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"Uranium 2011: Resources, Production and Demand", commonly referred to as the "Red Book", shows that total identified uranium resources have grown 12.5% since 2008. However, the costs of production have also increased, leading to reductions in lower cost category resources. These figures, which reflect the situation as of 1 January 2011, mean that total identified resources are sufficient for over 100 years of supply based on current requirements.

http://www.iaea.org/newscenter/pressreleases/2012/prn201219.html
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July 28, 2012
That Was The Week That Was … In Australia
By Our Man in Oz

Minews. Good morning Australia. It looks we’ve both had an interesting end to the week, you with a discovery, and London with the start of its Olympic party.

Oz. And what a start you’ve had with that astonishing opening ceremony. All we could manage down this way was a nickel and copper strike in an attempt to spark some life into what was really another fairly flat trading week. The all ordinaries and metals indices barely moved despite the Friday uplift which barely cancelled out the other four down days. Gold stocks did best overall, with the gold index rising by three per cent, following a solid rise in the price of bullion.

Minews. Tell us more about the discovery.

Oz. Sirius Resources (SIR) was the centre of attention as it rocketed up by a jaw-dropping 890 per cent in just 48 hours after reporting ore-grade assays from the its 70 per cent-owned Nova project in the Fraser Range near the south coast of Western Australia.

Much more work is required at the discovery site, but last week’s drill results drove the shares from A5.7 cents to a closing price on Friday of A56.5 cents. The shares even got as high as A63.5 cents in early Friday trade.

Two factors caught the eye of investors. First were the assays themselves, which included four metres at 3.8% nickel, plus 1.4% copper from a depth of 191 metres. Second was the potential importance of the discovery, as it could validate a theory that the largely unexplored Fraser Range will become a new mineral province, albeit one currently hidden by thick beds of wind-driven sand.

Minews. It sounds impressive, but is it really that good?

Oz. Now, that’s an interesting question, because there are some observers who wonder whether the market got somewhat over-excited about what is undoubtedly a very encouraging drill hit, but one that is relatively deep and in a very remote location. In theory, Nova could mark the start of opening a new mineralised province, but it could also turn out to be a one-hole wonder.

Still, the management at Sirius is certainly optimistic, and believes it has the tools to find a substantial deposit of nickel, copper, and possibly gold. There is also the added bonus that the man behind much of the current work at Fraser Range has a track record of discovery, and a pile of money to fund his exploration work.

Mark Creasy, the British-born prospector, who made his first fortune by selling the Bronzewing gold discovery some 20 years ago, has a 30 per cent personal stake in the Nova discovery and its surrounding package of tenements. Mark is convinced that the region will eventually yield major orebodies because it lies at the junction of two colliding geological structures.
...

Source >> www.minesite.com
*****
 
July 30, 2012
Was Last Week Good Or Bad For Metals?
By Rob Davies

Was last week good or bad for metals? On the face of it a 3.5 per cent fall in the LME base metals index to 3160.2 doesn’t look encouraging. Copper led the way with a 3.3 per cent drop to US$7,510 a tonne but, rather confusingly, inventories of copper in LME warehouses also fell.

True, the decline modest at only 2,650 tonnes, taking the total down to 249,900 tonnes. But that is an astonishingly low figure compared to the 1,006,475 tonnes of surplus zinc sitting in the same warehouses.

On top of that copper in Shanghai warehouses also declined and now stand at just 156,510 tonnes.

Even if the Chinese are sitting on a lot of unreported metal the outward signs are that the markets remain tight. The premium for cash metal also underscores that.

But those seeking evidence to support a bearish point of view can also point to the iron ore market where spot prices reached a 31 month low of US$116 a tonne. Bloomberg says this key industrial commodity may only average US$135 a tonne for the third quarter.

Here again though, there are conflicting signals.

In its interim results last week Anglo American admitted that its new iron ore mine in Brazil is suffering from more delays and that first production has been pushed back another year to 2014. It has yet to reveal what the revised capital cost is. The current estimate of US$5.8 billion is clearly way too low.

Anglo blamed bureaucratic and regulatory problems for the delay, but stopped short of accusing Brazil of frustrating it in order to assist its home grown miner.

