Australian markets performed over the past week

It was, though most of the heavy lifting was done by the gold sector which reacted quickly to the higher gold price which we enjoyed for much of last week, but which will face stiff headwinds on Monday, in light of the sell-off that occurred after we had closed. When the final bell was rung on Friday at the ASX, the gold price was around US$1,434 an ounce. When the final bell was run at the pub later that night gold was back at around US$1,416 an ounce.

Are you saying that in the interests of the gold price it’s best to not go to the pub on Friday night?

Now, that would be a tough choice for an Aussie.

Indeed. Time to end the chit chat, and get back to the markets.

Good idea. The big picture on the ASX last week involved strength in gold and other resource stocks, weakness in just about everything else. The gold index rose by 2.7 per cent, thanks in large part to a very strong performance by the sector leader, Newcrest (NCM) which rose A$1.39 to A$40.02 after some good discovery news. The metals and minerals index gained 2.2 per cent in the wake of solid rises by Rio Tinto and BHP Billiton, while the all ordinaries only managed a modest rise of 0.7 per cent.

Let’s go straight to gold, and a break from tradition by looking at that Newcrest discovery news.

‘Bonanza’ is probably not too strong a word for the result that Newcrest reported on Friday morning, although the market has probably still not yet fully appreciated the potential size of what Newcrest has discovered in the Highlands of Papua New Guinea, at a project called Wafi-Golpu. The latest drill hole into the Golpu part of the discovery returned an assay of 883 metres at 2.23 grams of gold a tonne, plus 2.15% copper. Within that massive drill core was an enriched zone covering 628 metres at 3.06 grams gold and 2.82% copper. The exploration target there has now been lifted to 30 million ounces of gold and eight million tonnes of copper. A third porphyry-like structure called Miapilli yet to be included in any estimates. When the dust settles on what Newcrest has hit in the Highlands, and the results are combined with its Lihir, Telfer and Bonikro mines, it seems likely that Newcrest will be sitting on a gold and copper resource base bigger than that of Newmont, Goldcorp or AngloGold, the recognised global gold leaders.

Sounds exciting, with the potential for rub off on other PNG miners.

Perhaps in time, because the discovery underlines the enormous mineralised potential of the Pacific Islands, and companies already on the ground there, like Marengo Mining (MGO), which continues to add tonnes to its Yandera copper project. Last week’s development for Marengo was the appointment of Standard Bank as financial adviser to the Yandera development, a move which helped the shares rise A3 cents to A33 cents.

Time to call the card, starting with gold, please.

After Newcrest it was a mixed picture in the gold sector. PMI Gold (PVM), which is making good progress with its Obotan project in Ghana, added A15 cents to A83 cents after reporting further encouraging assays, including 80.08 metres at 7.49 grams per tonne of gold. Ausgold (AUC), the company we took a look at a couple of weeks ago because of interest in its grandly-named South Boddington project, added A10 cents to A$1.50. Then came long queues of modestly positive and modestly negative performances. Among them, Mt Isa Metals (MET) rose A5 cents to A67 cents, Silver Lake (SLR) rose A5 cents to A$2.10, Tanami (TAM) rose A3 cents to A97 cents, Beadell (BDR) rose A3.5 cents to A82.5 cents, Gold Road (GOR) rose A5 cents to A35 cents, Medusa (MML) rose A13 cents to A$7.22, and Norton Goldfields (NGF) rose A1.5 cents to A19.5 cents. On the other side of the coin, Troy (TRY) dropped A15 cents to A$3.58, and Kingsgate (KCN) slipped A17 cents lower to A$9.18. Meanwhile, A1 Minerals (AAM) dropped A1.3 cents to A6.6 cents after lodging one of the more interesting reports seen at the ASX, a complaint casting doubt on geological information about gold resources provided by the company’s former managing director. The board has called for an independent review to verify how much gold it really has at its Brightstar project.

That sounds like a spot of fun. Let us know how it works out.

It is interesting, and while painful for investors in A1, it’s a useful reminder that housekeeping matters can easily be overlooked in boom market conditions. Gold aside, the rest of the sectors were rather dreary, with iron ore, base metals, coal and uranium all marking time, or slipping lower. Best of the non-gold sectors was what might be called minor metals where rare earths, tin, vanadium, zircon, and potash all attracted interest.

