Mining Report: New Money Vs. Knitted Cardigans

1 mins. to read
Mining Report: New Money Vs. Knitted Cardigans
Tungsten ... 455 Per Cent IRR

LONDON: Shares in Sirius Minerals have gone into free-fall in London, opening 9 per cent lower in early trading on Wednesday, down 40 per cent in a week.

The collapse is a setback for those betting on a resurgence in mining in the UK: Sirius is hoping to develop a vast open-pit potash project set in the Yorkshire Dales, but a 229-page report published by the local planning committee has failed to back the project, sending Sirius sharply lower.

The company is led by Australian executives from iron ore giant Fortescue, the largest Australian competitor to Rio Tinto and BHP Billiton. “They’ve come up against the North Yorkshire planning board and it’s very much new money versus knitted cardigans,” one source told Master Investor this morning. “It’s a clash of cultures of monumental proportions.”

Other Australian groups are also planning mines in the UK, reversing the traditional flow of mining capital from London to Australia: ASX-listed Scotgold is planning a gold mine in the Scottish Highlands, whilst Wolf Minerals is building the Drakelands tin and tungsten mine in Devon.

Industry chatter says Wolf is due to put out an announcement in the next few weeks saying that it has finished construction at Drakelands, ahead of the company’s guidance.

Firestone on the Defensive

Firestone Diamonds meanwhile fell 5 per cent in yesterday’s trading after reporting construction delays at its Liqhobong mine in Lesotho.

Rivals had predicted the delay: mining billionaire Lukas Lundin, chairman of Vancouver-based Lucara Diamond, recently told the Canadian press that he expected Liqhobong to overshoot budget, but behind the scenes, industry sources say Firestone’s cash position protects it from a hostile takeover.

The company raised $222m last year, but the steady uptick in the US dollar since has effectively swelled its cash backing by 25 to 30 per cent, versus its build costs in southern Africa.

Savannah & Rio Tinto

AIM-listed Savannah Resources is emerging as the story of the week, nearly doubling on news of a joint-venture with Rio Tinto in Mozambique. The two companies are combining their respective heavy sands tenements into one project, which will be managed by Savannah.

Upcoming: Exclusive interview with Savannah’s CEO, David Archer.

Comments (0)

Leave a Reply

Your email address will not be published. Required fields are marked *