Given the slowdown of steel production in China, the major market for internationally traded iron ore, it would be understandable for the Brazilian government to do what it could to help Vale.

Still, whether the 1.7 per cent fall in Chinese steel production in June relative to May is significant is hard to say at the moment. And what the implications are for steel output in two years time is beyond the wit of any analyst.

All we know is that still takes a long time and a lot of money to add capacity.

At the moment the mood music in capital markets is universally bearish, and it is hard to find anyone prepared to put their head above the parapet and say something positive. Because in such an environment anyone brave enough to do so is likely to get it blown to smithereens.

However, there is a ray of hope.

If everyone is so negative the rewards for taking a positive stance could be enormous. The tone in Europe is so bearish that no one can contemplate any good outcomes.

But it is perfectly possible that a small crack in the edifice of the euro, perhaps caused by a large country leaving or defaulting, would actually trigger a massive rally in risk assets.

Most people understand, deep down, that many of these large countries will never repay the debts they have incurred as a result of the bank crisis.

However, the pretence that they eventually will is constraining activity in every sector, as bank lending is constrained. Once reality is accepted, and assets are written down to realistic levels, there is a good chance distressed sales of property and other assets will trigger the mother and father of all recoveries.

It just needs the Germans to realise they won’t be getting their money back. And that may take a while. And in the intervening time, the message of negativity in Europe will be the hardest signal of all to interpret.

Source >>> www.minesite.com
*****
 
August 04, 2012
That Was The Week That Was … In Australia
By Our Man in Oz


...

Minews. Over to the fuels, coal and uranium, please.

Oz. Whitehaven, as mentioned, continues to worry investors because of the huge gap between a promised bid price and its sagging share price. The rest of the coal sector was mixed, trending down. Movers included: Coal of Africa (CZA), down A7.5 cents to A35 cents, Continental Coal (CCC), down A1 cent to A7.7 cents, Bandanna (BND), up A5 cents to A37.5 cents, Stanmore (SMR), up A1 cent to A36 cents, and Guildford (GUF), down A6 cents to A6 cents to A31 cents.

In uranium it was one up, and the rest down or flat. Toro (TOE) was the only explorer to swim against the tide. It added half a cent to A7.1 cents. Other movers and non-movers included: Uranex (UNX), down A1.5 cents to A10 cent, Greenland (GGG), down A1.5 cents to A40 cents, Bannerman (BMN), down A1.1 cents to A9.9 cents, Paladin (PDN), steady at A$1.16, and Manhattan (MHC), also steady at A18 cents.

Minews. Minor metals to close, thanks.

Oz. There were three reasonable rises among the minor-metal companies. Rare earths developer, Alkane, as mentioned earlier, rose A16 cents to A99 cents. Tin explorer Venture (VMS) caught the eye of investors with more discovery news from its Tasmanian operations, adding A10 cents to A37 cents, and Montezuma (MZM), one of the graphite hopefuls, put on A4 cents to A24 cents.

Elsewhere, Atlantic (ATI), the vanadium developer, fell A7 cents to A40 cents, rare earths specialist Lynas (LYC) rose A3.5 cents to A78.5 cents, and manganese miner OM Holdings (OMH) rose A1.5 cents to A41.5 cents.

The lithium project developers, Galaxy (GXY) and Orocobre (ORE), went in opposite directions. Galaxy added A3.5 cents to A50 cents, and Orocobre lost A12 cents to A$1.57.

Minews. Thanks Oz.

Source >> www.minesite.com
*****
 
Finviz.com (Financial visualizations)

Finviz works only with stocks listed in the american stock exchanges

Here is a list of the australian stocks:

Alumina AWC
BHP Billiton BHP
Genetic Technologies GENE
James Hardie Industries JHX
Lihir Gold LIHR
Novogen NVGN
Prana Biotechnology PRAN
Samson Oil and Gas SSN
Sims Metal Management SMS
Westpac Banking WBK

*****
 
August 06, 2012
Mario Draghi’s Game Of Euro-Poker Is Having A Far Greater Effect On Metals Prices
Than The Mechanics Of Supply And Demand
By Rob Davies


It was another mixed week in capital markets, and the fact that it was so mixed can be blamed almost entirely on Mario Draghi, the President of the European Central bank.
Not much more than a week ago, he said the ECB would do whatever it takes to defend the euro, even though with more than 10.4 per cent of Europeans without jobs the reasons for defending it are highly questionable.

