itself 140 farenheit. The mine is so extensive that it takes workers a full two hours to travel from the surface to the deepest sections of the mine where they must then contend with pockets of lethal gas, water and a continual barrage of small earthquakes. The discovery of gold in the Basin in 1886 by Australian miner George Walker set off one of the largest gold rushes in history. The surrounding area became the city of Johannesburg, and within ten years Johannesburg was the largest city in South Africa.
2. Carlin Trend (Nevada, US). For over a hundred years, prospectors in the Western US completely missed one of the richest gold fields in the world, as it contained what is now popularly called ‘invisible gold.’ Historically, most gold fields were discovered by the presence of gold veins or deposits visible to the naked eye. Not so in the Carlin Trend located in northeast Nevada. Hot springs containing dissolved gold deposited the metal into the sediment in such fine particles that it is difficult to see even with a microscope and impossible to find using older conventional methods such as hand tools and panning. In 1961, John Livermore, a geologist for Newmont Mining, set out in search of this invisible gold based on some ideas in a paper published a year before by noted geologist Ralph Roberts. It didn’t take long before Livermore found what he was looking for in an area that is now known as the Carlin Trend. The deposit was the first major one of its kind discovered. Subsequent discoveries of similar type areas in China and Macedonia are referred to as Carlin Trend type deposits. Mining by Newmont began in 1965; the area has since become one of the richest gold fields in the world. Open pit mining dominates the Carlin Trend over its five by 40 mile area although some underground operations have been formed in higher grade areas. Gold production in the state of Nevada, which is dominated by the Carlin Trend, accounts for almost 80% of the gold mined in the United States. If Nevada were a country, it would rank #4 in the world in terms of total gold production.
3. Irian Jaya (Indonesia). In one of the most inaccessible spots on the planet lie the single largest gold orebody and third largest copper orebody ever discovered. Located in the mountains of Irian Jaya, Indonesia, at an elevation of 14,010 ft, is the Grasberg Mine. Two miles away lies its predecessor, the Ertsberg Mine. The amazing feat of their construction by Freeport McMoRan is the subject of an episode of Discovery Channel’s Super Structures. Work on the original Ertsberg Mine began in 1967 with the construction of a dock and a 25 mile road through the surrounding jungle. Chainsaw-wielding workers were lowered from helicopters to cut their way clear to the jungle floor. Bulldozers were flown in where they often had to contend with 20 feet of soft marshland before reaching solid ground. The final section of mountain road was built atop a ridge so narrow that the first clearing pass had to be done with bulldozers no bigger than riding lawn mowers. Six subsequent iterations of air lifting increasingly larger bulldozers were used to complete the road. A tram system had to be built to surmount the final 2,000 foot cliff that separates the road from the mine site. Getting the mined ore off of the mountain is a much more efficient process: it is simply dropped 2,000 feet to the giant crushers below. The processed ore is mixed with water to create a gold and copper slurry which travels through 70 miles of pipe out to the shore. From there, the slurry is concentrated and the ore then transported to smelters around the world. The original Ertsberg Mine operated from 1972 until it was depleted in the mid 1980s. In 1988, Freeport McMoRan discovered the enormous neighboring ore body that is today operating as the Grasberg Mine. Gold production was 2.5 million ounces in 2009. Open pit operations will continue through 2015 at which point the gold will be mined by underground methods.
4. The Super Pit (Kalgoorlie, Western Australia). The Super Pit, located in Kalgoorlie, Western Australia, is the largest open pit mine in the country. It covers an area of almost three square miles and is large enough to be seen from space. The excavation began after several underground mines were acquired by Kalgoorlie Consolidated Gold Mines. Even today, operations occasionally unearth old mining tunnels complete with abandoned mining equipment. The Super Pit covers an area known as the Golden Mile, a name that dates back to the original gold rush of the late 19th century. During this time, the field was considered to be the richest square mile in the world. The area has been continually mined for over 100 years, and the Super Pit is expected to remain in production through at least 2017. Once retired, the mine will be allowed to fill in with ground water, a process that could take 50 years. The city of Kalgoorlie was formed in 1893 right after Irishman Paddy Hannan filed a Reward Claim leading to an influx of hopeful prospectors. The subsequent gold rush saw the surrounding area boom over the next 10 years, temporarily reaching a population of almost 200,000. It was during this time that Kalgoorlie’s famous Hay Street brothels began. Much like the mine, they have also been in continuous operation for over a century and are now an accepted part of the community. Today, Kalgoorlie has a population of less than 30,000 with about one fourth of its jobs directly related to mining.
5. Yanacocha (Peru). Located high in the Andes Mountains, with parts reaching elevations in excess of 13,000 feet, is the sprawling complex known as Yanacocha. Covering some 60 square miles, it is the largest gold mine in Latin America, possibly the second largest in the world, and is recognized as one of the most profitable in the world. Yanacocha is the largest facility operated by Newmont Mining and is the company’s crown jewel. With almost US$2 billion dollars invested in the mine, Newmont has received a return of over US$7 billion to date. In 1994, a legal battle for Yanacocha erupted between Newmont Mining and its French partner BRGM, after BRGM attempted to sell its stake to a Newmont rival. A controversial decision by the Peruvian high court allowed Newmont and its Peruvian partner Buenaventura to buy out BRGM’s stake. The aftermath was ugly with both sides accusing one another of engaging in improper conduct in attempting to influence the decision. Since its origins in 1993, Yanacocha has produced more than 26 million ounces of gold.
[Note: The post had to be shortened to five mines because of ASF size requirements]
This article first appeared on Bill's Blog on The CMI Gold & Silver website.
******************************************
""The truly remarkable run of silver""
21 April 2011
To view all charts and tables, please click the link below:
http://www.bespokeinvest.com/thinkbig/2011/4/21/the-truly-remarkable-run-of-silver.html
"""""""
21 April 2011
To view all charts and tables, please click the link below:
http://www.bespokeinvest.com/thinkbig/2011/4/21/the-truly-remarkable-run-of-silver.html
"""""""
April 23, 2011
That Was The Week That Was … In Australia.
By Charles Wyatt
www.minesite.com/aus.html [[[ Free registration ]]]
Minews. Good morning Australia, and Happy Easter.
Oz. Thanks, and Happy Easter to all living in WillsKate land, or whatever the U.K. is called these days. I understand much of London and its surrounds is have a 10-day sleep-in but since the ASX had a modestly positive trading week before the Easter break it seemed worthwhile bringing Minesite readers up to speed on what’s happening down this way, especially our reaction to the astonishing gold and silver prices
Minews. That might be interesting because your dollar was probably a problem again.
Oz. Well spotted. The Australian currency is playing an increasingly important role as it continues a seemingly relentless upward march. Last week saw a gain of another US2 cents with the Aussie sitting at $US1.07 just before the Easter shutdown. That means we’re up (or the U.S. is down) by 16 per cent over the past 12-months, and a whopping 51 per cent over the past 24 months.
Minews. Which also means a considerably currency drag on export earnings.
Oz. It is becoming quite painful for farmers, miners, manufacturers and the service sector. But, since we’re into mining let’s look at what happened to share prices last week as the currency effect bit into higher U.S. dollar commodity prices. Gold and silver stocks, as you might expect, did best, but not excessively. Other miners did less well. The indices tell the overall story with the gold index up 2 per cent, the all ordinaries up 1 per cent and the metals a mining industry absolutely flat.
Minews. Let’s have a quick call of the card, starting with gold and silver, please.
Oz. Before prices a very stark example of what the currency change did to last week’s record upward surge in the gold price – it turned it into a fall on conversion to Australian dollars. When we spoke a week ago the U.S. dollar gold price was US$1476/oz, and exchange rate US$1.05 to produce an Australian gold price of A$1405/oz. This week the late Thursday gold price was US$1501/oz and the exchange rate US$1.07 to produce an Australian gold price of A$1402/oz, switching a US$25/oz rise into a A$3/oz fall. Enough of the big picture stuff. Let’s move swiftly through prices.
