That Was The Week That Was … In Australia

By Our Man in Oz

Minews. Good morning Australia, apart from gold your market looks to have had an awfully flat week.

Oz. That’s a fair reaction if you look only at the indices. Cast your eyes a bit further and there was quite a bit of interesting activity on the market and at the annual Hong Kong Mines and Money conference.

Minews. We’ll get to Hong Kong and the individual moves later, for now let’s wrap up the big picture as this might be your last weekly report.

Oz. Yes, it’s been fun chatting over the past few years but change is always a good thing. Anyway, sticking to the plan for this final call, the overall Australian market last week was modestly weaker with the all ordinaries down by less than one per cent. The metals and mining index was up by an infinitesimal 0.2 per cent, while the gold index did best with a rise of 4.3 per cent.

Minews. We’ll lead off our call of the card with gold but first let’s learn about any eye-catching individual movers.

Oz. Before that it’s worth a comment on the Hong Kong conference which was smaller than last year but with a mildly better mood evident.

Some of the regular speakers said some of their regular things with Robert Friedland again saying that the worst of the commodity crash is over. Hopefully he’s right this time.

However, the most interesting discussion was about the level of private equity on the sidelines waiting for the right time to move into the mining market.

Bloomberg Intelligence head of global metals and mining research, Ken Hoffman, told the conference that there is US$60 billion poised to make a move, a claim that Denham Capital’s Bert Koth, dismissed as fanciful with a comment that it could be another two years before the market touches the bottom.

Minews. Sobering stuff from Bert. Now for prices, please.

Oz. As hinted earlier we had a few moves that were much more interesting than the dreary conditions implied by the flat mining index.

Kibaran Resources (KNL) was one of the best with a strong rise of A7.5 cents (52 per cent) to A22 cents after announcing a potential financing deal for its Epanko graphite project in Tanzania.

Triton (TON), another emerging graphite stock, was also in demand with a rise of A8.5 cents (34 per cent) to A33.5 cents. That latest uplift means that the stock has risen by A22 cents (163 per cent) in two weeks.

Yancoal (YAL), one of the local coalminers closely-linked to Hong Kong’s Noble commodity-trading business, had a curiously excellent week, adding A2.6 cents (71 per cent) to A7 cents, a rise which smells of corporate activity rather than a coal-price rally.

Highfield (HFR), the fertiliser stock which has won a lot of air time down this way, continued its remarkable rise, adding another A19 cents (16.6 per cent) to A$1.37.

Australian Bauxite (ABX), one of the emerging exporters of the ore of aluminium, revealed an initial resource for one of its potential Tasmania projects, news which lifted the stock by A9 cents (33 per cent) to A36 cents.

Iluka (ILU) led a stronger titanium sands sector, perhaps thanks to reports of increased Chinese imports of titanium and zircon. It added A83 cents (11 per cent) to A$8.19. Another titanium minerals producer, Mineral Deposits (MDL) did a little better on a percentage basis, adding A10 cents (15.5 per cent) to A74.5 cents.

Windward (WIN), one of the more active nickel explorers in the Fraser Range region of Western Australia, had another good week with a rise of A6.5 cents (18.5 per cent) to A40.5 cents.

Minews. Time to call the card now, please, starting with gold.

Oz. The higher gold price helped lift most gold stocks, though the local mood was dampened by a rise in the Australian dollar which muffled the local gold-price.

Evolution (EVN) was a solid upward mover, with a rise of A8 cents to A84 cents after confirming that it is in talks to buy the La Mancha goldmine in Western Australia.

Other gold moves, mainly up, included: Metals X (MLX), up A8.5 cents to A$1.22, Regis (RRL), up A10 cents to A$1.35, Troy (TRY), up A4.5 cents to A50.5 cents, Gold Road (GOR), up A2.5 cents to A37 cents, and Medusa (MML), up A8 cents to A90 cents.

Northern Star (NST) ran out of puff after a strong run in the previous week, shedding A6 cents to A$2.32. And a long list of gold stocks lost just half-a-cent each, including: Endeavour (EVR), Beadell (BDR) and Kingsrose (KRM) which closed, respectively, at A60 cents, A26.5 cents, and A23.5 cents.

Minews. The base metals next, starting with copper, please.

Oz. It really doesn’t matter where we start as there wasn’t a lot of movement in any of the base metals.

Best of the copper stocks were Sandfire (SFR), up A10 cents to A$4.30, PanAust (PNA), up A7 cents to A$1.22, and OZ (OZL), up A6 cents to A$3.87.

Windward, mentioned earlier, was the best of the nickel stocks. Sirius (SIR), a close relation to Windward, added A4 cents to A$2.89. Other moves, all small, included Mincor (MCR), up A1 cent to A68.5 cents, and Poseidon (POS), up half-a-cent to A12 cents.

Red River (RVR) was the best of the zinc stocks with a rise of A1.5 cents to A15 cents. Aurelia (AMI) added A1 cent to A27.5 cents, while Energia (EMX) slipped four-tenths of a cent lower to A4.8 cents.

Minews. Over to iron ore now, please.

Oz. Fortescue (FMG) was the newsmaker, but not the price mover, among the iron ore stocks last week. It opened and closed at A$2.00, amid a storm of comment about a suggestion from its chairman, Andrew Forrest, that all iron ore miners band together to cut production.

Most other iron ore stocks were also close to a standstill. Atlas (AGO) and Mt Gibson (MGX) both added half-a-cent to A14.5 cents and A22 cents respectively.

Minews. Uranium, graphite and coal next, please.

Oz. We’ll call graphite first because those strong moves mentioned earlier by Kibaran and Triton ought to have underwritten a strong sector, which actually wasn’t the case. Most other graphite moves were down, including Syrah (SYR), down A34 cents to A$3.68 and Valence (VXL), down A3 cents to A36.5 cents.

Paladin (PDN) did best among the uranium stocks with a rise of A2.5 cents to A39.5 cents. Vimy (VMY) lost some of its recently gained ground with a fall of A2 cents to A35.5 cents.

Coal stocks, as seen in Yancoal’s rise, were stronger thanks to the higher oil price. Whitehaven (WHC) added A5 cents to A$1.47 and New Hope (NHC) put on A5 cents to A$2.50 after a comment from management that it was looking for acquisition opportunities, which is a first for the coal sector in a while.

Minews. Minor metals to close, thanks.

Oz. The titanium, bauxite and fertiliser stocks we discussed earlier were the pick of the minor metals.

Wolf (WLF) the emerging British tungsten producer added A1.5 cents to A40 cents.

Alkane (ALK), one of the leading rare earth hopefuls, fell by A4 cents to A30 cents.

Minews. Thanks Oz for many years of reliable service.