Nevertheless, when he said it the markets reacted to this assertion with euphoria and rallied strongly. But a week later he qualified his statement somewhat, and the markets blew a large raspberry.

These gyrations, driven by investors trying to second guess what will happen next are far more important to the world of mining and metals than the internal mechanics of supply and demand. The two per cent fall in the LME index to 3094.8 last week was more influenced by attempts to interpret the ECB statements than news from the industry.

That said, BHP Billiton’s statement that it was taking a US$430m charge against the value of its Australian nickel assets did help to push nickel prices down US$335 a tonne to US$15,590, even though the move is constructive for the long term.

An early recognition that some operations are not viable will help stabilise key metal prices over the economic cycle. But these actions don’t have the power to move markets in the way that pronouncements from the great and the good do.

It is though, increasingly clear that Draghi is simply playing a very large game of poker, with other people’s money, to defend the indefensible. Every rational person knows the euro needs to change drastically even if total failure does not occur.

The question other market operators have to figure out is how they can cope with and survive an event that seems certain to happen but which no one at a senior political level seems to be planning for.

Instead, it’s down to the individuals. One such is International Airlines Group, the owner of both British Airways and Iberia, which admitted last week that it has put measures in place to deal with a breakup.

IAG, and almost certainly every other international corporation, recognises that at some point Mr Draghi’s bluff will be called. And when that happens, the world will watch with bated breath to see if the Germans really will stand behind him and give him the ammunition he needs to back up his brave assertions.

While Angela Merkel might be keen to help, there seems less assurance that Jens Weidman, President of the Bundesbank, will be so obliging.

And what no one really knows are the consequences of the markets calling the bluff of the ECB, and winning. Bond markets think German bunds are the safest place to be and are prepared to buy them on a yield of 1.45 per cent.

Next safest are US and UK debt at 1.56 per cent. Equities are viewed as the most dangerous place to put your money which is why they yield four per cent.

Commodities are harder to value as they don’t provide an income, just protection against inflation. Right now inflation is relatively low, and falling, so this defence mechanism is not in demand.

Believers in the Efficient Market Hypothesis would argue that these prices are all correct because the market is the ultimate repository of all knowledge. That is fine, if you think the market thinks Mr Draghi is not bluffing.

It is harder to accept that if you believe the markets think he is bluffing.

However, once everyone believes the market thinks he is bluffing, and Mr Draghi is forced to show his cards, the poker game is over. And that is when we really will see if the prevailing prices in the capital markets are correct, or not.


Source >> www.minesite.com
*****
 
August 11, 2012
That Was The Week That Was … In Canada <<<
By Our Canadian Correspondent

Minews. Now, over to our Canadian Correspondent for a look at how the Canadian markets performed over the past week.

CC. It was hard to focus on the financial markets with the excitement of the London Olympics taking hold. By all accounts, word from this side of the pond indicates a roaring success. That said, the tail end of the second quarter earnings parade and a bevy of corporate deals did keep traders at least partially locked onto their computer screens. Once all the trading was done the TSX Ventures Exchange, home to more junior exploration companies than anywhere else in the world, had managed to tack on a modest 0.34 of a per cent, while the TSX Gold Index had fared much better, having added 3.58 per cent.
...

Source: www.minesite.com
 
August 11, 2012
That Was The Week That Was … In Australia
By Our Man in Oz

Minews. Good morning Australia. It looks like a rare good week all-round, with markets up, your Diggers & Dealers forum in full cry, and the Olympics keeping London happy.

Oz. It was a welcome break from the unpleasant period of everything falling, but I don’t think we’re out of the woods yet. News out of China after we closed on Friday remained fairly grim as iron ore and coal prices continue to fall, and the base metals show no sign of picking up. Nickel will be the one to watch because at its current level of around US$6.90 a pound there can’t be many nickel miners making money.


Minews. If that’s the case why was your nickel sector so strong last week?

