Australian markets performed on the past week

That’s an interesting point because while the human suffering has been high the reality is that the floods are a routine business phenomena, given that flooding occurs at regular intervals in that part of the world. The reaction of coal companies is the perfect example. While newspapers focussed on the force majeure declarations of some exporters the share prices of all the coal companies we follow rose during the week – thanks to the force majeure cuts which pushed the price of coal higher.

Tough world, isn’t it?

It is, but that’s business. Overall, the Australian market had a fairly good week. The all ordinaries added two per cent. The minerals and metals index rose by 2.5 per cent, while the gold index was the weak link, creeping just 0.2 of a per cent higher following the fall in the gold price. Further share price falls for our gold companies can be expected on Monday, as the gold price dropped quite sharply after our Friday close. As has been the case in recent weeks we had a number of very strong companies, even in weak sectors, with the exception being zinc which just can’t develop any traction for a sustained recovery.

Let’s start with gold, as that seems to be attracting the closest attention.

Most gold companies managed to gain ground, which raises a question over that very small rise in the gold index. The gold index was held back because Newcrest (NCM), easily the biggest Australian gold producer, slipped by around one per cent to A$38.29, a fall linked to its exposure to the troubles in Ivory Coast where it now runs the Bonikro mine. If you shift Newcrest to one side it’s arguable that the overall gold sector was up by the same percentage as the metals and mining index, around two per cent.

Top of the gold heap last week was an old friend of Minesite, Medusa Mining (MML), which earned a speeding ticket from the ASX after an A81 cent rise to A$7.52. Along the way, on Thursday, it hit a 12 month high of A$7.71. Naturally, management knew of no reason for the price spike, but a move like that at a time when the gold price is a bit wobbly smells of corporate activity.

Kingsrose (KRM), which has a similar appearance to the Medusa of a few years ago, in that its working a high-grade epithermal vein system in the tropics, also hit a 12 month high, adding A16 cents to A$1.54. Noble Mineral Resources (NMG), one of the new players in West Africa, also performed well, adding A13 cents to A71 cents, after briefly setting a new high of A73 cents, following an excellent set of assays from its Bibiani project in Ghana. Elsewhere, Elemental (ELT) gained A7 cents to close at a fresh 12 month high of A39 cents as interest grows in its La Puerta discovery in Argentina. Dragon Mining (DRA) reported a solid resource upgrade at its Kuusamo project in Finland, adding A10 cents on the market to close at A$1.70. YTC (YTC), reported bonanza grade assays from its Hera project in New South Wales, rising by A4.5 cents to A57 cents, and PMI (PVM) made its first solid upward move after a lacklustre listing late last year, rising by A9 cents to A65 cents on the strength of good drill results from Ghana.

Most other moves were modest either way. Gains were posted by Gryphon (GRY), up A9 cents to A$1.88, Avoca (AVO), up A10 cents to A$3.35, Resolute (RSG), up A9 cents to A$1.47, Catalpa (CAH), up A12 cents to A$1.97, Nyota (NYO), up A3 cents to A46.5 cents, and Ampella (AMX), up A8 cents to A$2.93. Losses were posted by Silver Lake (SLR), down A2 cents to A$2.10, Sirius (SIR), down A1 cent to A30 cents, Crusader Resources (CAS), down A10 cents to A$1.17, and Adamus (ADU) down A3.5 cents to A81.5 cents. Also weaker was Reed Resources (RDR), which fell A8.5 cents to A66.5 cents after taking the courageous step of buying the Meekatharra gold project which has broken the back of at least five previous owners, including the London-listed company formally known as Mercator Gold.

You think Reed might be taking a step too far?

The jury is out, but going back into gold when you seem to be doing well with a lithium project and a re-emerging vanadium project, might be a stretch for a small company.

The fuel twins, coal and uranium next, please, as they seem to be heating up.

Coal companies did well, following the flood-induced export cuts, while uranium companies benefited from a US$3.00 increase in the spot uranium price to around US$66 per pound. Aspire (AKM) was the best of the coal companies after it reported a fresh discovery in Mongolia. It rose A14 cents to a 12 month high of A61.5 cents. Bathurst (BTU), the New Zealand coking coal developer, rose A10 cents to A88.5 cents, but did hit a 12 month high of A91 cents during Friday trade. Other coal movers included Coalworks (CWK), up A12 cents to A90 cents, Carabela Resources (CLR), up A25 cents to A$1.39, Aston (AST), up A20 cents to A$8.39, Coal of Africa (CZA), up A8 cents to A$1.79, and Continental Coal (CCC), up A0.6 of a cent to A8.7 cents. Riversdale (RIV) was the only major coal company to lose ground, shedding A29 cents to A$16.48 as reports surfaced that Rio Tinto might drop its takeover bid.

