Stock Market Trading > Gold Mines in Africa

Gold on firm footing

Gold remained on a firm footing in afternoon trade on Monday due to renewed buying interest in precious metals.  At 3.30pm, gold was quoted at $563.65/oz — $4.77/oz or 0.85 percent higher than its previous close. The precious metal ranged between a low of $558.20/oz and a high if $564.70/oz so far during the session.  “Precious metals are pushing higher,” London-based Barclays Capital Yingxi Yu wrote in a daily precious metals briefing, noting that this was a continuation of good performance seen last week.

The spot price on Friday advanced more than $10/oz and broke above the $560/oz mark for the first time in more than two weeks as gold played catch-up to gains in the price of silver and oil. Yu cited sufficient buying interest as a factor that helped gold breach the $560/oz mark, adding that the weaker dollar coupled with higher oil prices were positive factors helping sentiment on the day. “Also, our forex strategists highlight that speculators are at their longest US dollar positions versus both the euro and the yen since December 2005, hence making the US dollar susceptible to any negative information,” she added, alluding to the fact that Tuesday’s FOMC statement in the US was expected to be dovish.

This, Yu explained, would be negative for the dollar and theoretically positive for gold. At 3.30pm, platinum was slightly off its intra-day best trading at $1068.50/oz versus its previous close of $1047/oz. It ranged between $1044/oz and $1070.50/oz so far during the session. Palladium was last quoted at its intra-day best of $338/oz, $7.50/oz or 2.27 percent higher than its previous close.It was the first time the metal had traded at this level since September 2002. “Platinum and palladium are surging higher on a fresh bout of buying interest, fixing at $1059 and $333 (respectively) this morning. In the week to last Tuesday, tactical investors increased their net position in platinum mainly on fresh buying, while that in palladium was increased on a combination of fresh buying and short covering,” Yu explained.

Steam distilled water supplier Refresh Group Ltd made a sparkling debut on the Australian Stock Exchange and is already targeting Kalgoorlie’s thirsty miners to grow the business.

Refresh shares hit the ASX boards at 25 cents on Wednesday before closing at 35 cents, up 75 per cent on the issue price of 20 cents under its initial public offer. The West Australian-based Refresh, which has facilities in Perth, Sydney and Melbourne, will launch new operations in Kalgoorlie and Brisbane this year. Refresh executive director Edmund Teo said the company was keen to set up a facility at Kalgoorlie to take advantage of the resources boom.

“Our water is steam distilled and which gives us a tremendous advantage over spring water because we can open up a plant in Kalgoorlie and distill it there, saving on freight costs,” Mr Teo said. “All the other bottled water companies have to cart it into Kalgoorlie and that gives us the upper hand on price and cost.” He said a Brisbane facility will give Refresh greater access to the markets in the eastern states.

Refresh raised $2.5 million through the issue of 15 million shares attracting 507 new shareholders in the prospectus. “The majority are mums and dads but there were a handful of superannuation funds that came in,” Mr Teo said. Before listing Refresh made a number of acquisitions including the Moores brand of bottled water which is sold in supermarkets in NSW and Queensland, and super-oxygenated pure water brand Oxyfresh.

“We have some exciting plans for the future but after the listing today we need to catch our breath,” Mr Teo said. In addition to water products, Refresh provides contract bottling services to a number of organisations, including the WA Water Corporation, and distributes the Durastill and Precision brands of distillation systems.

LINK: http://www.refreshwater.com.au

The Company’s origins date back to 1962 when the Totalisator Administration Board of Queensland (Board) was established as a statutory authority to conduct off-course totalisator betting in Queensland. The Board became corporatised on 1 July 1999 as a Government-owned entity.

In November 1999 UNiTAB (then known as TAB Queensland Limited) listed on the Australian Stock Exchange Limited by a public float. At the time of listing UNiTAB held licences to conduct racing and sports wagering in Queensland and also licences to provide monitoring and value-added services for gaming machines in Queensland.

On 29 June 2000 UNiTAB (via a wholly-owned subsidiary) purchased the Northern Territory TAB from the Northern Territory Government. On 1 July 2001 UNiTAB (via a wholly-owned subsidiary) was granted the licence in the Northern Territory to provide gaming machine monitoring services throughout the Territory. This was followed by the acquisition of the South Australian TAB from the South Australian Government on 14 January 2002. On 1 January 2005 UNiTAB acquired licences in New South Wales to provide gaming machine monitoring services to the 100,000 gaming machines in that State and also to provide statewide linked jackpots to New South Wales gaming venues.

