Australian markets performed over the past week

Very much so. It was hard to find a company that lost ground last week, which presented a marked contrast to how the markets looked in the last couple of weeks of January. What’s more, the miners led the market, with gold doing best. The all ordinaries index added 1.7 per cent, not a bad result considering the negative publicity about cyclone Yasi in Queensland and continuing floods in Victoria. The metals and mining index put on more than double that, closing up 3.8 per cent, while the gold index was up by four per cent.

Not what might have been expected, given the likelihood of widespread storm damage.

In hindsight the impact of the cyclones and floods hasn’t caused a great deal of long-term damage to industry. In many ways it’s been more of a media and a political event than an industrial catastrophe. That might sound a rather hard observation, and there’s no doubt a lot of people have suffered losses, and there have been a number of deaths. But most of the mines that closed because of flooding are working again, or soon will be. Insurance payouts are smaller than feared, and normal business is being resumed. Which is why investors brushed off the event as just another example of the weather at work.

Enough philosophy, time for prices.

Gold was the star sector, though one might argue that it was a relief rally an earlier decline triggered apprehension that the gold price might fall below US$1,300 an ounce. Troubles in the Middle East reminded investors that gold is far more than an alternative currency, and the bounce back to US$1,350 on safe-haven buying sent most gold companies higher. Copper also did well as the price passed through the US$10,000 a tonne mark, while rare earths, lithium, potash and phosphate companies led the way among the minor minerals. Iron ore also produced a few winners, but concerns about rising costs, and worries that the super-tax will become law sooner than later, is starting to take its toll.

That super-tax of yours will not go away.

It is a worry, and a serious one because the politics of the issue are changing. Last year the miners won public support when they were able to demonstrate the importance of the industry to the economy. Last week saw a curiously negative development when the latest version of Australia’s “rich list” named two iron ore players as the richest people in the country. Gina Rinehart, daughter of the late Lang Hancock, topped the bill at US$9 billion. Andrew Forrest, founder of Fortescue Metals, was second at U$6.9 billion. The problem for the iron ore sector is how to engineer a split in the public mind between those personal fortunes and a government demand that the industry share some of the spoils. It will all probably take another turn for the worse when the big miners start reporting in the week ahead, with Xstrata, BHP Billiton, and Rio Tinto, sure to post monster numbers thanks to the boom, thereby giving the government more firepower to ram through the super-tax.

We’ll keep an eye on the tax issue. For now let’s focus on prices, starting with gold.

No stand-out performers, just a solid set of risers, and very few fallers. The companies that did best included Perseus (PRU), up A24 cents to A$2.96, and Gold Road (GOR), up A6.5 cents to A35 cents. Avoca (AVO) rose A45 cents to A$3.30, and this will be its final price as its merger with Anatolia Mines has now passed all legal hurdles, and the newly-merged business will trade in future as Alacer Gold. Among the other gold risers were Kingsgate (KCN), up A46 cents to A$9.60, CGA (CGX), up A26 cents to A$2.93, Silver Lake (SLR), up A11 cents to A$1.98, Medusa (MML), up A69 cents to A$7,23. Beadell (BDR) was also better off, up A7 cents to A76 cents, as interest builds in its Brazilian gold project.

We might take a look at that one shortly. Now, on to copper.

Strong all over for copper. There were plenty of stars, so for a change we’ll start with a short survey of recent events at the smaller end. Voyager Resources (VOR), which is chasing a big copper porphyry system in Mongolia, rose by A3.9 cents to A13 cents, and fended off a fresh speeding inquiry from ASX regulators. Just two weeks ago Voyager was trading around A5 cents. Frontier Resources (FNT), another explorer hunting “elephants”, this time the island of New Britain, added A2.5 cents to A17.5 cents. In late December, Frontier was trading at less than A10 cents. And third example of a copper company that’s recently caught the interest speculators is TNG (TNG) which was once best known as a zinc explorer, but which has recently reported excellent copper assays from its Mount Peake project in the Northern Territory. Last week, shares in TNG more than doubled, with a run from A6 cents up to a 12-month high of A14.5 cents in early Friday trade. It finally ended the week at A12 cents.