Medusa Mining (MML) was the pick of the gold stocks with a rise of A61 cents to A$8.33. Cobar Consolidated (CCU) was the pick of the silver stocks, adding A17 cents to A$1.13. Other good gold rises came from: Kingsgate (KCN), up A31 cents to A$7.81. Troy (TRY), up A4 cents to A$3.83. Olympus (OYM) up A2 cents to A41 cents. Gold One (GDO), up A6.5 cents to A50 cents, and Dampier Gold (DAU), a newcomer but one with its foot on the old Plutonic mines in Western Australia, up A1.5 cents to 58 cents. Losing ground: Catalpa (CAH), down A10 cents to A$1.52. Ausgold (AUC), down 3 cents to A$1.59 and Noble (NMG), down A5 cents to A67.5 cents.
Minews. Base metals and iron ore next.
Oz. Not a lot of action in the non-gold sectors. Best of the copper stocks were PanAust (PNA), up A5 cents to A80.5 cents. Sandfire (SFR), up A20 cents to A$7.17. Sumatra (SUM), up A5.5 cents to A36.5 cents, and Exco (EXS), up A5 cents to A67 cents, as it heads into an interesting time over an asset sale to Xstrata. Copper stocks to lose ground included: OZ Minerals (OZL), down A2 cents to A$1.50, and Bougainville (BOC), down A4 cents to A$1.57 despite optimistic comments in Papua New Guinea that a deal is close on reopening its mothballed Panguna mine.
Nickel and zinc stocks were mixed. Western Areas (WSA), the best of the pure nickels, up A13 cents to A$7.19. Mincor (MCR) led a handful to lose ground, down A3 cents to A$1.28. Kagara (KZL) was the best of the zinc miners, up a modest A1.5 cents to A64 cents. Meridian (MII), posted the heaviest decline, down A2 cents to A10.5 cents.
Most iron ore stocks marked time, or lost a few cents. Sherwin (SHD) slipped A1 cent lower to A20 cents, with Atlas (AGO) losing the same miniscule amount of A1 cent to A$3.64. Fortescue (FMG) added A1 cent to A$6.49, and Gindalbie (GBG) recovered A2 cents to A$1.06.
Minews. Coal, uranium and the minor metals and then you can have a hot cross bun.
Oz. A mixed bag in those areas with no discernible trend ahead of the Easter break, which for us combined this year with the annual April 25 Anzac Day holiday. Coal stock to rise included: Macarthur (MCC), up A25 cents to A$12.28. Continental Coal (CCC), up A0.6 of a cent to A6.1 cents, and Guildford Coal (GUF), up A3 cents to A$1.19. Going the other way were: Carabella (CLR), down A8 cents to A$2.21. Hunnu (HUN), down A6 cents to A$1.59, and Stanmore (SMR), down A11 cents to A$1.28.
Uranium stocks slipped, which was to be expected given the fresh slide in the short-term uranium price to US$57.25 a pound. Movements included: Berkeley (BKY), down A1.5 cents to A96 cents. Deep Yellow (DYL), down A2 cents to A22.5 cents, and Manhattan (MHC), down A1 cent to A69 cents. Takeover target Mantra (MRU), and leading producer, Paladin (PDN) went against the downward trend adding A16 cents and A2 cents to A$6.83 and A$3.66 respectively
Tin explorer, Kasbah (KAS) was the best performer among the minor metals, adding A3.5cents to A30 cents. MetalsX (MLX), which has offloaded a nickel project in central Australia, rose A2 cents to A31.5 cents. Rare earth stocks were down modestly. Alkane (ALK) lost A7 cents to A$2.54 and Lynas (LYC) shed A8 cents to A$2.45.
Minews. Thanks Oz.
******
That Was The Week That Was … In Australia.
By Charles Wyatt
www.minesite.com/aus.html [[[ Free registration ]]]
Minews. Good morning Australia, and Happy Easter.
Oz. Thanks, and Happy Easter to all living in WillsKate land, or whatever the U.K. is called these days. I understand much of London and its surrounds is have a 10-day sleep-in but since the ASX had a modestly positive trading week before the Easter break it seemed worthwhile bringing Minesite readers up to speed on what’s happening down this way, especially our reaction to the astonishing gold and silver prices
Minews. That might be interesting because your dollar was probably a problem again.
Oz. Well spotted. The Australian currency is playing an increasingly important role as it continues a seemingly relentless upward march. Last week saw a gain of another US2 cents with the Aussie sitting at $US1.07 just before the Easter shutdown. That means we’re up (or the U.S. is down) by 16 per cent over the past 12-months, and a whopping 51 per cent over the past 24 months.
Minews. Which also means a considerably currency drag on export earnings.
Oz. It is becoming quite painful for farmers, miners, manufacturers and the service sector. But, since we’re into mining let’s look at what happened to share prices last week as the currency effect bit into higher U.S. dollar commodity prices. Gold and silver stocks, as you might expect, did best, but not excessively. Other miners did less well. The indices tell the overall story with the gold index up 2 per cent, the all ordinaries up 1 per cent and the metals a mining industry absolutely flat.
Minews. Let’s have a quick call of the card, starting with gold and silver, please.
Oz. Before prices a very stark example of what the currency change did to last week’s record upward surge in the gold price – it turned it into a fall on conversion to Australian dollars. When we spoke a week ago the U.S. dollar gold price was US$1476/oz, and exchange rate US$1.05 to produce an Australian gold price of A$1405/oz. This week the late Thursday gold price was US$1501/oz and the exchange rate US$1.07 to produce an Australian gold price of A$1402/oz, switching a US$25/oz rise into a A$3/oz fall. Enough of the big picture stuff. Let’s move swiftly through prices.
Medusa Mining (MML) was the pick of the gold stocks with a rise of A61 cents to A$8.33. Cobar Consolidated (CCU) was the pick of the silver stocks, adding A17 cents to A$1.13. Other good gold rises came from: Kingsgate (KCN), up A31 cents to A$7.81. Troy (TRY), up A4 cents to A$3.83. Olympus (OYM) up A2 cents to A41 cents. Gold One (GDO), up A6.5 cents to A50 cents, and Dampier Gold (DAU), a newcomer but one with its foot on the old Plutonic mines in Western Australia, up A1.5 cents to 58 cents. Losing ground: Catalpa (CAH), down A10 cents to A$1.52. Ausgold (AUC), down 3 cents to A$1.59 and Noble (NMG), down A5 cents to A67.5 cents.
Minews. Base metals and iron ore next.
Oz. Not a lot of action in the non-gold sectors. Best of the copper stocks were PanAust (PNA), up A5 cents to A80.5 cents. Sandfire (SFR), up A20 cents to A$7.17. Sumatra (SUM), up A5.5 cents to A36.5 cents, and Exco (EXS), up A5 cents to A67 cents, as it heads into an interesting time over an asset sale to Xstrata. Copper stocks to lose ground included: OZ Minerals (OZL), down A2 cents to A$1.50, and Bougainville (BOC), down A4 cents to A$1.57 despite optimistic comments in Papua New Guinea that a deal is close on reopening its mothballed Panguna mine.
Nickel and zinc stocks were mixed. Western Areas (WSA), the best of the pure nickels, up A13 cents to A$7.19. Mincor (MCR) led a handful to lose ground, down A3 cents to A$1.28. Kagara (KZL) was the best of the zinc miners, up a modest A1.5 cents to A64 cents. Meridian (MII), posted the heaviest decline, down A2 cents to A10.5 cents.
Most iron ore stocks marked time, or lost a few cents. Sherwin (SHD) slipped A1 cent lower to A20 cents, with Atlas (AGO) losing the same miniscule amount of A1 cent to A$3.64. Fortescue (FMG) added A1 cent to A$6.49, and Gindalbie (GBG) recovered A2 cents to A$1.06.
Minews. Coal, uranium and the minor metals and then you can have a hot cross bun.
Oz. A mixed bag in those areas with no discernible trend ahead of the Easter break, which for us combined this year with the annual April 25 Anzac Day holiday. Coal stock to rise included: Macarthur (MCC), up A25 cents to A$12.28. Continental Coal (CCC), up A0.6 of a cent to A6.1 cents, and Guildford Coal (GUF), up A3 cents to A$1.19. Going the other way were: Carabella (CLR), down A8 cents to A$2.21. Hunnu (HUN), down A6 cents to A$1.59, and Stanmore (SMR), down A11 cents to A$1.28.
