ferret report

  1. blt
    164 Posts.
    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)
    ************************************

    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


 
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