London markets performed over the last week

The worsening conflict in Libya cause instability in various commodities such as oil prices rose sharply to U.S. $ 112 per barrel. Although the situation in Libya is not going to threaten the global recovery, but it caused some alarm if it spreads and impinge on other countries oil priodusen which more substantial, like Saudi Arabia. If this happens, oil prices could spike above a record U.S. $ 147 per barrel occurred in 2008. A high price will certainly damage the national economy in the world, and hitting demand for commodities.

Except for gold and silver, that is. The two precious metals benefited from the growing fears to climb to US$1,409 and US$33.3 per ounce respectively. In contrast, platinum and palladium, with their greater industrial uses, fell back. Platinum closed lower at US$1,808 per ounce while palladium shed 7.7 per cent to US$777.75 per ounce.

Industrial base metals also suffered from the Libyan crisis. Copper closed lower at US$9,675 per tonne, or US$4.39 per pound. Nickel slipped to US$27,730 per tonne, and zinc also closed lower, at US$2,488 per tonne.

All the uncertainty made it a mixed week for the majors. BHP Billiton gained 1.8 per cent to 2,434p, Anglo American also gained 1.8 per cent to 3,285p, but Xstrata slipped 3.4 per cent to 1,382p. Rio Tinto closed 2.9 per cent lower at 4,270p, as it announced that its coastal operations in the Pilbara region of Australia continue to be hampered by issues associated with tropical cyclones.

Silver miners also had a mixed week, despite the strength in the silver price. Arian Silver closed 2.3 per cent lower at 43p, despite announcing the intersection of good silver grades six kilometres west of its San Jose site in Mexico. Mineralisation remains completely open along strike and at depth. But Hochschild Mining gained 6.5 per cent to 600p as it announced a resource upgrade at the Inmaculada project in Peru, where silver resources now amount to 76 million equivalent ounces at a grade of 498 grammes per tonne.

Gold producers were also in the news. In announcing Avocet Mining’s full-year results, chief executive Brett Richards revealed that his company is hoping to double the current one million ounce gold reserve at its Inata gold mine in Burkina Faso by the autumn. Such an upgrade would double the mine life to 12 years. Avocet is also drilling elsewhere in the region with a view to identifying its next mine. The shares edged lower to 217p.

Meanwhile, management at Medusa Mining issued a production forecast for operations at the company’s Co-O mine in the Philippines. The company expects to produce 102,000 ounces for the full year to June, at cash costs of just US$190 per ounce. Medusa has also approved construction of a new plant with a capacity to produce 200,000 ounces per year. The shares slipped 3.3 per cent to 440p.

In South Africa, Pan African Resources hasn’t quite been able to lift its gold production to the 100,000 ounces per year threshold yet. But on the platinum side the company appears to be making good progress. Construction at the Phoenix project is scheduled to start in the spring, with the company targeting commissioning this October, and full production in the first quarter of 2012. The shares gained 2.4 per cent to 10.5p.

In gold exploration, Mali-focused African Mining & Exploration has started drilling at the Karan licence, where there’s been extensive artisanal mining over many years. That news wasn’t enough to get the market excited, though, and the shares closed seven per cent lower at 15.7p.

Shares in diamond miners slipped back despite positive news from the sector. By acquiring the Finsch mine in South Africa, Petra Diamonds has transformed an already strong production outlook, and turned itself into the largest independent diamond miner. Chief executive Johan Dippenaar said he didn’t see any other deals on the horizon, but added that generating US$1 billion in turnover was very much in the group’s sights by 2019. Market commentators expressed some disappointment that profits hadn’t been higher, though, and the shares closed 1.3 per cent lower at 173p.

DiamondCorp provided further evidence of the strong rebound in diamond prices, with the announcement that it had sold 1,321 carats of diamonds recovered from tailings at its Lace mine, for US$94 per carat. This exceeds the US$55 per carat received in September 2008, just prior to the price collapse, and compares with the US$33 per carat received in May 2009 at the bottom of the market. The shares closed 1.7 per cent lower at 14.75p.