Most uranium companies rose, and those that didn’t were steady. Pick of the pack was Northern Uranium (NTU), which jumped A14 cents to a 12 month high of A53.5 cents, though interest was perhaps driven by its growing exposure to rare earths. The oddly-named U3O8 (UTO) also set a new high of A21 cents on Friday, before closing up A2.5 cents at A20 cents. Berkeley (BKY) shook off uncertainty about its deal with a Russian suitor, rising by A10 cents to A$1.82. Uranex (UNX) resumed its upward movement with a rise of A4.5 cents to A73.5 cents. Deep Yellow (DYL) also put on A4.5 cents to end the week at A36.5 cents, and Greenland Minerals (GGG) rose by A6 cents to A$1.28.

Iron ore next, please.

Like the other sectors, iron ore had a few stars that shone, amid a general upward trend. The stand-out performers, reaching new 12 month highs, were Northern Iron (NFE), the Norwegian magnetite exporter, which added A13 cents to A$1.91, and BC Iron (BCI), which is getting ready to make its first shipment of ore to Asian, and rose by A29 cents to A$3.15. African Iron (AKI) delivered a strong performance after re-listing with an old Cape Lambert asset as its centrepiece, and added A18 cents to A42 cents. Equatorial Resources (EQX), another of the Australians making waves in the African iron ore sector, delivered a sharp A60 cent rise to A$3.95, while and FerrAus (FRS), one of the takeover targets of the mysterious Wah Nam International (WNI) gained A11 cents to A$1.04.

Wah Nam was also the focus of the news event of the week, copping a stop order from the Takeovers Panel in regard to its second target, Brockman Resources (BRM). A preliminary finding from the Panel found that companies associated with Wah Nam might have breached the Australian Takeovers Code. A full hearing is scheduled for the next week. On the market, Brockman added A5 cents to A$5.30. Other iron ore movers included Iron Ore Holdings (IOH), up A4 cents to A$2.29, Atlas (AGO), up A26 cents to A$3.29, Giralia (GIR) up A40 cents to A$4.88, and Fortescue (FMG), up A28 cents to A$6.85.

Base metals and minor metals to finish.

Base metal stocks were flat, but minor metals continued to generate excitement, especially the rare earths. Among the coppers there was one outperformer, Hot Chili (HCH), which shot up to a 12 month high of A58.5 cents on Friday before closing the week at A54 cents, for an overall gain of A3.5 cents. Other copper companies to rise included OZ Minerals (OZL), up A4 cents to A$1.73, Discovery Metals (DML), up A3 cents to A$1.41, and Resources and Investment (RNI), up A5 cents to A$1.12. Fallers included Altona (AOH), down A2 cents to A44 cents, Equinox (EQN), down A16 cents to A$5.92, Sandfire (SFR), down A10 cents to A$7.79, and Bougainville (BOC), down A3 cents to A$1.99.

Nickel companies did slightly better. Western Areas (WSA) reported strong production numbers for 2010, and added A46 cents to A$6.69. Mincor (MCR) continued its slow recovery, putting in a rise of A5 cents to A$1.91. Panoramic (PAN) rose A10 cents to A$2.49, and Independence (IGO) gained A21 cents to A$7.74.

Zinc went nowhere, as we’ve already mentioned. Most moves were a cent or two either way. Meridian (MII) lost A1 cent to A13 cents. Bass (BSM) rose half a cent to A37.5 cents, and Perilya (PEM) lost A2.5 cents to A60 cents.

Arafura (ARU) was the top rare earth company after it reported on higher market prices for its cocktail of odd metals, adding A15 cents to A$1.56. Lynas (LYC) rose A12 cents to A$2.03, and Alkane (ALK) went back over the A$1.00 mark to end the week at A$1.06, up A8 cents.

The handful of platinum companies listed on the ASX reacted positively as platinum rose through the US$1800 per ounce barrier. Platinum Australia (PLA) added a sharp A18.5 cents to A80 cents, and Zimplats (ZIM) put on A45 cents to A$15.20.

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