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reuters article...small igo mention

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    But significant...the implications for profit of an output increase are substantial...though this was pre-forecasted in quarterly.


    Australian miners hope magnets can spur new boom
    Monday March 29, 10:21 pm ET
    By James Regan

    SYDNEY, March 30 (Reuters) - Australian prospectors are taking to the skies or dragging magnets across the outback, searching for rich ore bodies missed by earlier explorers and fuelling a rash of small mining floats.

    Spurred by high metal prices and booming demand led by China, low-capitalised "minnows" are flocking to the Australian Stock Exchange, promising to use airborne and ground-based electromagnetic technology to unearth copper and nickel that conventional drilling failed to detect.

    In some cases, earlier prospectors bent only on finding gold had walked away from the properties.

    "Electromagnetic surveying has become a bit of a buzzword with the brokers. Old ground that has not been explored for years is now getting a second look," said Bruce Craven of Southern Cross Geoscience Consultants, which interprets electromagnetic data.

    More than 20 small base metal miners and explorers have listed in the past 12 months thanks to underwritings by mostly small stock brokerages, compared with just a handful a year earlier when metals prices were at the bottom of the price cycle.

    In the last six months alone, small miners have raised around A$145 million -- big bucks for small miners, but small change compared with the A$6.47 billion in total initial public offerings in the second half of 2003, according to ASX figures.

    A series of new finds and an upturn in nickel and copper prices to their highest in more than a decade had helped exploration companies entice investors after years in the cold, said Eagle Mining Research analyst Keith Goode.

    "Some will flop and disappear or merge, but resource stocks are running right now, fuelled by big demand for commodities," said Eagle Mining Rearch analyst Keith Goode.

    "The ones that are in production or close to it have the best shot, becasue they can point to the market and say 'See what I've got?'", Goode said.

    About two-thirds of the recent floats are beating their listing price on the Australian Stock Exchange.

    Independence Group NL (Australia:IGO.AX - News), whose shares rose fourfold last year after it bought an old nickel mine, is planning to lift output by a third using a electromagnetic metal detector, said Managing Director Christopher Bonwick.

    Red Metals Ltd (Australia:RDM.AX - News) issued 60 million shares last October to fund prospecting at 20 cents each. They are now worth 25 cents.

    "With techniques such as electromagnetic surveying, we can see much deeper below the surface than we could in the past," said Robert Rutherford, managing director of Red Metals Ltd.


    In some of the remotest parts of the Australian continent, teams of prospectors, who once carried shovels and pans, now lay out rolls of copper wire in the hope of setting off alarm bells signalling the next big find.

    Some fly overhead taking electromagnetic readings, while others employ satellite images to point them to rich veins.

    Electromagnetics home in on highly conductive sulphide ore zones, which can contain rich veins of nickel and copper. Finds can be detected as deep as 200 metres (650 feet) from the surface, giving modern explorers better odds of making a find.

    Gold, which is mined in Australia at a rate of about 300 tonnes a year, is much less likely to be found with electromagnetic readings.

    Among the rash of new listings, Mincor Resources NL (Australia:MCR.AX - News) intends to spend a A$7 million exploration budget on aeromagnetic surveying of old ground over the next 15 months.

    "We now have one of the largest reserve inventories of nickel sulphides of any mid-tier company in Australia and we will soon have four mines in operation," Mincor Managing Director David Moore said.

    Nickel Australia Ltd (Australia:NKL.AX - News), which made its stock market debut in December at a 10 percent premium to its issue price after a heavily oversubscribed issue, has moved quickly to find nickel to mine.

    Internickel Ltd is offering 12.5 million 20 cent shares, telling potential investors it hopes to start prospecting on 11 promising targets using airborne electromagentic mapping. It aims to start drilling within four weeks of listing. ($1=A$1.35)

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