ferret report

RWE 07:17:00 833 24/11/2003 (FE) Around the Traps ... with THE FERRET
RWE News
7:17:020 24/11/2003
Sydney - Monday - November 24: (RWE)
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The market can be awfully hard.
One minute you're putting on more side than a rat with a gold
tooth.
The next, you're a dead rat.
VULCAN RESOURCES (VCN) must be feeling bit like that after the
shares plunged 36c to 12c on Friday before closing at 15c.
As we pointed out, Vulcan on Monday bragged to shareholders how
its shares had soared from 12c to 49c since acquiring the Saulyak gold
deposit in the Ukraine - an "opportunity to build a world-class gold
company" and "potential to host a significant gold deposit", Vulcan
gushed. On Friday, the company said that " given the downgrade of
potential, Vulcan, having met its obligations under the purchase
agreement, is likely to terminate that agreement and thereby withdraw
from the Saulyak project".
Ukraine? More migraine!

*****

GINDALBIE GOLD (GBG), which rose 0.5c to 22.5c, after a progress
report on Friday,is a happier scene for investors in gold exploration.
Back in October, we were surprised the shares fell 0.5c to 17c after a
strong September quarter's production and the company's revelation that
it would be a debt-free, unhedged producer by the end of this year.
However,it was just a matter of a slow reaction and the stock
took off and peaked at 27c two days later.
On Friday, Gindalbie said it was targeting a significant increase
in the gold resource base of its Minjar gold project in WA.
It is committing to a major new resource drilling program in the
Silverstone South area to follow up high-grade results and a significant
geological reinterpretation of the area.
Drilling below the base of the open pit included a drill core
section five metres long containing 11.62g/t gold and 5m at 14.42g/t.

*****

HENRY WALKER ELTIN (HWE) will be well advised to use plain
English if it doesn't want to be misunderstood (funny, that sounded like
music there).
At the annual meeting early in the week, chairman Neville Walker
said that "Overall, the first half-year profit should be commensurate
with the profit reported for the second half in 2003, and we expect the
second-half profit in 2004 to be modestly higher."
This did sound a bit down in the mouth and some sections of the
market took it as a profit warning.
On Friday, Corporatefile asked in a briefing whether, seeing as
how the shares had fallen since the AGM from $1.10 to 92c, the market was
losing faith in the recovery story.
CEO Bruce James said, "A number of shareholders are supportive of
our strategy as we are tracking in line with our expectations and with
our previous guidance.
"The recent volatility in our share price is disappointing.
"Contrary to one or two reports, we haven't issued a profit warning." OK,
let's go back to that commensurate bit. Last year, the company lost $23.6
million after a loss of $29.1 million in the first half, which meant the
sceond half had to be a profit of $5.5 million.

*****

If the first half this year will be commensurate with the second
half last year then the result should be a profit of $5.5 million, and if
the second half this year will be "modestly higher" (say 10 per cent)
than the first half of this year, then the full year should be a profit
of $11.5 million.

*****

CHILD CARE CENTRES (CDC) had some good news/bad news for
shareholders at the annual meeting but the bad news counted, forcing the
shares down 9c to $1.47.
This was chief executive Raelene Murphy's warning that the
company would be affected by costs associated with the transition to
Peppercorn management in the 2004 financial year with EBIT set to go down
from $2.8 million to $2 million.
Offsetting this was the fact that restructuring costs brought the
benefit of up to $17.1 million in additional capital from Peppercorn
Management Group and a lower head-office structure, combined with the
future earnings benefit from quality centres sourced from Peppercorn.
The future was strong and bright, she said, but the bad news won.

*****

You never know but the late Friday night announcement that
CHESTER MINING (CHT) has reduced current liabilities (from $238,625 to
$90,000 - partly through the issue of 6 million shares) could bring the
buyers running and turn the shares around after Friday's 0.1c fall to
1.5c.
Chester says these 6 million will rank equally and participate
fully in any dividends, although, duh!, no assurance is given as to
future dividends since they are dependent on earnings.
This time last month, Chester allotted 17 million shares at 1c to
"various strategic sophisticated investors" at 1c.
It was a sweet, money-doubling deal for the "sophisticates" because the
shares were 2.1c in the market.
We hope they haven't been cashing and forcing the price down.
Chester said at the time it had started work "in
Guinea in Africa on its Kosoko Gold Project" which it said was, duh!,
"situated in Guinea in Africa".
ENDS
!END