Uranium stocks slipped, which was to be expected given the fresh slide in the short-term uranium price to US$57.25 a pound. Movements included: Berkeley (BKY), down A1.5 cents to A96 cents. Deep Yellow (DYL), down A2 cents to A22.5 cents, and Manhattan (MHC), down A1 cent to A69 cents. Takeover target Mantra (MRU), and leading producer, Paladin (PDN) went against the downward trend adding A16 cents and A2 cents to A$6.83 and A$3.66 respectively
Tin explorer, Kasbah (KAS) was the best performer among the minor metals, adding A3.5cents to A30 cents. MetalsX (MLX), which has offloaded a nickel project in central Australia, rose A2 cents to A31.5 cents. Rare earth stocks were down modestly. Alkane (ALK) lost A7 cents to A$2.54 and Lynas (LYC) shed A8 cents to A$2.45.
Minews. Thanks Oz.
******
April 26, 2011
""Cold Turkey Postponed, Again""
By Rob Davies
www.minesite.com/aus.html (The registration is free)
The statement by S & P that it was putting the US debt on negative credit watch surprised everyone and no one. Most people know that the US economy is one of a number of countries that has yet to address its budget deficit seriously. It is, though, the biggest and that makes the problem so large and so significant that no politician really wants to be the kamikaze pilot that takes it on. S & P did not change its view to inform the market. It did it to fire a warning shot across the bows of President Obama.
Big though it is, the US deficit is it not his biggest problem, nor is Libya, Afghanistan, Iran or North Korea. The most important thing on his mind is getting re-elected which is why markets only had a temporary wobble and 10 year US Treasury yields ended the week essentially unchanged at 3.38%. The dollar was different though. It fell to its lowest level since August 2008 and that was enough, together with S&P news, to take gold over the $1,500 mark and push base metals, as measured by the LME index, up 2.9 % to 4,393.
It is hard to know if any action will be taken to curb government spending in the US, the chances of tax increases to curb the deficit are even lower, but, if there is, the impact on growth would be negative in the short term and that is bad for industrial production and metal demand. What makes this stand-off so important is that China, the other big destination for metals, has already taken action to slow the growth of its charging economy. Fortunately, or maybe unfortunately, the combination of interest rate rises and restrictions on bank lending have yet to have any discernible impact on demand in the Middle Kingdom.
Even though base metal prices, albeit measured in depreciating dollars, show little concern about the possibility that attempts to limit state spending will succeed there are some indications that give cause for concern. Inventories, having been remarkably stable for a long time, are now starting to edge up a little. Zinc, which has the weakest fundamentals of all the base metals, now has over 800,000 tonnes in LME warehouses. That is 100,000 tonnes more than at the start of the year. In dollar terms the price is essentially unchanged at $2,336 a tonne but in many producing countries the local price will be lower due to currency appreciation against the dollar.
Zinc might have the poorest demand and supply prospects but other metals are also seeing inventories creep up. Those for aluminium are 3% up for the year to date while copper, which has the best fundamentals, is up a staggering 21% to 456,275 tonnes. To be fair the abnormally low levels for copper do exaggerate the percentage changes. However, that argument has less force in the case of lead. It has experienced a 25% increase in inventories taking the tonnage up to 304,625 in a very much smaller market.
In the long term everyone knows that the US, and other governments, needs to reduce the difference between what they spend and what they raise through taxes. They also know that implementing that will be painful for the economy and the voters and delaying tough action is the easiest, if cowardly, way out. Unless and until markets force the hand of the politicians Cold Turkey will be delayed, however much it is needed.
**********
""Cold Turkey Postponed, Again""
By Rob Davies
www.minesite.com/aus.html (The registration is free)
The statement by S & P that it was putting the US debt on negative credit watch surprised everyone and no one. Most people know that the US economy is one of a number of countries that has yet to address its budget deficit seriously. It is, though, the biggest and that makes the problem so large and so significant that no politician really wants to be the kamikaze pilot that takes it on. S & P did not change its view to inform the market. It did it to fire a warning shot across the bows of President Obama.
Big though it is, the US deficit is it not his biggest problem, nor is Libya, Afghanistan, Iran or North Korea. The most important thing on his mind is getting re-elected which is why markets only had a temporary wobble and 10 year US Treasury yields ended the week essentially unchanged at 3.38%. The dollar was different though. It fell to its lowest level since August 2008 and that was enough, together with S&P news, to take gold over the $1,500 mark and push base metals, as measured by the LME index, up 2.9 % to 4,393.
It is hard to know if any action will be taken to curb government spending in the US, the chances of tax increases to curb the deficit are even lower, but, if there is, the impact on growth would be negative in the short term and that is bad for industrial production and metal demand. What makes this stand-off so important is that China, the other big destination for metals, has already taken action to slow the growth of its charging economy. Fortunately, or maybe unfortunately, the combination of interest rate rises and restrictions on bank lending have yet to have any discernible impact on demand in the Middle Kingdom.
Even though base metal prices, albeit measured in depreciating dollars, show little concern about the possibility that attempts to limit state spending will succeed there are some indications that give cause for concern. Inventories, having been remarkably stable for a long time, are now starting to edge up a little. Zinc, which has the weakest fundamentals of all the base metals, now has over 800,000 tonnes in LME warehouses. That is 100,000 tonnes more than at the start of the year. In dollar terms the price is essentially unchanged at $2,336 a tonne but in many producing countries the local price will be lower due to currency appreciation against the dollar.
Zinc might have the poorest demand and supply prospects but other metals are also seeing inventories creep up. Those for aluminium are 3% up for the year to date while copper, which has the best fundamentals, is up a staggering 21% to 456,275 tonnes. To be fair the abnormally low levels for copper do exaggerate the percentage changes. However, that argument has less force in the case of lead. It has experienced a 25% increase in inventories taking the tonnage up to 304,625 in a very much smaller market.
In the long term everyone knows that the US, and other governments, needs to reduce the difference between what they spend and what they raise through taxes. They also know that implementing that will be painful for the economy and the voters and delaying tough action is the easiest, if cowardly, way out. Unless and until markets force the hand of the politicians Cold Turkey will be delayed, however much it is needed.
**********
""The days of abundant resources and falling prices are over forever""
by Jeremy Grantham, GMO, Quartely Letter, April 2011
To read the article, please click the link below:
http://www.scribd.com/doc/53933845/GMO-Quarterly-Letter-1Q11
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by Jeremy Grantham, GMO, Quartely Letter, April 2011
To read the article, please click the link below:
http://www.scribd.com/doc/53933845/GMO-Quarterly-Letter-1Q11
************************
If you would like to view the article in its entirety, please visit the original source:
The World’s 10 Most Prolific Gold Fields
The World’s 10 Most Prolific Gold Fields
April 2011
"The World’s Top Ten Gold Mines"
Bill Haynes
www.minesite.com/aus.html (The registration is free)
Gold has long been one of mankind’s most prized possessions. Yet most people have little idea where gold comes from, other than from “gold mines.” Mining gold today often involves monumental undertakings, truly some of man’s greatest engineering feats. Imagine gold mining shafts nearly two and a half miles below the surface and it taking two hours for miners to get to their work stations. Imagine a pit so large that it can be seen from outer space. No reason to imagine, those are the realities in the mining of gold revealed in “The World’s 10 Most Prolific Gold Fields.”
1. Witwatersrand Basin (Johannesburg, South Africa). Located in South Africa, the Witwatersrand Basin represents the richest gold field ever discovered. It is estimated that 40% of all of the gold ever mined has come out of the Basin. In 1970, South Africa’s output accounted for 79% of the world’s gold production. By 2009, South Africa’s share of world gold production had dropped to less than 8%. Mining in the Witwatersrand Basin is accomplished by creating deep underground tunnels that are necessary to reach the plentiful reserves. The Tau Tona Mine features the deepest tunnel in the world extending a full 2.4 miles below the earth’s surface. A massive ventilation and air conditioning system is required to overcome the extreme working conditions throughout more than 500 miles of tunnels. At its deepest levels, the air temperature reaches 131 degrees farenheit and the rock face itself 140 farenheit. The mine is so extensive that it takes workers a full two hours to travel from the surface to the deepest sections of the mine where they must then contend with pockets of lethal gas, water and a continual barrage of small earthquakes. The discovery of gold in the Basin in 1886 by Australian miner George Walker set off one of the largest gold rushes in history. The surrounding area became the city of Johannesburg, and within ten years Johannesburg was the largest city in South Africa.
