News - Market Insights

Shareholders of Venturex Resources have overwhelmingly approved a recapitalisation and the election of several highly regarded directors (reports MiningNews).

An extraordinary general meeting was held yesterday in Perth to vote on the recap, worth up to A$58 million, as announced in February, which was approved by roughly 99% of shareholders. Northern Star Resources executive chairman Bill Beament will join the company as executive director on July 1 and will contribute $37.3 million of the recap funds. Beament will subscribe for $8.9 million worth of 8c Venturex shares, which will give him an 18.1% stake in the company.

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It is not often the activity of criminals provides an investment idea, but when they start stealing copper wire from power stations, or from building sites, then you know it’s time to brush up on copper miners (reports Tim Treadgold on Small Caps).

Kingston in South Australia, a coastal centre more famous for Larry the big lobster, hit the headlines a few days ago when copper wiring was stolen from a nearby power station, plunging the town into the dark. What encouraged the thieves to risk their lives stealing copper from an active power station was the simple enticement of being able to sell it for a handsome profit thanks to a record copper price.

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OZZ Resources is typical of a burgeoning crop of WA initial public offerings in the junior resources space (reports The West Australian).

A couple of blokes with mining pedigree seizing a window of opportunity to compile a few projects, form a company, raise some equity and join the ranks of ASX-listed explorers. After years of weakness in the junior IPO market, positive sentiment has returned, spurred on by surging commodity prices and a bullish outlook for metals. ASX data shows 22 resources-related floats have raised $482.3 million so far this year ahead of their listings on the local bourse.

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Joint venture partners Coda Minerals and Torrens Mining have uncovered intense iron oxide-copper gold (IOCG) alteration with copper-sulphide mineralisation

intense iron oxide-copper gold (IOCG) alteration with copper-sulphide mineralisation while drilling at the Emmie Bluff Deeps target within the Elizabeth Creek copper project in South Australia (reports Small Caps). The first deep diamond hole drilled at the target encountered a sequence of approximately 200m of intensely haematitic and altered sediments and granites, including 50m of moderate-to-intense copper-sulphide mineralisation consisting of chalcocite, chalcopyrite and bornite.

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Kamoa-Kakula in the Democratic Republic of Congo is a rare commodity in the modern resources industry: a high-grade copper mine that one day could produce enough metal to satisfy more than 5 per cent of China’s annual demand (reports Financial Times).

Surrounded by small villages, the mine employs about 7000 workers and has its own road for trucks to carry rock to a nearby smelter. The company is also upgrading a 40-year-old hydropower station on the Congo River to provide electricity to run the mine. The first phase of the $US2 billion ($2.6 billion) project began operating last month, more than four years after the last big copper mine of similar scale, MMG’s Las Bambas, in Peru, came online. A 3-megawatt wind turbine uses up to 4.7 tonnes of copper.

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Rising capital costs, longer lead times and the potential for higher taxes mean miners need copper prices to rise even further before committing to develop new projects, according to investment bank Jefferies (reports MiningNews).

"Even with the copper price recently reaching an all-time high, for example, the incentive price to build greenfield (and some brownfield) projects is still above the current price in some cases as longer lead times greatly impact project returns," said Jefferies. Copper is trading at around US$4.50/lb, up from about $3.50/lb at the start of the year. Prices have not been at such elevated levels for a decade.

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Perenti will lock in a $648 million contract to provide open pit mining at Sandfire Resources’ Motheo copper operations in Botswana if the project gets the green light (reports The West Australian).

The seven-year, three-month contract with Perenti’s African Mining Services will have a one-year extension offer and terms will be finalised if Sandfire is granted a mining licence by the Botswanan government. AMS is set to partner with a local firm for the project and transition to a 70-30 joint venture before the start of mining early next year. Perenti managing director and chief executive Mark Norwell said Motheo was a game-changing growth opportunity for AMS in one of the world’s most attractive mining jurisdictions.

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Australian investors moved heavily into gold during the crash last year with overall inflows up 100 per cent while high net worth investors tripled their holdings in the yellow metal (reports The Australian).

The swing by private investors – as opposed to big super funds – is revealed in a new research report from the Perth Mint’s investment research manager Jordan Eliseo. Needless to say most gold industry reports wax lyrical on the charms of the yellow metal and this report is no exception to the tradition. It does, however, put some very persuasive numbers around the case for gold as an investment choice: Importantly the case is made equally for global gold (always priced in $US) and for local investors using Australian dollars.

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