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    December 19, 2009
    That Was The Week That Was In Australia

    By Our Man In Oz

    Minews. Good morning Australia, has Christmas lethargy taken over your market, like it has ours?

    Oz. It certainly has. Last week started with a big downward dip then crawled back up to end pretty much where it started, yawn! Volume fell away as the whole of Australia started packing for the beach, and you guys rugged up for a wintery blast. It is awfully incorrect to mention it but the sight of climate change activists freezing in the streets of Copenhagen caused more than few smiles down this way. On the market, all of the major indices ended roughly even for the week, except gold which retreated 2.2 per cent, an interesting move because the Australian dollar fell quite sharply against the U.S. dollar and our gold price rose modestly.

    If there is anything interesting in the broader market statistics it lies in the fact that the metals and mining index was effectively flat for the week but it was very hard to find many stocks that rose. We had a handful of stars thanks to exploration results, but the general call of the card will be a pretty dull affairs.

    Minews. Since its almost Christmas lets have the stars first, and keep the roll call short.

    Oz. Robust Resources (ROL) and Trafford Resources (TRF) were the stand-out performers in the gold sector thanks to what looks to be a spectacular gold and copper discovery in Indonesia. Robust, which has the controlling interest in the Romang Island discovery, rocketed up by A72 cents to A$1.85, while Trafford, which has a 21 per cent stake, added A25 cents to A65 cents. Best drill result, and it is an eye-catcher, was a 61 metre intersection assaying 2.54 grams of gold a tonne from the surface, plus 15 metres of 0.8 per cent copper. It is early days for exploration but Robust reported that the mineralised structure it was drilling appeared to be getting thicker and richer. Early this year Robust was trading at A21 cents and Trafford was at A10 cents.

    Resolute (RSG) and Perseus (PRU) were the only other gold stocks to stand out. Resolute staged a useful recovery after a few bad weeks, adding A14 cents to A$1.07, and Perseus continued its upward roll on the strength of its exciting Ayanfuri and Tengrela projects. Perseus closed the week at A$1.74, a gain of A16 cents for the week which means the stock has effectively doubled since August. Other stocks to rise included Ramelius (RMS), up A4 cents to A56 cents as it closed in on its takeover target, Dioro (DIO), which added A11 cents to A$1.15. OceanaGold (OGC) put on A7 cents to A$1.70 after reporting a sizeable boost to reserves at its Macraes mine in New Zealand.

    On the way down we saw Kingsgate (KCN) lose A73 cents to A$8.50. Silver Lake (SLR) lost A5 cents to A$1.04. Troy (TRY) slipped A10 cents lower to A$2.30. Dragon (DRA) lost A0.3 of a cent to A9.5 cents despite reporting high-grade gold intersections at its Svartliden mine in Sweden, and Intrepid (IAU) lost A2 cents to A30 cents after lifting the gold resource at its Tujuh Bukit project to two million ounces, which just goes to show that some people are very hard to please.

    Minews. Its that time of year, and a perhaps reason for companies to sit on their drilling results until investors return in the New Year.

    Oz. An interesting point, but one which could upset the corporate regulators. Moving on with prices there was little to report from the iron ore sector, except a fresh flurry of interest in Iron Ore Holdings (IOH) which cemented its well-flagged relationship with Rio Tinto, enough to boost the stock by A8 cents to A$1.53. All other moves were modest either way. Atlas (AGO) lost A1 cent to A$1.80. BC Iron (BCI) added A5 cents to A$1.11. Mt Gibson fell A4 cents to A$1.46, and Brockman (BRM) added A8 cents to A$2.08.

    Minews. Lets move along, uranium now please.

    Oz. It was fairly grim stuff in the uranium sector with another one-time favourite, Bannerman (BMN) upsetting its supporters a week after PepinNini (PNN) did much the same. Bannermans offending report was dressed up as good news in that the company said it planned to move onto a definitive feasibility study into its Etango project in Namibia, but said the capital cost was estimated to be a very high US$555 million, and the pre-tax internal rate of return would be a surprisingly low 22 per cent. That information knocked the stock down by A45 cents to A70 cents, while PepinNini continued its fall from grace after declaring that its Crocker Well project was uneconomic, ending the week at A19 cents, down another A2.5 cents, taking the fall over the past two weeks to A14 cents.

    Another surprising uranium moves was by Thundelarra (THX), which issued what it thought was an exciting drill result from its Thunderball uranium project in the Northern Territory, including 12 metres grading 6185 parts per million uranium oxide, and promptly fell A3.5 cents to A41.5 cents. Elsewhere, Manhattan (MHC) lost A6 cents to A$1.20, and its near-neighbour Energy and Metals (EMA) slipped half a cent lower to A21 cents. Extract (EXT) went against the trend, adding A22 cents to A$8.50 and Forte (FTE) put on A2 cents to A15.5 cents.

    Minews. And base metals.

    Oz. Not a lot of positives news from copper, nickel or zinc stocks. Hillgrove (HGO) was the best of a poor bunch, adding A2.5 cents to A39 cents after winning government environmental approval for its Kanmantoo copper mine in South Australia. Citadel (CGG) released a very positive report on its Saudi project, and promptly lost A2.5 cents to A35 cents. Sandfire (SFR) fell A13 cents to A$3.30. Marengo (MGO) dropped A2 cents to A14.5 cents and OZ Minerals (OZL) lost A6 cents to A$1.13.

    Minara (MRE) was the solitary nickel stock to rise, but only just. It added A1 cent to A73 cents. Mincor (MCR) fell A9 cents to A$1.74. Independence (IGO) was down A10 cents to A$4.77 and Panoramic (PAN) eased back by A15 cents to A$2.24. Zinc stocks performed equally badly, with Perilya (PEM) the pick of a dull pack, adding A4 cents to A59 cents. Bass Metals (BSM) lost half-a-cent to A24 cents, and Terramin (TZN) was steady at A75 cents despite reporting over-budget metal production.

    Minews. Coal and specials to finish, please.

    Oz. Coal was fascinating, not because of any outstanding price movements, more because most coal stocks rose in a week when the world watched with amusement the worlds biggest political spin machine at work in Copenhagen at the climate change conference. In theory, coal stocks should be in the dog house. Theyre not, and last week we saw Coal of Africa (CZA) rise by A12 cents to A$1.84. Riversdale (RIV) added A41 cents to A$6.80 and Centennial (CEY) put on A32 cents to A$3.69.

    Minews. Not the price movements of an industry in trouble. Any specials to close?

    Oz. Just one. Nkwe Platinum (NKP) continues to attract attention as work by Xstrata on the Garatau joint venture in South Africa reaches a first-stage climax. Over the week Nkwe added A9.5 cents to A53.5 cents, a price which was A1 cent short of the 12-month high reached in early Friday trade.

    Minews. Thanks Oz, and Merry Christmas for next week.
 
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