Among the better-known copper stocks companies Equinox (EQN) hit a new record price of A6.79 on Friday, before closing at A$6.65, up A69 cents for the week. Sandfire (SFR) added A42 cents to A$7.60. Rex (RXM), rose by A16 cents to A$3.09. Talisman (TLM) put on A15 cents to A88 cents. Exco (EXS) gained A5.5 cents to A58.5 cents. Hot Chili (HCH) added A7 cents to A53 cents. OZ Minerals (OZL) closed at A$1.71, for a gain of A7 cents. The only copper plays not caught in the upward trend were Marengo (MGO), which remained stuck at A35.5 cents, and Altona (AOH) which slipped A1.5 cents lower to A37.5 cents.

Let’s finish with the base metals, and then across to iron ore and coal, please.

Oz. Nickel and zinc companies put in a mixed performance, in spite of firmer nickel and zinc prices. Nickel is sitting comfortably above US$12 a pound, a price which would normally trigger a nickel boom in Australia. So far, there’s been a limited reaction to that price, though it’ll be interesting to see how long the nickel punters wait on the sidelines. Western Areas (WSA) was the best of the pure nickel companies, adding A11 cents to A$6.60. Independence (IGO) was the best of the nickels overall, allowing for the boost also provided by its gold assets. It rose by A43 cents to A$7.58. Other nickel movers included Mirabela (MBN), up A4 cents to A$2.29, and Panoramic (PAN), up A14 cents to A$2.47. Mincor (MCR) moved the other way, slipping A2 cents lower to A$1.74.

Meridian (MII) was the best of the zinc companies, posting a rise of A2 cents to A13.5 cents. Perilya (PEM) added A3.5 cents to A59 cent. Terramin (TZN) lost A4 cents to A40.5 cents, perhaps because of exposure to assets in North Africa. Bass Metals (BSM) eased back by A1.5 cents to A36 cents, and Ironbark (IBG) slipped A1 cent lower to A25.5 cents.

Iron ore companies were generally firmer, but most moves were modest. Pick of the sector was Atlas (AGO), which shot up by A67 cents to A$3.89. Its takeover target, Giralia (GIR), added A91 cents to A5.66. After those two it was less exciting. Aquila (AQA) added A17 cents to A$9.44. Fortescue (FMG) rose A6 cents to A$6.57. Iron Ore Holdings (IOH) was A2 cents stronger at A$2.07. Gindalbie (GBG) shed A2 cents to A$1.34, as worries grow about a big cost blow-out at its Karara mine. Territory (TTY) was off by half a cent at A32.5 cents.

Coal companies were relatively flat after several very solid months. Most moves were small, either way. Xanadu Mines (XAN) was one that caught the eye of traders as it makes progress with its Mongolian assets. Xanadu was up by A8 cents to A70 cents on the week. Bathurst (BTU) added A5 cents to A$1.06. Aston (AZT) gained A20 cents to A$8.70. On the downside, Coal of Africa (CZA) lost A8 cents to A$1.59, and Continental Coal (CCC) eased by the smallest possible amount, A0.1 of a cent to A8.1 cents.

Uranium and the minor metals to finish please.

Oz. Uranium companies were stronger across the board as the spot price rose another US$3.00 a pound to US$73 per pound. The minor metals continued to attract speculators to a smorgasbord of potash, phosphate, lithium and rare earths. Among the best movers in uranium were Paladin (PDN), up A38 cents to A$5.21, Extract (EXT), up A47 cents to A$9.40, Uranex (UNX), up A13.5 cents to A77.5 cents, and Bannerman (BMN), up A6.5 cents to A82 cents. And some uranium companies we rarely hear about also delivered good moves, including White Canyon (WCU), which rose A2.5 cents to A20 cents, and Aura (AEE), which rose A6.5 cents to A45 cents.

Minor metals produced a number of eye-catching moves and stock exchange filings. Altura Mining (AJM) joined the lithium bandwagon and rose A5 cents to A22 cents on news of promising drill results from a project in Western Australia. Tin companies performed well. Venture (VMS) added A4 cents to A55 cents, and Kasbah (KAS) rose A5 cents to A37 cents. Peak Resources (PEK) was both a newcomer and star performer among the rare earths, rising A23 cents to A76 cents after reporting excellent drill intersections.

And we’ll sign off with a gem. Fortis Mining (FMJ) more than doubled with a rise of A38 cents to A69 cents, on news that it has entered into a strategic relationship with a Hong Kong company, Grand Concord Investments. There was no specific news about exploration, just the new friendship pact and a promise that Grand Concord’s principal owner, Madam Cheung (no first name), had “a substantial network of clients and mining-related relationships throughout Asia and Eastern Europe”. Minesite’s Man in Oz can hardly wait to see what Madam Cheung has to offer.

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