2. Carlin Trend (Nevada, US). For over a hundred years, prospectors in the Western US completely missed one of the richest gold fields in the world, as it contained what is now popularly called ‘invisible gold.’ Historically, most gold fields were discovered by the presence of gold veins or deposits visible to the naked eye. Not so in the Carlin Trend located in northeast Nevada. Hot springs containing dissolved gold deposited the metal into the sediment in such fine particles that it is difficult to see even with a microscope and impossible to find using older conventional methods such as hand tools and panning. In 1961, John Livermore, a geologist for Newmont Mining, set out in search of this invisible gold based on some ideas in a paper published a year before by noted geologist Ralph Roberts. It didn’t take long before Livermore found what he was looking for in an area that is now known as the Carlin Trend. The deposit was the first major one of its kind discovered. Subsequent discoveries of similar type areas in China and Macedonia are referred to as Carlin Trend type deposits. Mining by Newmont began in 1965; the area has since become one of the richest gold fields in the world. Open pit mining dominates the Carlin Trend over its five by 40 mile area although some underground operations have been formed in higher grade areas. Gold production in the state of Nevada, which is dominated by the Carlin Trend, accounts for almost 80% of the gold mined in the United States. If Nevada were a country, it would rank #4 in the world in terms of total gold production.
3. Irian Jaya (Indonesia). In one of the most inaccessible spots on the planet lie the single largest gold orebody and third largest copper orebody ever discovered. Located in the mountains of Irian Jaya, Indonesia, at an elevation of 14,010 ft, is the Grasberg Mine. Two miles away lies its predecessor, the Ertsberg Mine. The amazing feat of their construction by Freeport McMoRan is the subject of an episode of Discovery Channel’s Super Structures. Work on the original Ertsberg Mine began in 1967 with the construction of a dock and a 25 mile road through the surrounding jungle. Chainsaw-wielding workers were lowered from helicopters to cut their way clear to the jungle floor. Bulldozers were flown in where they often had to contend with 20 feet of soft marshland before reaching solid ground. The final section of mountain road was built atop a ridge so narrow that the first clearing pass had to be done with bulldozers no bigger than riding lawn mowers. Six subsequent iterations of air lifting increasingly larger bulldozers were used to complete the road. A tram system had to be built to surmount the final 2,000 foot cliff that separates the road from the mine site. Getting the mined ore off of the mountain is a much more efficient process: it is simply dropped 2,000 feet to the giant crushers below. The processed ore is mixed with water to create a gold and copper slurry which travels through 70 miles of pipe out to the shore. From there, the slurry is concentrated and the ore then transported to smelters around the world. The original Ertsberg Mine operated from 1972 until it was depleted in the mid 1980s. In 1988, Freeport McMoRan discovered the enormous neighboring ore body that is today operating as the Grasberg Mine. Gold production was 2.5 million ounces in 2009. Open pit operations will continue through 2015 at which point the gold will be mined by underground methods.
4. The Super Pit (Kalgoorlie, Western Australia). The Super Pit, located in Kalgoorlie, Western Australia, is the largest open pit mine in the country. It covers an area of almost three square miles and is large enough to be seen from space. The excavation began after several underground mines were acquired by Kalgoorlie Consolidated Gold Mines. Even today, operations occasionally unearth old mining tunnels complete with abandoned mining equipment. The Super Pit covers an area known as the Golden Mile, a name that dates back to the original gold rush of the late 19th century. During this time, the field was considered to be the richest square mile in the world. The area has been continually mined for over 100 years, and the Super Pit is expected to remain in production through at least 2017. Once retired, the mine will be allowed to fill in with ground water, a process that could take 50 years. The city of Kalgoorlie was formed in 1893 right after Irishman Paddy Hannan filed a Reward Claim leading to an influx of hopeful prospectors. The subsequent gold rush saw the surrounding area boom over the next 10 years, temporarily reaching a population of almost 200,000. It was during this time that Kalgoorlie’s famous Hay Street brothels began. Much like the mine, they have also been in continuous operation for over a century and are now an accepted part of the community. Today, Kalgoorlie has a population of less than 30,000 with about one fourth of its jobs directly related to mining.
5. Yanacocha (Peru). Located high in the Andes Mountains, with parts reaching elevations in excess of 13,000 feet, is the sprawling complex known as Yanacocha. Covering some 60 square miles, it is the largest gold mine in Latin America, possibly the second largest in the world, and is recognized as one of the most profitable in the world. Yanacocha is the largest facility operated by Newmont Mining and is the company’s crown jewel. With almost US$2 billion dollars invested in the mine, Newmont has received a return of over US$7 billion to date. In 1994, a legal battle for Yanacocha erupted between Newmont Mining and its French partner BRGM, after BRGM attempted to sell its stake to a Newmont rival. A controversial decision by the Peruvian high court allowed Newmont and its Peruvian partner Buenaventura to buy out BRGM’s stake. The aftermath was ugly with both sides accusing one another of engaging in improper conduct in attempting to influence the decision. Since its origins in 1993, Yanacocha has produced more than 26 million ounces of gold.
[Note: The post had to be shortened to five mines because of ASF size requirements]
This article first appeared on Bill's Blog on The CMI Gold & Silver website.
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May 07, 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 cope with a few tough days?
Oz. Surprisingly well, considering the extent of the mid-week commodities correction. Most companies lost ground, but not excessively. We even had a few solid rises in the wake of discovery and development news. We’ll get to those later, but first the big picture. Overall, the Australian market lost just 1.7 per cent as measured by the all ordinaries. The metals and mining index lost 2.7 per cent, and the gold index was down five per cent. One reason for the relatively modest declines in the indices was a US2 cent slide in the Australian dollar exchange rate. That took a little pressure off exporters, and eased the decline in gold stocks.
Minews. And was there anything going against the trend at all?
Oz. Pick of that pack was Spitfire Resources (SPI) which has attracted great interest after reporting what looks to be a significant manganese discovery at its South Woodie Woodie project. It rose 39 per cent to close the week at a 12 month high of A25 cents. Also on the rise were Mt Gibson (MGX), which rose A12 cents to A$2.00, and FerrAus (FRS) which rose A10.5 cents respectively to A83.5 cents. Lynas (LYC) was the best of a relatively strong rare earths sector, adding A16 cents to A$2.25. Orocobre (ORE) also did well with a rise of A12 cents to A$2.55. Alkane (ALK) also swam against the negative sentiment with a gain of A5 cents to A$2.26.
And a handful of precious metal stocks also ignored the overall trend. These were led by Kingsgate (KCN), which has resolved some of its mine expansion issues in Thailand, news which helped the stock add A14 cents to A$7.90. Troy (TRY) also defied the sell-off thanks to the acquisition of fresh tenements in South America, rising a modest A2 cents to A$3.61. Nyota (NYO) crept up by A1 cent. Alcyone (AYN), the silver company we took a look at a few days ago ended the week up a very modest half a cent at A13 cents, but that was well up on its mid-week low of A8.7 cents, a price registered during the silver-price panic.
Minews. You say panic, but are investors in Australia seeing last week’s sell-down as anything more than a correction?
Oz. As a matter of fact no. There’s no question that the market had got ahead of itself with a burst of irrational exuberance. But there’s equally no question that China and India disappeared overnight. India in particular is becoming an increasingly important commodity customer for Australia, and potential supplier of English-speaking labour for under-staffed and under-skilled resource projects in this country. Cricket has also made it a somewhat more civilised country than China which still has the unseemly habit of jailing people it doesn’t like.
Minews. You’re getting off the theme of this little chat there, let’s get back to share prices and leave the deeper stuff for another day.
