That Was The Week That Was … In Australia

By Our Man in Oz

Minews. Good morning Oz, your market seems to have performed well in the closing stages of last week.

Oz. It was a reasonable ending after a few torrid days during which we were buffeted by the same forces which sent markets around the world on a bit of a wild ride with oil prices, interest rates and Russian belligerence producing an interesting cocktail of competing forces.

Locally, the issue watched most closely was the exchange rate with another US1.5 cents sliced off the Australian dollar during the week, taking the fall over the past 18 months to around 30 per cent, and the dollar down to US81.5.

Minews. That 30 per cent off the value of your currency is a big fall which must be having a beneficial effect on the revenue of mineral exporters.

Oz. It is starting to become a significant factor in the market, and could be the issue which helps with a widespread recovery in 2015 after a few torrid years of falling prices and profits.

Some of last week’s action on the market looks as if it could only have been caused by the currency effect flowing into equity values.

Gold stocks, always a bellwether for good and bad times, told the story with the ASX gold index holding its ground in a week when the gold price fell by around US$28 an ounce to US$1197/oz during our trading hours.

The only reasonable explanation for gold equities not falling is that is the US1.5 cent drop in the Aussie dollar turned that US$19/oz fall into a gold-price rise of A$19/oz.

Minews. Interesting, but let’s move along quickly as we’ve all got last minute Christmas shopping obligations.

Oz. Before our weekly price call a few other pertinent remarks about conditions in Australia where we appear to have another government crisis brewing, partly a result of a hung Parliament, and partly a result of inept leadership.

Minews. Don’t tell me you’re going back to your socialist days with a possible re-visit to the era of special taxes on mining and carbon emissions.

Oz. Unfortunately, that could be the case though any change is probably about 18 months away.

Minews. At least it’ll give you plenty to write about. Now for prices, starting with any particularly newsworthy moves, and then a quick trip through the sectors.

Oz. Coal, which has been a long time in the sin bin produced a few interesting winners, though not because of an upward move in coal prices. The drivers which helped Whitehaven (WHC), add A16 cents (14 per cent) to A$1.31 last week were a result of cost savings and news of the first shipment of coal from the company’s new Maules Creek mine.

OZ Minerals (OZL) staged a handsome recovery in the copper sector after big slide since the start of the year. It added A38 cents (12 per cent) to A$3.52, and BC Iron (BCI) started to dig itself out of a deep hole with a rise of A12 cents (33 per cent) to A48.5 cents.

Minews. That BC rise to looks impressive, until you look at where the stock was trading earlier in the year.

Oz. Agreed, you have to watch those percentage moves, they can be rather misleading.

As a final few words on the big picture (and percentages) the broadest measure of the ASX, the all ordinaries, rose by 3 per cent last week, with the metals and mining index not far behind with a rise of 2.5 per cent.

Minews. Prices now, starting with iron ore to see how widespread the recovery was.

Oz. BC had the best week but some of the other rises were reasonable, though certainly not spectacular. Fortescue (FMG), added A13 cents to A$2.55. Atlas (AGO) regained A1.5 cents to A15 cents. Crusader (CAS) had an excellent week with a rise of A4.5 cents to A23 cents, and Mineral Resources (MIN) bounced back after six months of heavy losses to gain A49 cents to A$7.37.

Minews. Over to gold next to get a measure of that U.S. dollar fall and A-dollar price rise.

Oz. Regis (RRL) had the best week with a rise of A15 cents to A$1.75. Other gold moves, in either direction, were modest, including: Northern Star (NST), up A10 cents to A$1.35. Doray (DRM), up A7 cents to A43 cents. Gold Road (GOR), up A1.5 cents to A24.5 cent, and Perseus (PRU), up A3 cents to A25 cents. Falls were posted by Troy (TRY), down A4.5 cents to A35.5 cents. Resolute (RSG), down A2 cents to A21.5 cents, and Endeavour (EVR), down A1.5 cents to A46 cents.

Minews. Copper and the other base metals next, please.

Oz. After Oz there were a number of other reasonable rises. Sandfire (SFR) put on A39 cents to A$4.60. PanAust (PNA) added A5 cents to A$1.47, and Minotaur (MEP) was A1 cent higher at A15.5 cents. Rex (RXM) had another bad week, shedding A1.4 cents to A8.5 cents, and Staveley (SVY) was A1.5 cents weaker at A23.5 cents.

Sirius (SIR) led the nickel stocks with a rise of A19 cents to A$2.56. Other moves, either way, included Panoramic (PAN), up A6 cents to A41.5 cents, and Mincor (MCR), down A2 cents to A57 cents.

Zinc stocks barely moved. Terramin (TZN) slipped two-tenths of a cent lower o A9.4 cents, and Red River (RVR) crept up by half-a-cent to A10.5 cents.

Minews. Coal, uranium and graphite next, please.

Oz. Whitehaven was the best of the local coal stocks while Atrum (ATU), one of the Aussies working Canada, put on A11 cents to A$1.06. New Hope (NHC) added A2 cents to A$2.35 while Coal of Africa (CZA) had a rough week, dropping by (2.7 cents) 50 per cent to A2.7 cents.

Uranium stocks continued to weaken. Paladin (PDN) slipped A1 cent lower to A30.5 cents. Vimy (VMY), the old Energy and Minerals (EMA) dropped a sharp A14 cents to A44.5 cents, and Berkeley (BKY) was A4 cents weaker at A27 cents.

Syrah (SYR) led the positive stocks in a mixed graphite sector, adding A31 cents to A$3.05. Talga (TLG) lost A2.5 cents to A25.5 cents, and Kibaran (KNL) was half-a-cent weaker at A12 cents.

Minews. Minor metals to close, thanks.

Oz. Titanium minerals picked up after a heavy bout of selling, led by Base (BSE) which reclaimed A3.5 cents to A20 cents.

Lynas (LYC) finally had a good week, adding A1.5 cents to A6 cents, though that price is country mile from where the rare earth leader once traded.

Lucapa (LOM) gained A4.5 cents to A31 cents after reporting more good news from its diamond project in Angola.

Minews. Thanks Oz.