Okay, let’s cover the minor metals and save the dreary bits for last.

Lynas (LYC) led the way up among the rare earth companies, adding A30 cents to A$2.20. It was followed by Alkane (ALK), which rose A12 cents to A$1.24, and Arafura (ARU), which rose A2 cents to A$1.20. Interest in the rare earths generally was sparked by news of a big Japanese and Korean investment in a Brazilian project. Potash companies were led higher by South Boulder (STB), which soared to a fresh all-time high of A$6.25 on Tuesday before easing to end the week at A$5.80, a gain of A80 cents. Atlantic (ATI) continues to attract interest, as it undertakes a third attempt at creating a successful operation at the Windimurra vanadium project, and added A22 cents to A$1.93. Mineral Commodities (MRC), a company we haven’t heard much from in a while, rose by A3.5 cents to A12 cents, amid signs that it might be making progress with its southern African ilmenite and zircon projects.

Galaxy (GXY) was the best of the lithium companies, putting in a small rise of A2 cents to A$1.46. That may not look like much, but its rival, Orocobre (ORE), lost A21 cents to A$2.84. Stellar (SRZ) was the pick of the tin companies, and rose A5 cents to A22 cents after reporting high grade assays from its Heemskirk project in Tasmania. Kasbah (KAS) lost A2 cents to A31.5 cents, and Venture (VMS) slipped A1.5 cents lower to A51.5 cents, despite positive development news. Silver companies, which seem to be developing a life separate from gold, all rose. Cobar (CCU) put on A10 cents to A$1.03. Alcyone (AYN) added A1 cent to A7.3 cents, and Silver Mines (SVL) also gained A1 cent to A37.5 cents.

Quite a mix there. Now for the regular sectors, starting with iron ore, please.

Flat, as warned. Brockman (BRM) was the pick of the iron ore plays, adding A51 cents to A$6.00, while Iron Ore Holdings (IOH) gained A16 cents to A$1.86. After that it was flat or down. Aquila (AQA), which also has coal interests, added A12 cents to A$8.75. Atlas (AGO) slipped A3 cents lower to A$3.87. Murchison (MMX) was flat at A$1.39, Mt Gibson (MGX) was flat at A$2.02, and Sherwin (SHD) was flat at A19.5 cents.

Base metals, coal and uranium to close, please.

Same story. Not a lot of movement. Best of the copper companies was Rex (RXM), which added A12 cents to A$2.87, Sumatra (SUM) which gained A3 cents to A31.5 cents, and Hot Chili (HCH) which put on A4 cents to A70 cents. Equinox (EQN) fell a sharp A32 cents to A$5.82 as it made its move on Lundin Mining. Sandfire (SFR) failed to move at all, ending the week at A$7.24 despite confirming development plans for its Doolgunna project. Elsewhere, OZ Minerals (OZL) added A1 cent to A$1.65.

Among the nickel companies, only Western Areas (WSA) gained any substantial ground, as it put in a rise of A28 cents to A$6.94. Panoramic (PAN) also rose, adding A2 cents to A$2.29, but Mincor (MCR) slipped A8 cents lower to A$1.61, and Independence (IGO) lost A14 cents to A$6.68.

Most zinc companies were weaker, or unmoved. Overland (OVR) ended its recent upward run with a fall of A6.5 cents to A23.5 cents. Bass (BSM) lost A4 cents to A43.5 cents, and Prairie Downs (PDZ) shed A2 cents to A18.5 cents. Going against that trend was Perilya (PEM) which put on A7 cents to A69 cents.

Coal companies were mixed, but the general trend was up. Aston (AZT) added A17 cents to A$8.99, while Coal of Africa (CZA) gained A4 cents to A$1.43. But Riversdale (RIV) slipped A7 cents lower to A$15.08, and Carabella (CLR) ended its strong upward run with a decline of A21 cents to A$2.04.

Most uranium companies gained a little ground, helped along by the higher uranium price. Extract (EXT) added A31 cents to A$9.46. Paladin (PDN) added A10 cents to A$4.99, and Berkeley (BKY) was up by A1 cent to A$1.48.

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