Oz. Sorry, but there is a big story emerging somewhere in that little rant. Gold is the logical starting point for the market wrap, but there isn’t much else that’s positive to report after the moves we mentioned earlier. The list of the fallen which reads like this: Medusa (MML), down A18 cents to A$7.85, Catalpa (CAH) down A8 cents to A$1.37, Allied (ALD) down A3.5 cents to A51.5 cents, Gold Road (GOR), down A9 cents to A63 cents, Kingsrose (KRM) down A15 cents to A$1.46, Resolute (RSG) down A12 cents to A$1.05, Gryphon (GRY) down A4 cents to A$1.53, and Integra (IGR) down A1.5 cents to A45 cents.
Minews. Nothing too painful there given that the gold price slid back below the US$1,500 per ounce mark. Base metals next, please.
Oz. There is less good news in the copper, nickel and zinc sectors, where only a handful of rises offsetting the negative tone. The copper card reads like this: OZ Minerals (OZL) down A5.5 cents to A$1.39, PanAust (PNA) down A1.5 cents to A75.5 cents, Metminco (MNC) down A3 cents to A42.5 cents. Sandfire (SFR) down A56 cents to A$6.59, CuDeco (CDU) down A21 cents to A$3.22, and Hot Chili (HCH) down A3.5 cents to A66.5 cents.
Nickel was in slightly better favour, and there were three interesting upward moves. Minara (MRE), the old Anaconda Nickel which is now controlled by Glencore, added A1 cent to A78 cents, perhaps in anticipation of a mopping up post the float of Glencore. Panoramic (PAN) was another nickel company to gain ground, putting in a surprise rise of A5 cents to A$2.11, and Mirabela (MBN) added A4 cents to A$2.01. All other nickel companies lost ground, including Western Areas (WSA) which fell A26 cents to A$6.45, Mincor (MCR), which fell A8.5 cents to A$1.11, and Independence (IGO), which fell A54 cents to A$6.07.
Zinc companies were all down, but not a lot. Perilya (PEM) slipped A1.5 cents lower to A60.5 cents. Kagara (KZL) was down by A4.5 cents to A54.5 cents. Terramin (TZN) eased back by A1.5 cents to A35 cents, and Blackthorn (BTR) lost the minimum amount possible, half a cent to A61.5 cents.
Minews. Iron ore and coal now, please.
Oz. After the few iron ore companies that we mentioned earlier it was all negative, but not excessively so. Among the movers were Fortescue (FMG), down A3 cents to A$6.12, Atlas (AGO), down A15 cents to A$3.35, Brockman (BRM), down A26 cents to A$4.85, Iron Ore Holdings (IOH), down A3.5 cents to A$1.56, and Territory (TTY), down A3 cents to A23 cents.
Coal stocks were all down, bar one. Riversdale (RIV) crept A8 cents higher to A$16.58 thanks to ongoing interest in Rio Tinto’s attempts to wrap up full control of the company. After that there was a long list of falls including: Macarthur (MCC), down A73 cents to A$10.83, Carabella (CLR), down A5 cents to A$2.14, Stanmore (SMR), down A15.5 cents to A$1.08, and Coal of Africa (CZA), down A2 cents to A$1.18.
Minews. Uranium and minor metals to close.
Oz. There was surprising strength in the uranium market, perhaps thanks to the rebound after the Fukushima sell down. Mantra (MRU) continues to attract interest in its African projects, adding A10 cents last week to A$6.84. Extract (EXT) made progress towards a Chinese takeover despite a technical delay to allow it to comply with British takeover laws for its parent, Kalahari Minerals. Extract added A82 cents to A$7.50. Also on the rise was Manhattan (MHC), which clawed back recently lost ground with a rise of A4 cents to A69 cents. Among the fallers were Bannerman (BMN), which slipped A2 cents to A32 cents, and Paladin (PDN), which shed A2 cents to close the week at A3.28.
Venture (VMS) was the pick of the tin companies, putting in a modest rise of half a cent to A42 cents in the wake of steady progress on its Mt Lindsay project in Tasmania. Wolf Minerals (WLF), the Devon tin and tungsten explorer, slipped A2 cents lower to A43.5 cents.
Minews. Thanks Oz.
******
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 cope with a few tough days?
Oz. Surprisingly well, considering the extent of the mid-week commodities correction. Most companies lost ground, but not excessively. We even had a few solid rises in the wake of discovery and development news. We’ll get to those later, but first the big picture. Overall, the Australian market lost just 1.7 per cent as measured by the all ordinaries. The metals and mining index lost 2.7 per cent, and the gold index was down five per cent. One reason for the relatively modest declines in the indices was a US2 cent slide in the Australian dollar exchange rate. That took a little pressure off exporters, and eased the decline in gold stocks.
Minews. And was there anything going against the trend at all?
Oz. Pick of that pack was Spitfire Resources (SPI) which has attracted great interest after reporting what looks to be a significant manganese discovery at its South Woodie Woodie project. It rose 39 per cent to close the week at a 12 month high of A25 cents. Also on the rise were Mt Gibson (MGX), which rose A12 cents to A$2.00, and FerrAus (FRS) which rose A10.5 cents respectively to A83.5 cents. Lynas (LYC) was the best of a relatively strong rare earths sector, adding A16 cents to A$2.25. Orocobre (ORE) also did well with a rise of A12 cents to A$2.55. Alkane (ALK) also swam against the negative sentiment with a gain of A5 cents to A$2.26.
And a handful of precious metal stocks also ignored the overall trend. These were led by Kingsgate (KCN), which has resolved some of its mine expansion issues in Thailand, news which helped the stock add A14 cents to A$7.90. Troy (TRY) also defied the sell-off thanks to the acquisition of fresh tenements in South America, rising a modest A2 cents to A$3.61. Nyota (NYO) crept up by A1 cent. Alcyone (AYN), the silver company we took a look at a few days ago ended the week up a very modest half a cent at A13 cents, but that was well up on its mid-week low of A8.7 cents, a price registered during the silver-price panic.
Minews. You say panic, but are investors in Australia seeing last week’s sell-down as anything more than a correction?
Oz. As a matter of fact no. There’s no question that the market had got ahead of itself with a burst of irrational exuberance. But there’s equally no question that China and India disappeared overnight. India in particular is becoming an increasingly important commodity customer for Australia, and potential supplier of English-speaking labour for under-staffed and under-skilled resource projects in this country. Cricket has also made it a somewhat more civilised country than China which still has the unseemly habit of jailing people it doesn’t like.
Minews. You’re getting off the theme of this little chat there, let’s get back to share prices and leave the deeper stuff for another day.
Oz. Sorry, but there is a big story emerging somewhere in that little rant. Gold is the logical starting point for the market wrap, but there isn’t much else that’s positive to report after the moves we mentioned earlier. The list of the fallen which reads like this: Medusa (MML), down A18 cents to A$7.85, Catalpa (CAH) down A8 cents to A$1.37, Allied (ALD) down A3.5 cents to A51.5 cents, Gold Road (GOR), down A9 cents to A63 cents, Kingsrose (KRM) down A15 cents to A$1.46, Resolute (RSG) down A12 cents to A$1.05, Gryphon (GRY) down A4 cents to A$1.53, and Integra (IGR) down A1.5 cents to A45 cents.
Minews. Nothing too painful there given that the gold price slid back below the US$1,500 per ounce mark. Base metals next, please.
Oz. There is less good news in the copper, nickel and zinc sectors, where only a handful of rises offsetting the negative tone. The copper card reads like this: OZ Minerals (OZL) down A5.5 cents to A$1.39, PanAust (PNA) down A1.5 cents to A75.5 cents, Metminco (MNC) down A3 cents to A42.5 cents. Sandfire (SFR) down A56 cents to A$6.59, CuDeco (CDU) down A21 cents to A$3.22, and Hot Chili (HCH) down A3.5 cents to A66.5 cents.