And, following encouraging recent sampling results, it came as little surprise when Stellar Diamonds announced it would now focus on the development of its kimberlite diamond projects, albeit the alluvial projects continue to generate useful cash flow. Even so, Stellar closed 8.7 per cent lower at 8.9p.

Among energy commodities, Kalahari Minerals announced it was in talks with Australia’s Extract Resources with a view to simplifying the ownership of the Husab uranium project in Namibia. Husab hosts the world-class Rossing South deposit, and Extract, in which Kalahari holds a 41 per cent interest, has long been in talks with Rio Tinto, which controls the nearby Rossing mine, about the possibility of combining the two operations. Recent chemical assays have confirmed new targets at Husab and Kalahari's shares climbed 2.6 per cent to 246p.

In the coal space, shares in Churchill Mining fell 20.7 per cent to 88p after it announced that despite booming Asian coal demand, it still hasn’t finalised an investment package to fund development of its substantial East Kutai coal project in Indonesia. Churchill is currently examining three proposals from Indonesia, India and the Middle East. Elsewhere in coal, Beacon Hill Resources has completed drilling at the Minas Moatize coal project in Tete, Mozambique, where the company aims to expand and further define the current resource of 33 million tonnes. An updated resource is due shortly, and in the meantime the company continues to sell coal domestically, ahead of first exports. The shares gained 2.2 per cent to 17.13p.

Also in the Tete region of Mozambique, Baobab Resources jumped 23.1 per cent to 24.6p after it released a promising update from its Tete iron, vanadium, and titanium project. The latest results show that the resource contains a broad body of heavily mineralised magnetite.

Also in iron ore, London Mining announced the results of a scoping study investigating the potential of a 15 million tonnes per year operation at its Isua project in Greenland. The project has an estimated post-tax net present value of between US$2.5 billion and US$4.5 billion, with a capital requirement of US$2 billion, and could be in production in early 2015. Big numbers, and some commentators wondered if the company was spreading itself a little thin. London’s shares slipped 10.3 per cent to 368p.

Recently-floated Ferrum Crescent has begun drilling at its Moonlight iron ore project in South Africa. That wasn’t enough to satisfy punters in a jittery market, and the shares closed 5.5 per cent lower at 15.13p. Also weaker, Ferrexpo fell by 6.8 per cent to 409p as it announced plans to acquire up to 1,000 newly-built open rail car wagons to transport iron ore pellets to the Ukrainian border, for onward delivery to customers. Each wagon will cost up to US$120,000.

In other commodities, Connemara Mining eased 2.6 per cent to 22.9p after it announced it had begun drilling for zinc on its three-licence Thurles block near the Lisheen zinc mine in Tipperary. The company also raised £1.05 million through a placing at 20p. Each new share also comes with a 12 month warrant exercisable at 35p. The new money will be used to finance an expanded drill programme in Ireland,

Meanwhile, Alexander Mining slipped 8.6 per cent lower to 15.53p after it announced plans to build a pilot cobalt processing plant in partnership with Anvil Mining at the Mutoshi deposit in the Democratic Republic of the Congo. The plant will use and test Alexander’s proprietary Ammleach mineral processing technology.

Amongst fund raisers, Titanium Resources Group raised £11.4 million through a placing at 10p. The new money will be used to repay a significant part of a loan from the Sierra Leone government. The company also changed its name to Sierra Rutile, or back to Sierra Rutile, as old hands will know. The shares leapt 60 per cent to 15p.

Finally, gold and copper explorer Bezant Resources raised £4.75 million through a placing at 50p, and will use the proceeds to fund the acquisition and initial work programme at its new Eureka project in Argentina. Bezant’s shares closed 10.9 per cent lower at 50p.

Source