LINK http://www.unitab.com.au/

Newcrest Mining Limited was formed in 1990 from the merger of Newmont Australia Limited and BHP Gold Limited. Newcrest and its predecessors have a strong history of successfully exploring, developing and operating gold mines, predominately in Australia.

Newcrest’s predecessor, Newmont Australia Limited was established in Australia in 1966 with “a philosophy that high standards of scientific exploration and professional mine development and management were the tried and proven avenue to the creation of shareholders wealth”. It is this philosophy that has continued to foster the creation of a strong, independent and growing resources group that is characterised by Newcrest today.

LINK http://www.newcrest.com.au/

Australian Gold Mining Stocks Rise, Led by Newcrest and Oxiana
March 28 (Bloomberg) — Australian gold mining stocks such as Newcrest Mining Ltd. rose as the precious metal climbed to the highest in three weeks and copper reached a record.

Unitab Ltd. slipped as three brokerages cut their rating on its stock after it surged yesterday following a A$1.9 billion ($1.3 billion) takeover offer from Tattersall’s Ltd. The S&P/ASX 200 Index was little changed, falling 2.3, or 0.1 percent, to 5085.8 at the 4:15 p.m. close in Sydney. About five stocks dropped for every four that gained. A lot of share prices are looking pretty rich at these levels, so investors are sticking with the old favorites like the miners,'’ said Jason Teh, who helps manage the equivalent of $4.1 billion at Investors Mutual Ltd. in Sydney.

Newcrest, Australia’s biggest gold miner, jumped A$1.48, or 7.1 percent, to A$22.32. Oxiana Ltd., the nation’s second biggest gold miner, rose 5 cents, or 2.1 percent, to A$2.49. Both companies also mine copper. Gold climbed 1.2 percent to $567.40 an ounce in New York yesterday, the highest since March 3, extending a 1.8 percent gain March 24. Gold’s 3.5 percent gain in the past two weeks had lagged behind other metals. Copper surged to records on speculation global economic growth will reduce inventories and trigger supply shortfalls.

ASX to buy SFE

SYDNEY: The Australian Stock Exchange (ASX) said it would buy the Sydney Futures Exchange (SFE) for A$2.4bil in stock to boost revenues as its own growth starts to slow. Shares in futures exchange operator SFE Corp Ltd jumped 27% to a record while shares of the ASX rose 8%. The price moves lifted the market value of the combined entity to A$6bil, just ahead of the Nasdaq Stock Market Inc.

“This is a strategic and a logical move, something which the market has been speculating on for a while now,” said Troy Angus, a portfolio manager with BT Financial Group, which manages about A$10bil in Australian shares. “But valuations are fairly full for both the stocks, and any share price gains will depend on the synergies that can be achieved.” At yesterday’s close, ASX traded at 27.5 times June 2006 forecast earnings per share and the bid values SFE at 31.1, both more than double the ratio seen across Australia’s benchmark S&P ASX 200 Index, based on the Reuters data.

Listed stock exchanges have enjoyed hefty premiums as a wave of mergers and acquisitions sweep global bourses. The London Stock Exchange Plc, which trades at 33 times projected earnings, has rejected a US$4.2bil offer from Nasdaq. ASX is offering 0.51 of its shares for each SFE share, valuing SFE at A$17.95 a share, or A$2.4bil, based on the closing share prices.  ASX shares hit a two-month closing peak of A$35.20 while SFE shares jumped 27% to A$17.95. – Reuters 

Toro Energy Ltd exploded onto the stock exchange on Friday, boosting the value of the uranium explorer’s tradeable shares by $40 million and blowing away and doubts about investor hunger for yellowcake stocks. The company, which was formed by the spin off of the South Australian uranium assets of Oxiana and Minotaur Exploration, began trading 244 per cent above its 25 cent initial public offer price. Toro opened at 86 cents, up 61 cents, and ended the day at 80.5 cents, up 55.5 cent or 222 per cent. The first day of trading saw the share market value of the new shares rise to $57.96 million, from $18 million, in strong turnover of 21.09 million shares. Chief executive Greg Hall watched the shares shoot through the roof on the big board at the Australian Stock Exchange in Adelaide and said it was a “good beginning.”

“But we certainly have a lot of hard yards to do in the future,” he added. “Toro is in the business for the long term and we have a lot of good support from our major shareholders Oxiana and Minotaur, we have good ground to cover and we really have a future where we want to be a preeminent explorer.” Brokers were effusive about the float. “It’s one of the best one’s I have seen for a long time,” said Ric Klusman of Aeques Securities. The company had offered 72 million shares at 25 cents each to raise $18 million and got an overwhelming response with applications for $63 million worth of stock, three and a half times more than was available. The strong demand meant almost no shares were allocated outside the priority offer. Oxiana and Minotaur both hold escrowed stakes of 24.7 per cent each in the new company equating to another 73.5 million shares.