Nickel was in slightly better favour, and there were three interesting upward moves. Minara (MRE), the old Anaconda Nickel which is now controlled by Glencore, added A1 cent to A78 cents, perhaps in anticipation of a mopping up post the float of Glencore. Panoramic (PAN) was another nickel company to gain ground, putting in a surprise rise of A5 cents to A$2.11, and Mirabela (MBN) added A4 cents to A$2.01. All other nickel companies lost ground, including Western Areas (WSA) which fell A26 cents to A$6.45, Mincor (MCR), which fell A8.5 cents to A$1.11, and Independence (IGO), which fell A54 cents to A$6.07.
Zinc companies were all down, but not a lot. Perilya (PEM) slipped A1.5 cents lower to A60.5 cents. Kagara (KZL) was down by A4.5 cents to A54.5 cents. Terramin (TZN) eased back by A1.5 cents to A35 cents, and Blackthorn (BTR) lost the minimum amount possible, half a cent to A61.5 cents.
Minews. Iron ore and coal now, please.
Oz. After the few iron ore companies that we mentioned earlier it was all negative, but not excessively so. Among the movers were Fortescue (FMG), down A3 cents to A$6.12, Atlas (AGO), down A15 cents to A$3.35, Brockman (BRM), down A26 cents to A$4.85, Iron Ore Holdings (IOH), down A3.5 cents to A$1.56, and Territory (TTY), down A3 cents to A23 cents.
Coal stocks were all down, bar one. Riversdale (RIV) crept A8 cents higher to A$16.58 thanks to ongoing interest in Rio Tinto’s attempts to wrap up full control of the company. After that there was a long list of falls including: Macarthur (MCC), down A73 cents to A$10.83, Carabella (CLR), down A5 cents to A$2.14, Stanmore (SMR), down A15.5 cents to A$1.08, and Coal of Africa (CZA), down A2 cents to A$1.18.
Minews. Uranium and minor metals to close.
Oz. There was surprising strength in the uranium market, perhaps thanks to the rebound after the Fukushima sell down. Mantra (MRU) continues to attract interest in its African projects, adding A10 cents last week to A$6.84. Extract (EXT) made progress towards a Chinese takeover despite a technical delay to allow it to comply with British takeover laws for its parent, Kalahari Minerals. Extract added A82 cents to A$7.50. Also on the rise was Manhattan (MHC), which clawed back recently lost ground with a rise of A4 cents to A69 cents. Among the fallers were Bannerman (BMN), which slipped A2 cents to A32 cents, and Paladin (PDN), which shed A2 cents to close the week at A3.28.
Venture (VMS) was the pick of the tin companies, putting in a modest rise of half a cent to A42 cents in the wake of steady progress on its Mt Lindsay project in Tasmania. Wolf Minerals (WLF), the Devon tin and tungsten explorer, slipped A2 cents lower to A43.5 cents.
Minews. Thanks Oz.
******
May 09, 2011
Commodities Hit Turbulence, But Gold Still Offers The Smoothest Ride
By Rob Davies
www.minesite.com/aus.html (Free registration)
Changes to the balance of demand and supply for commodities usually come slowly and are often not apparent until some time afterwards. Prices, on the other hand, can move a lot and quite quickly. That was apparent last week. Silver lead the metals down, dropping 30 per cent to US$36 an ounce. The proximate reason was an increase in margin requirements from US$11,745 to US$21,600 per contract on Comex. A secondary reason was a bounce in the dollar on further concerns over the situation in Greece. Then word went round the market that George Soros had bailed out of his positions in both silver and gold. And more generally there are still worries that the US economy is not growing fast enough, despite a good jobs report on Friday.
Another underlying concern relates to China. China has recently raised rates and increased the level of reserve its banks must hold, and the thinking is that these efforts to slow the economy there might actually start to work soon. If the Chinese economy does start to slow, there’s likely to be a corresponding reduction in demand for commodities.
And if that wasn’t enough bearish sentiment to be going on with, there’s a widely held view in the market that the impending listing of Glencore, the world’s largest commodity trader, sends a pretty powerful message that some of the best connected people in the business think the market is closer to the top than the bottom.
Although silver recorded the biggest fall, all metals with terminal pricing suffered. Gold fell 4.75 per cent to US$1,495 an ounce. The base metals as a group dropped six per cent to 4023.7 as measured by the LME Index. And a 2.3 per cent fall in the Shanghai stock market emphasised the Sino-centric nature of the change in the mood music.
No one would argue that the fundamentals of commodities remain anything other than robust at the current time. However, sentiment can change a lot faster than large capital intensive projects can. You can’t easily suddenly stop construction of a new mine when banks want their finance repaid and suppliers have already delivered kit and want paid for it. In that regard base metals are probably more vulnerable than precious metals, because the mines that supply them tend to be bigger than those producing precious metals.
Maybe it is this inflexibility that contributed to the larger 6.2 per cent fall in copper to US$8,790 a tonne and to the 6.2 per cent drop in nickel taking it to US$24,970 a tonne. But the biggest decline was recorded by tin, which slumped by 9.8 per cent to US$29,100 a tonne. The magnitude of the fall was perhaps exacerbated by the narrow nature of its market. By contrast, aluminium, with the largest tonnage of all the base metals, was the least affected. It only fell by 3.3 per cent to US$2,680 a tonne. Lead was marked down by six per cent to US$2,378, while zinc dropped 4.3 per cent to US$2,125 a tonne.
To some extent these sharp moves reflect a quick venting of gas from some commodities that had ballooned very rapidly. Silver is the obvious case in point. No one knows yet if the Chinese authorities will be successful in slowing their economy. The experience of Japan over the last two decades offers a nearby example of how a bubble economy can take a long, long time to recover when it does go wrong.
On the other hand nothing in the recent news flow has done anything to change the prospects for the gold market. Despite some military success, the US is still living way beyond its current and forecast means, and seems intent on using monetisation of its debt through inflation as its escape route. Since the supply of gold is dependent on the viability of lots and lots of new small mines, it is impossible to envisage a huge upsurge in new metal coming to the market. In such an environment the outlook for gold looks better than for base metals, at least for the short to medium term.
*****
Commodities Hit Turbulence, But Gold Still Offers The Smoothest Ride
By Rob Davies
www.minesite.com/aus.html (Free registration)
Changes to the balance of demand and supply for commodities usually come slowly and are often not apparent until some time afterwards. Prices, on the other hand, can move a lot and quite quickly. That was apparent last week. Silver lead the metals down, dropping 30 per cent to US$36 an ounce. The proximate reason was an increase in margin requirements from US$11,745 to US$21,600 per contract on Comex. A secondary reason was a bounce in the dollar on further concerns over the situation in Greece. Then word went round the market that George Soros had bailed out of his positions in both silver and gold. And more generally there are still worries that the US economy is not growing fast enough, despite a good jobs report on Friday.
Another underlying concern relates to China. China has recently raised rates and increased the level of reserve its banks must hold, and the thinking is that these efforts to slow the economy there might actually start to work soon. If the Chinese economy does start to slow, there’s likely to be a corresponding reduction in demand for commodities.
And if that wasn’t enough bearish sentiment to be going on with, there’s a widely held view in the market that the impending listing of Glencore, the world’s largest commodity trader, sends a pretty powerful message that some of the best connected people in the business think the market is closer to the top than the bottom.
Although silver recorded the biggest fall, all metals with terminal pricing suffered. Gold fell 4.75 per cent to US$1,495 an ounce. The base metals as a group dropped six per cent to 4023.7 as measured by the LME Index. And a 2.3 per cent fall in the Shanghai stock market emphasised the Sino-centric nature of the change in the mood music.
No one would argue that the fundamentals of commodities remain anything other than robust at the current time. However, sentiment can change a lot faster than large capital intensive projects can. You can’t easily suddenly stop construction of a new mine when banks want their finance repaid and suppliers have already delivered kit and want paid for it. In that regard base metals are probably more vulnerable than precious metals, because the mines that supply them tend to be bigger than those producing precious metals.
Maybe it is this inflexibility that contributed to the larger 6.2 per cent fall in copper to US$8,790 a tonne and to the 6.2 per cent drop in nickel taking it to US$24,970 a tonne. But the biggest decline was recorded by tin, which slumped by 9.8 per cent to US$29,100 a tonne. The magnitude of the fall was perhaps exacerbated by the narrow nature of its market. By contrast, aluminium, with the largest tonnage of all the base metals, was the least affected. It only fell by 3.3 per cent to US$2,680 a tonne. Lead was marked down by six per cent to US$2,378, while zinc dropped 4.3 per cent to US$2,125 a tonne.
