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Stocks to Watch


Stocks to Watch

APRIL brings the start of a new quarter and many will be hoping for an improvement in conditions. MiningNewsPremium highlights what to look out for this month.

Needless to say, a close eye will be kept on the iron ore and nickel prices, which are at 10 and six-year lows respectively.

Analysts remain bullish on nickel, while Citi expects $US50 a tonne to be the floor price for iron ore.

It’s quarterly reporting season once again, but there should be plenty of other action, potentially in the merger and acquisition space.

Next week Glencore is allowed to re-approach Rio Tinto over a megamerger but commodity prices have made it less likely than when Glencore first got rebuffed last year.

Things are getting particularly interesting in the gold sector with Barrick Gold putting Porgera and Cowal up for sale and Newcrest Mining reportedly appointing advisors for a possible sale of Telfer.

Evolution Mining executive chairman Jake Klein told MNP last week in Hong Kong that up to half of Australia’s gold production could change hands in the next two years.

Evolution confirmed it was in talks with Egyptian-owned La Mancha Resources over the Frog’s Leg and White Foil mines in Kalgoorlie.

But a deal could trigger a bidding war with Northern Star Resources, which owns the Kundana mine adjacent to the La Mancha ground.

Speaking of wars, Northern Star will face off with Metals X on April 13 at a Tanami Gold extraordinary general meeting in Perth to vote on the miners’ rival offers for the Central Tanami gold project.

The outcome looked clear-cut given Northern Star’s higher offers but Metals X is taking legal action to protect its rights to the project.

Other miners like Independence Group, Regis Resources and OceanaGold are among the gold companies thought to be on the hunt for assets.

Norton Gold Fields, which is being taken over by Chinese major Zijin, is also actively looking for projects.

Outside gold, mid-tiers like Western Areas and Sandfire Resources have also indicated that the distressed junior market makes it the right time to pick up “stranded” assets.

OZ Minerals last month sold its $A125 million stake in Sandfire, which Credit Suisse speculated may be part of a move to acquire another asset, with Carrapateena on the nose with analysts at current copper prices.

The outlook for OZ under new boss Andrew Cole will become clearer this month when the company announces the results of a company-wide strategic review.

OZ already announced the relocation of its office from Melbourne to Adelaide and MNP understands employees were set to find out their fate last week.

Also in copper, PanAust is yet to formally respond to a takeover offer from its largest shareholder GRAM and market watchers believe the emergence of a white knight bidder at this stage is unlikely.

Separately, Dutch trading giant Trafigura has been creeping up the register of Highlands Pacific – PanAust’s partner at Frieda River in Papua New Guinea.

In other news due out this month, Cassini Resources will release the scoping study for its Nebo-Babel nickel-copper project, which is expected to validate the company’s strategy of targeting a smaller, higher grade start-up mine.

Dacian Gold is due to release a resource for its Jupiter deposit, while Havilah Resources will start up its Portia gold mine at Broken Hill.

Next week an update from Fifth Element Resources is due on whether it managed to satisfy ASX listing rules to remain on the board.

And fellow New South Wales explorer Alt Resources will be looking to join the list after completing an initial public offering.


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