Oz. Now that’s a really interesting question because we did see several nickel companies perform very well. The only answer seems to be that there was so much excitement about the Nova nickel-copper discovery of Sirius Resources that some investors decided to overlook the depressed metal price, and the discount on top of that which came as the Aussie dollar rose back over US$1.05, shrinking the local nickel price to around A$6.60/lb.

Last week, as nickel tumbled to its lowest level for three years, Western Areas (WSA), one of the local leaders, added A50 cents to its share price, which closed on Friday at A$5.00. Independence Group (IGO) was just as strong, rising by A26 cents to A$3.30, although no doubt aided by its exposure to gold. And Panoramic (PAN) and Mincor (MCR) were both better off too. Panoramic added A2 cents to A57 cents and Mincor also rose A2 cents to A67 cents.

Sirius, the company which started the current nickel stampede, crept A4 cents higher to A90 cents, but did hit an all-time high of A99 cents on Monday. But companies with exploration interests close to Nova failed to make much headway. Sheffield (SFX) crept up by half-a-cent to A40.5 cents. Buxton (BUX) added A1 cent to A17.5 cents, and Matsa (MAT) slipped A3 cents lower to A22.5 cents.

Minews. If I remember correctly, nickel is seen as an early-warning indicator in the Australian market.

Oz. You do remember correctly, and that’s why we started this week’s report with the nickel companies because they, for whatever reason, are often first to rise, and first to fall in our base metal cycle. Whether that’s happening this time, given the slowdown in the Chinese steel industry, which is the biggest consumer of nickel, remains to be seen.
...

Source >> www.minesite.com
 
August 13, 2012
This Recession Won’t Last Forever, No Matter What The Papers Say
By Rob Davies

Most booms are described as unsustainable. By their very nature they are ephemeral. What fewer people realise is that recessions are also short lived, though to be sure this one is certainly turning out to be one of the longest on record.

Last week is regarded as the fifth anniversary of the start of the recession.

The event that marked the beginning according to the standard view was the suspension by BNP Paribas of trading in two of its money market funds because of “the complete evaporation of liquidity in certain market segments of the US securitisation market”.

The statement heralded the end of the subprime refinancing boom in the US and a collapse of a source of a vast amount of funding for the global economy.

However, it did take a while for the bad news to feed through into other asset classes. Base metal prices, as measured by the LME index did not peak until March 2008, at 4,300 and the major mining companies carried on rising for another few months as BHP Billiton pursued its bid for Rio Tinto.

After that the decline in metal prices was fast and furious as the index dropped like a stone to 1,600 in the first quarter of 2009.

But thereafter the rebound was solid and steady as the industry realised that China was now for more important as a consumer than the West and that China was hoovering up metal to use in its development programme.

In fact the base metals recession lasted barely 18 months. The rebound gathered pace and the index carried on rising until it surpassed its previous peak in the second quarter of 2011 at nearly 4,500.

Since then it has gradually declined to the current level of 3,187, as it is evident that growth is slowing in China and that this slower growth has not been augmented by a return to growth in Europe and that US economic activity remains anaemic.

The roller coaster ride undertaken by the index does not fully reflect the actual experience of the mining industries because industrial commodities like iron ore and coal have had a much better price history than base metals.

It is only now, as these prices too fall back, that the major miners are starting to feel the effects. To put these developments in context it is always helpful to refer to the Rio Tinto Economic Outlook and Commodity Price presentation that accompanies its interim results.

This time round Rio’s Economic Outlook makes many insightful comments. First, it makes the point that the recovery in US housing is still underway. Even though the subprime financing issue is no longer live, there is, and will probably always be, an underlying demand for more and better housing. Human nature always seeks to improve its lot.

The same argument applies in China. Rio Tinto points out that metal demand increases with rising income. Even though Rio expects Chinese growth to slip back to an annual growth rate of six per cent, it points out that Chinese income per capita in 2011 was still less than US$10,000.

Contrast that with current global income per head of about US$12,000 and the scope for additional commodity consumption is clear. Even after the Chinese consumption boom of the last decade, the average per capita consumption of steel there is just four tonnes a year. In South Korea over the same period it has been over three times that.

A major driver for the Chinese consumption boom has been, and will continue to be, the migration of the Chinese population from the country to the cities. That transition alone increases steel consumption per head up 10 or 15 times. And half the Chinese population is still rural.