To some extent these sharp moves reflect a quick venting of gas from some commodities that had ballooned very rapidly. Silver is the obvious case in point. No one knows yet if the Chinese authorities will be successful in slowing their economy. The experience of Japan over the last two decades offers a nearby example of how a bubble economy can take a long, long time to recover when it does go wrong.
On the other hand nothing in the recent news flow has done anything to change the prospects for the gold market. Despite some military success, the US is still living way beyond its current and forecast means, and seems intent on using monetisation of its debt through inflation as its escape route. Since the supply of gold is dependent on the viability of lots and lots of new small mines, it is impossible to envisage a huge upsurge in new metal coming to the market. In such an environment the outlook for gold looks better than for base metals, at least for the short to medium term.
*****
"Commodity Prices vs Recent Lows"
May 11, 2011
By the looks of today's trading, it does not look like the two day rebound in commodity prices will have any staying power. After some sharp rebounds off of last week's lows, some of the major commodities are beginning to come within close range of last week's lows. In fact, in the case of copper last week's lows would be an improvement compared to current prices.
To view the table, please click the link below
http://www.bespokeinvest.com/thinkbig/2011/5/11/commodity-prices-vs-recent-lows.html
May 11, 2011
By the looks of today's trading, it does not look like the two day rebound in commodity prices will have any staying power. After some sharp rebounds off of last week's lows, some of the major commodities are beginning to come within close range of last week's lows. In fact, in the case of copper last week's lows would be an improvement compared to current prices.
To view the table, please click the link below
http://www.bespokeinvest.com/thinkbig/2011/5/11/commodity-prices-vs-recent-lows.html
May 14, 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. How was your week?
Oz. A mixed bag. The market was flat, trending down. The politics were hot, heating up. On the ASX the overall picture was one of a gentle decline, as measured by the 0.6 per cent fall on the all ordinaries index. The mining index was off by a little less at 0.4 per cent, while the gold index slid 2.1 per cent lower, a fall caused largely by a decline in one share price, that of the sector leader, Newcrest (NCM), which fell by A$1.08 to A$38.30.
Minews. Before we run through the prices, did you mention politics because the mining tax is back in the news?
Oz. Not directly, but it got an airing again when the government delivered its budget for the year ahead. There wasn’t anything terribly exciting in it, except for the continued evidence that Australia’s future is very dependent on China. There seems no doubt that if China catches a cold we’ll get the flu. But, separate to that rather obvious view of the way the world works was a very optimistic assessment of the future demand for minerals from the normally conservative Treasury boffins. They’re confident about prices staying high and that in turn has sparked a fresh debate about whether mining should be whacked with heavier taxes.
Minews. All very predictable given the state of government finances around the world. Let’s move across to prices now, please, continuing with gold.
Oz. Good decision, because despite the slide in the index there were a surprising number of gold companies that posted modest rises, and there was also a spot of proposed merger activity. The deal which made the headlines was a proposed merger between St Barbara Mines (SBM) and Catalpa Resources (CAH). Investors reacted to an unsolicited offer from St Barbara by marking down the bidder and marking up the target. St Barbara lost A25 cents to A$1.87 and Catalpa rose by A32 cents to A$1.69.
Minews. We might take a closer look at that situation next week because Catalpa does appear to be one of the more interesting Aussie gold companies.
Oz. That can be done. Meanwhile, it’s worth noting that on a head count basis, more gold companies rose last week than fell, and that it was Newcrest which almost single-handedly pulled the index down. Among the other companies that had reasonable week was Beadell Resources (BDR), which is making solid progress with its combined gold and iron ore mine in Brazil. It added A6.5 cents to A80 cents last week. Elsewhere, Nyota (NYO) put on A2.5 cents to A26.5 cents. Gryphon (GRY) rose by A2 cents to A1.55. Troy (TRY) gained A4 cents to A$3.65. Adamus (ADU) added A2 cents to A67.5 cents. Gold Road (GOR) crept A1 cent higher to A64 cents. Ausgold put on A5 cents to A$1.47. And Gold One (GDO) added A1.5 cents to A43 cents. After that comes list of fallers, though none were severe. These included Resolute (RSG), down A3.5 cents to A$1.02, OceanaGold (OGC), down A20 cents to A$2.28, and Kingsgate (KCN), down A2 cents to A$7.88.
Two of the locally-listed silver companies, Cerro (CJO) and Silver Mines (SVL), regained recently lost ground. Cerro added A1.5 cents to A27 cents, and Silver Mines put on A2.5 cents to A31 cents. Two other silver companies lost ground. Alcyone (AYN) slipped A1.5 cents lower to A11.5 cents, and Cobar Consolidated (CCU), lost A8 cents to A84 cents
Minews. Iron ore next, as there also seem to have been a few encouraging rises there.
Oz. There were. Atlas Iron (AGO) lead the way with a rise of A27 cents to A$3.62. And it was followed closely by Territory (TTY), which regained lost ground, with a rise of A4 cents to A27 cents. Other positive moves came from Fortescue (FMG), up A16 cents to A$6.28, Murchison (MMX), up A5 cents to A$1.07, and BC Iron (BCI), up A5 cents to A$2.90. Falls were posted by Gindalbie (GBG), down A2 cents to A95.5 cents, Sundance Resources (SDL), down A1.5 cents to A36 cents, Sherwin (SHD), down A2 cents to A14 cents, and Mt Gibson (MGX), down A1 cent to A$1.99. Also worse off was Brockman (BRM), which appears close to losing its takeover struggle with Hong Kong’s Wah Nam International. Brockman’s shares fell by A43 cents to A$4.48.
Minews. Base metals now, please.
Oz. Nickel showed signs of life. Copper was flat, and zinc was flatter. Among the nickel miners that were better off was Mincor (MCR), which reversed several weeks of decline with a gain of A2 cents to A$1.13. Mirabela (MBN) added A5 cents to A$2.06, and Independence (IGO) gained A13 cents to A$6.20. On the way down, Western Areas (WSA) slipped A13 cents lower to A$6.32, and Panoramic (PAN) eased back by A8 cents to A$2.03.
Best of the copper companies were OZ Minerals (OZL), which added A4 cents to A$1.43, and Rex (RXM), which rose A3 cents to A$2.54. Falls came from Metminco (MHC), down A1.5 cents to A41 cents, Sandfire (SFR), down A17 cents to A$6.42, Hot Chili (HCH), down A1.5 cents to A65 cents, and PanAust (PNA), down A1 cent to A74.5 cents.
Zinc companies were generally worse off. Blackthorn (BTR) had the biggest fall, dropping A6.5 cents to A55 cents. Terramin (TZN) lost A4.5 cents to A30.5 cents, and Kagara (KZL) closed at A53 cents for a loss over the week of A1.5 cents.
Minews. Uranium and coal next.
Oz. There were a few good rises in each of those sectors, but with long tails of shares which lost ground. Among the uranium explorers Bannerman (BMN) had the best week, putting in a rise of A3 cents to A35 cents. Energy and Metals (EMA) recovered a little of its recent losses with a rise of A2 cents to A18 cents. Mantra (MRU) crept A2 cents high to A$6.86. Extract (EXT) slipped A1 cent lower to A$7.49 as a proposed bid for its parent, Kalahari Minerals, drags on. Berkeley (BKY) lost A1 cent to close at A84 cents.
There were two solid risers among the coal companies. Stanmore (SMR) added an eye-catching A20 cents to A$1.28, and Macarthur Coal (MCC) put on A59 cents to A$11.42. Elsewhere, Coal of Africa (CZA) chimed in with a A3 cent rise to A$1.21, but after that it was downhill. Losses were posted by Bathurst (BTU), down A2 cents to A$1.07, Coalworks (CWK), down A3 cents to A74 cents, and Continental Coal (CCC) down by the smallest amount possible, a loss of A0.1 of a cent to A5.6 cents.