That means the pair reaped a paper profit of $40.79 million after Friday’s trading as their combined stakes rose in value to $59.17 million. Toro is the latest in a steady stream of yellowcake floats to hit the market in the last 12 months as investors have looked to cash in on growing demand for uranium and renewed debate about nuclear power. Mr Hall said the entry of so many new juniors into the uranium game had set the sector up for consolidation and Toro would be on the look out for quality uranium acquisitions to fuel its growth.

All the new uranium explorers face the hurdle of federal Labor’s three mines policy which, with Labor in every state and territory, effectively prevents the opening of new mines. But analysts say that, with demand for uranium rising, investors are banking on Labor changing its policy or the Commonwealth overriding the states.

Toro has 26,000 square kilometres of exploration tenements in the Gawler and Curnamona Cratons in South Australia that it says contain well documented uranium occurrences thanks to initial work by Oxiana and Minotaur. The relationship with Minotaur is already paying off for the new company, with a drill rig being made available for exploration work to begin at its Yaninee project on the northwest Eyre Peninsula next week.

LINK http://www.toroenergy.com.au/

Australian Mining Stocks Gain, Led by BHP; Amcor, Goodman Drop. Australian resources stocks climbed, led by BHP Billiton and Rio Tinto Group, after copper prices rose to a record and both companies said demand for commodities such as coal remains  very strong. Stocks including Goodman Fielder Ltd. and Amcor Ltd. fell after analysts cut their ratings.

The S&P/ASX 200 Index added 4.8, or 0.1 percent, to 5040.1 at the 4:15 p.m. close in Sydney. Ninety-four stocks fell and 78 advanced. The index rose 1.4 percent this week. New Zealand’s NZX 50 Index gained 0.3 percent to 3580.79 at the 5 p.m. close in Wellington.

Gold explorer Terrain Minerals Ltd has made a solid debut on the stock market with its shares ending their first day of trading 15 per cent above the issue price.

The Perth-based company issued 25 million shares at 20 cents each to raise $5 million which it plans to plough back into exploration work at its four key tenements on the eastern goldfields of Western Australia. Terrain shares first traded at 1330 AEDT at 24 cents and by close of market they were three cents higher than the issue price at 23 cents. Chief executive Keith Wells said the company felt pretty good about the stock’s performance, which came on a day when most gold stocks lost ground as the gold price fell. Mr Wells said Terrain now planned to spend $2.7 million on its exploration program over the next two years with drill testing to be carried out at each site within 12 months, starting next week at its Celtic project 60 kilometres north of Leonora.

The company already has a gold resource of 219,000 ounces and its resources remain open, raising the prospect they could be extended. “The ore position is there to mine right now but that would mine a few thousand tonnes,” he said. “What we want to do is develop it so we can mine a few million tonnes.” Mr Wells said the company’s strategy had been to acquire tenements where there were drill ready targets so they could spend the money they raised, “finding out how much gold we had, not whether we had any gold at all”.

AAP

Recent speculation of higher iron ore benchmark prices helped the miners, with BHP Billiton up another 39¢ at $25.57 and Rio Tinto climbing $1.35 to close at $74.34. Energy stocks were mixed, with Woodside Petroleum surging 60¢ to $43.60, Santos picking up 9¢ to $11.33 and Oil Search dropping 2¢ to $3.98. The big banks rallied in the afternoon, with ANZ picking up 22¢ to $26.27, Commonwealth gaining 15¢ to $44.70, National Australia Bank lifting 42¢ to $36.97 and Westpac rising 4¢ to $24.07.

Among other financials, Macquarie Bank picked up 41¢ to $61.90 and St George found 10¢ to $29.50. Building industrial James Hardie lost 14¢ after hearing the Tax Office had a $412 million tax bill for it. Shares in another building industrial, Rinker Group, also finished weaker, losing 30¢ to $19 after it said it faced environmental problems at a project in Florida.

Shares in retailer Colorado Group shuffled 3¢ lower to $3.55 after posting a 19.13 per cent drop in annual net profit to $35.36 million. Media stocks were mixed, with Publishing and Broadcasting Ltd 9¢ higher at $17.98, Fairfax 2¢ lower at $4.03 and News Corp’s non-voting shares piling on 19¢ to $23.09, with the non-voting scrip up 7¢ at $24.35. Telstra clawed back another cent to $3.70 while Optus parent SingTel firmed 2¢ to $2.29. The spot price of gold fell $US2.73 an ounce to $US550.12 an ounce. Newcrest shed 20¢ to $20.80 and Newmont lost 9¢ to $6.68.