MetalsX, Ecuador, Kingsgate, Cawse
14 April 2008
TIN miners would likely be wearing quite a smile this week with the metal at $US21,500 per tonne and forecasts from a shindig in Hong Kong suggesting it could be on its way further north for all the usual commodity reasons.
That’s someway above the less than $US6000/t it was fetching as recently as late 2005, and would mean the team at Australian-based Metals X (MLX) would be especially smiley. For despite recently suffering the colliwobbles at Collingwood, they are showing some lovely timing with the re-start of the Renison tin mine in Tasmania set down for June.
In February MLX indicated that Renison was expected to produce approximately 8500tpa tin metal (increasing to 10,000t in 2009/10) and 1500tpa of copper co-product at an operating cost of about $A8000-$A8500/t.
At current prices, that means the operation would be generating annual earnings in the region of $A120 million (EBITDA), with the planned Rentails operation that’s planned to be in production by 2010 at a rate of 5500t of tin (and operating costs of about $A6000/t), adding another $A80 million.
Undoubtedly there’s still a bit of water to go under the bridge (especially in Tasmania) before these sort of numbers can be banked, but one gets the picture given the company was this week capitalised at about $A400 million.
Well, at least part of the picture anyway, because as late as last month, Sydney-based brokers Southern Cross Equities were arguing most of the upside value in the stock was with the company’s Wingellina nickel laterite project in the remote Central Musgraves region of WA, SA and the NT – it's on the border of those three states.
China’s major nickel producer Jinchuan is MLX’s biggest shareholder having invested $A50 million to date. It subscribed for $A18 million worth of shares in January at priced at 30c per share, after an initial investment in March 2007 when it bought 117 million shares at 28c.
ECUADOR has struck another blow against Western investors looking for offshore opportunities, with Ecuadorean president Rafael Correa reportedly saying this week he backs suspending large-scale mining exploration projects while a new mining law is approved to regulate the country's nascent industry.
According to RBC, Correa said he supports large mining projects that will benefit his poor nation with billions of dollars in revenues, but companies will have to comply with stricter controls.
It was unclear which exploration projects would be affected or when the suspension would begin but traders in companies such as Corriente Resources and Aurelian Resources – the latter which has perhaps made the most promising gold discovery of the past decade – knew what they should immediately do.
WHEN you’ve suffered unrelenting negative news for as long as stymied Thai gold miner Kingsgate Consolidated has, any hint of a positive has to be a welcome relief. Oxiana provided it for KCN this week, when it reported that it had made new tenement applications for iron ore-prospective ground. The Ox has been looking in Thailand for gold and base metals for some years, with the latest news suggesting it remains very comfortable continuing to work in the country. However, there’s still no sign of KCN’s lease unfortunately.
HOW any one with even a sniff of nickel can be travelling any other route than the one that takes them to their nearest happy bank manager, would be one of the more difficult questions to currently answer in the mining space. Crikey, even Murrin Murrin is making money. Which is why it’s curious that there could be any speculation around that most of the key operating personal at Cawse have tidied up their desks.
Also in the April 14 - 20, 2008 edition
- CHINA
- China Gold Inc
- ENGINEERING
- UBS gives Ausenco thumbs up
- EXPLORATION
- Exco keen to step up
- FINANCE
- Grange within range
- Show me the mining
- INTERCEPTS
- Centamin underground guidance near
- Ranger options under review
- MINING
- Crowning glory
- Escondida to mine pit wall and link with Zaldivar copper mine
- ReGENERATION
- 60 seconds with Andy Caruso
- Path leads to bigger future
- SOUTH AMERICA
- Candente to produce Canariaco feasibility in early 2009
- Nova Ventura to boost copper production
- WOMEN IN MINING
- Bloom has mixed view of changes