Minews. And minor metals to close, please.
Oz. There were two stand out upward moves among the multitude of minor metal plays. Wolf Minerals (WLF), the Devon tin and tungsten play, added A9 cents to A54.5 cents. And South Boulder Mines (STB), the potash explorer, rose by A26 cents to A$3.63. Offsetting those gains was a sell-off among the rare earth companies. Alkane (ALK) fell a sharp A36.5 cents to A$1.90. Arafura (ARU) dropped by A9 cents to A$1.09, and Lynas (LYC), which has dumped a controversial plan to sell assets to a company associated with its chairman, lost A11 cents to A$2.14.
Minews. Thanks Oz.
********************
"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. How was your week?
Oz. A mixed bag. The market was flat, trending down. The politics were hot, heating up. On the ASX the overall picture was one of a gentle decline, as measured by the 0.6 per cent fall on the all ordinaries index. The mining index was off by a little less at 0.4 per cent, while the gold index slid 2.1 per cent lower, a fall caused largely by a decline in one share price, that of the sector leader, Newcrest (NCM), which fell by A$1.08 to A$38.30.
Minews. Before we run through the prices, did you mention politics because the mining tax is back in the news?
Oz. Not directly, but it got an airing again when the government delivered its budget for the year ahead. There wasn’t anything terribly exciting in it, except for the continued evidence that Australia’s future is very dependent on China. There seems no doubt that if China catches a cold we’ll get the flu. But, separate to that rather obvious view of the way the world works was a very optimistic assessment of the future demand for minerals from the normally conservative Treasury boffins. They’re confident about prices staying high and that in turn has sparked a fresh debate about whether mining should be whacked with heavier taxes.
Minews. All very predictable given the state of government finances around the world. Let’s move across to prices now, please, continuing with gold.
Oz. Good decision, because despite the slide in the index there were a surprising number of gold companies that posted modest rises, and there was also a spot of proposed merger activity. The deal which made the headlines was a proposed merger between St Barbara Mines (SBM) and Catalpa Resources (CAH). Investors reacted to an unsolicited offer from St Barbara by marking down the bidder and marking up the target. St Barbara lost A25 cents to A$1.87 and Catalpa rose by A32 cents to A$1.69.
Minews. We might take a closer look at that situation next week because Catalpa does appear to be one of the more interesting Aussie gold companies.
Oz. That can be done. Meanwhile, it’s worth noting that on a head count basis, more gold companies rose last week than fell, and that it was Newcrest which almost single-handedly pulled the index down. Among the other companies that had reasonable week was Beadell Resources (BDR), which is making solid progress with its combined gold and iron ore mine in Brazil. It added A6.5 cents to A80 cents last week. Elsewhere, Nyota (NYO) put on A2.5 cents to A26.5 cents. Gryphon (GRY) rose by A2 cents to A1.55. Troy (TRY) gained A4 cents to A$3.65. Adamus (ADU) added A2 cents to A67.5 cents. Gold Road (GOR) crept A1 cent higher to A64 cents. Ausgold put on A5 cents to A$1.47. And Gold One (GDO) added A1.5 cents to A43 cents. After that comes list of fallers, though none were severe. These included Resolute (RSG), down A3.5 cents to A$1.02, OceanaGold (OGC), down A20 cents to A$2.28, and Kingsgate (KCN), down A2 cents to A$7.88.
Two of the locally-listed silver companies, Cerro (CJO) and Silver Mines (SVL), regained recently lost ground. Cerro added A1.5 cents to A27 cents, and Silver Mines put on A2.5 cents to A31 cents. Two other silver companies lost ground. Alcyone (AYN) slipped A1.5 cents lower to A11.5 cents, and Cobar Consolidated (CCU), lost A8 cents to A84 cents
Minews. Iron ore next, as there also seem to have been a few encouraging rises there.
Oz. There were. Atlas Iron (AGO) lead the way with a rise of A27 cents to A$3.62. And it was followed closely by Territory (TTY), which regained lost ground, with a rise of A4 cents to A27 cents. Other positive moves came from Fortescue (FMG), up A16 cents to A$6.28, Murchison (MMX), up A5 cents to A$1.07, and BC Iron (BCI), up A5 cents to A$2.90. Falls were posted by Gindalbie (GBG), down A2 cents to A95.5 cents, Sundance Resources (SDL), down A1.5 cents to A36 cents, Sherwin (SHD), down A2 cents to A14 cents, and Mt Gibson (MGX), down A1 cent to A$1.99. Also worse off was Brockman (BRM), which appears close to losing its takeover struggle with Hong Kong’s Wah Nam International. Brockman’s shares fell by A43 cents to A$4.48.
Minews. Base metals now, please.
Oz. Nickel showed signs of life. Copper was flat, and zinc was flatter. Among the nickel miners that were better off was Mincor (MCR), which reversed several weeks of decline with a gain of A2 cents to A$1.13. Mirabela (MBN) added A5 cents to A$2.06, and Independence (IGO) gained A13 cents to A$6.20. On the way down, Western Areas (WSA) slipped A13 cents lower to A$6.32, and Panoramic (PAN) eased back by A8 cents to A$2.03.
Best of the copper companies were OZ Minerals (OZL), which added A4 cents to A$1.43, and Rex (RXM), which rose A3 cents to A$2.54. Falls came from Metminco (MHC), down A1.5 cents to A41 cents, Sandfire (SFR), down A17 cents to A$6.42, Hot Chili (HCH), down A1.5 cents to A65 cents, and PanAust (PNA), down A1 cent to A74.5 cents.
Zinc companies were generally worse off. Blackthorn (BTR) had the biggest fall, dropping A6.5 cents to A55 cents. Terramin (TZN) lost A4.5 cents to A30.5 cents, and Kagara (KZL) closed at A53 cents for a loss over the week of A1.5 cents.
Minews. Uranium and coal next.
Oz. There were a few good rises in each of those sectors, but with long tails of shares which lost ground. Among the uranium explorers Bannerman (BMN) had the best week, putting in a rise of A3 cents to A35 cents. Energy and Metals (EMA) recovered a little of its recent losses with a rise of A2 cents to A18 cents. Mantra (MRU) crept A2 cents high to A$6.86. Extract (EXT) slipped A1 cent lower to A$7.49 as a proposed bid for its parent, Kalahari Minerals, drags on. Berkeley (BKY) lost A1 cent to close at A84 cents.
There were two solid risers among the coal companies. Stanmore (SMR) added an eye-catching A20 cents to A$1.28, and Macarthur Coal (MCC) put on A59 cents to A$11.42. Elsewhere, Coal of Africa (CZA) chimed in with a A3 cent rise to A$1.21, but after that it was downhill. Losses were posted by Bathurst (BTU), down A2 cents to A$1.07, Coalworks (CWK), down A3 cents to A74 cents, and Continental Coal (CCC) down by the smallest amount possible, a loss of A0.1 of a cent to A5.6 cents.
Minews. And minor metals to close, please.
Oz. There were two stand out upward moves among the multitude of minor metal plays. Wolf Minerals (WLF), the Devon tin and tungsten play, added A9 cents to A54.5 cents. And South Boulder Mines (STB), the potash explorer, rose by A26 cents to A$3.63. Offsetting those gains was a sell-off among the rare earth companies. Alkane (ALK) fell a sharp A36.5 cents to A$1.90. Arafura (ARU) dropped by A9 cents to A$1.09, and Lynas (LYC), which has dumped a controversial plan to sell assets to a company associated with its chairman, lost A11 cents to A$2.14.
Minews. Thanks Oz.
********************
Andy Xie /// 05.06.2011
Chimerica's Slippery Slope to Stagflation
Watch for more Fed quantitative easing, slower growth and policy traps in the coming quarters
To read the article by the economist Andy Xie, please click the link below:
http://english.caing.com/2011-05-06/100256416.html
*******************
Chimerica's Slippery Slope to Stagflation
Watch for more Fed quantitative easing, slower growth and policy traps in the coming quarters
To read the article by the economist Andy Xie, please click the link below:
http://english.caing.com/2011-05-06/100256416.html
*******************
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