It is this drive to improve living conditions that underlies economic growth and ensures that recessions are the exception rather than the rule. They are unsustainable whatever the papers might say and that is what investors need to remember.

Source >>> www.minesite.com
*****
 
August 18, 2012
That Was The Week That Was ... In Australia
By Our Man in Oz

...

Minews. Upward moves like those must be building confidence across the small end of the market.

Oz. They are, but there is equally no doubt that there are significant imbalances and disconnections in the market. No-one, for example, has been able to explain why nickel stocks are performing so strongly while the nickel price remains stuck at US$7.00 a pound, and no-one has been able to explain the utterly astonishing discrepancy between valuations on European and Australian banks.

Minews. We don’t normally discuss banks, but you have a point to make I assume?

Oz. The point lies in a graph generated by Bank of America Merrill Lynch during the week, which showed that the stock market value of Australia’s modest banking sector is now greater than the stock market value of the entire Eurozone banking sector. That, to put it mildly, is a nonsense when you consider that Australia is a country of 22 million people as against the Eurozone’s 300 million. But it is a strong pointer to the relative health of the Australian banks, and the size of the crisis yet to be played out in Europe.

Minews. Perhaps you’re right, but in the short-term prices are rising.

Oz. For how long is the question. And what happens after the next injection of artificial cash?

...

Source >>> www.minesite.com
 
August 20, 2012
"Holding Base Metals Will Protect From Uncertainty If And When Europe Returns To Growth"
By Rob Davies

No one rings a bell when a security or an asset class reaches a peak or a trough. Only the passage of time and the brutal truth of history can tell us what we should have done, and when.

Even so, trying to sense the potential arrival of a storm from the faint breezes on our cheeks is what the investment game is all about, difficult though it is.

August is the northern hemisphere summer and all the important people are on holiday. Markets are quiet and liquidity is low.

In this thin air it doesn’t take much of a barometric gradient to disturb the equilibrium. The question is, then, whether the moves we are seeing are the precursors of real change or mere williwaws that mean nothing.

This month is barely half done but has already seen the biggest monthly loss by the bond market since 2010.

Bloomberg points out that one major global bond index is down 0.64 per cent this month so far. In part this reflects more stress in Iberian sovereign debt, as remaining holders take advantage of the ECB’s generosity and offload more stock.

But there can be no doubting the 10.8 per cent decline in US Treasuries over the last week that has taken yields back up to 1.8 per cent.

Asset allocation is more about proportions than components. So if one asset class is down, especially if it is the biggest, then the other assets must be up, at least in relative terms.

It was therefore not surprising to see equities rally by 2.9 per cent over the week. Gold was little changed, adding just US$7.00 an ounce to $1,615.

But despite this move in favour of risk, base metals declined by 1.7 per cent over the week to leave the LME index at 3,133.5.

Whether these moves presage a deep-seated sea change in the attitude to risk by investors will not be known for months or years. While many would argue such a move is overdue there is no specific event to suggest it’s time has come.

There is of course no reason why there should be. In many cases assets fall in and out of favour for a whole host of reasons, while the underlying forces may happen to coalesce at a random point in time.

Nevertheless, there are lots of reasons to suggest that a sea change in attitudes to risk is being underway.

Bonds might preserve capital in nominal terms, but inflation makes mincemeat of them in real terms. Besides, the income from bonds these days is laughably low, unless you don’t expect to get your capital back.

Equity markets have gone nowhere for five years but dividends, the real driver of stock market returns, have now surpassed pre-crash levels and show every sign of rising steadily.

That just leaves base metals to consider as an asset class. Although they don’t generate any income they do protect against inflation.

And that sell-off in fixed income tells us inflation is now being taken seriously.

Moreover, if these moves indicate that investing for growth rather than protecting against a slow-down is more important, then base metals must have a role to play.

But of course the story is not as simple as that. A unit of growth in the West uses less metal than the same unit in emerging markets.

There is also the problem of Europe, although almost any development there should be good for growth given its current moribund state.

Asset allocation is largely about dealing with uncertainties. And holding base metals, either directly or through miners, should give more protection from those uncertainties if - surprise surprise - growth does actually return to the developed world.

Source >>> www.minesite.com
*****
 

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