Around the Traps ... with THE FERRET 08:10, Tuesday, 18 January 2005
Sydney - Tuesday - January 18: (RWE Australian Business News) - ******************************
If KNIGHTS INSOLVENCY ADMINISTRATION (KIA) warns it is facing a loss of $3 million in the December half because it's the outcome of a "difficult insolvency market", is that good news for the rest of us?
That is, not enough insolvency?
Knights says it's had a contraction of revenue due to the decrease in quantity and the quality of the insolvency administrations compared with previous periods.
But hang on, don't count your chickens, Knights expects "a substantial recovery" in the second half.
Knights shares plunged 23c to 33c.
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RANGE RESOURCES (RRS) fell 1.7c to 3.8c last Tuesday after it announced that the potentially nickeliferous sulphide occurrence at Forrestania (which had sent the shares soaring a week earlier) had been shown to be very low-grade nickel and not of economic significance.
The price has continued to spiral downwards.
Yesterday it plumbed 2.9c before closing at 3c, due to an announcement it had placed 41 million shares at 2.5c with free attaching options.
The funds will be used to increase the scale of drilling operations at Forrestania and Donnybrook, fund further acquisitions in the Forrestania area and for working capital.
This time, none of that low-grade nickel, not of economic significance stuff, please.
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Last August IWL (IWL) forecast a 15 per cent rise for this financial year when the shares were $2.10.
In November it upped the forecast rise to 25 per cent when the shares were $2.28.
Yesterday it said the first-half result (due to be announced next month) would be up 43 per cent and the stock rose 20c to $2.46.
This is a solid gain, but still relatively restrained compared with the wild reactions you see in many other stocks, sometimes predicting simply double-digit growth.
CEO Otto Buttula said, "Although it is too early to accurately determine our full-year earnings expectations, we do expect a record full-year earnings result, with another period of strong earnings growth expected to be recorded over 2HFY'05."
The interim result will be released next month.
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Last week WMC RESOURCES (WMR) said the Xstrata takeover bid for it was "materially inadequate".
It had us pondering whether an investor should consider that to be more or less inadequate than the more usual description of unwanted offers as "totally inadequate".
Now SOUTHCORP (SRP) has given us yet another example of takeover language.
Yesterday it described the $4.17-a-share takeover offer from FOSTER'S (FGL) as "inadequate and opportunistic".
Southcorp CEO John Ballard explained it was "opportunistic" because it came at a time when Southcorp's earnings were depressed and before the full realisation of the benefits from the Veraison and Asset Review projects.
"Opportunistic" - Foster's shareholders might retort - would have been a year ago when Southcorp was on its knees at $2.60.
It was still around $3 six months ago.
Southcorp shares rose 36c to $4.61 yesterday and went as high as $4.76.
Foster's shares plunged 43c to as low as $5.22.
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A week ago we wrote that POLARIS METALS (POL) was playing a "hey, look at me" game by issuing a press release saying, "Lake Jeffries prospect boosted by WMC RESOURCES/FALCON MINERALS Collurabbie Hills results" ... and that it had taken Polaris a long time to get around to it, seeing as how the Collurabbie Hills bonanza had been announced two months earlier.
It started working straight away, however, with the shares putting on 0.3c to 18c.
It's kept working.
The shares hit 24c yesterday before closing at 22.5c, up 2.5c.
This followed a promising report on the company's iron ore interests ... Lake Jeffries didn't get a mention.
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BILLABONG INTERNATIONAL (BBG) rose 19c to a record $12.49 yesterday before closing at $12.40.
Must have been news that former FOSTER'S boss Ted Kunkel had been elected chairman (beer and wine ... surfwear and accessories ... yeah, we can see it).
Or it could have been that piece in the weekend papers about the surfwear business was booming that we wrote about a week ago.
The story quoted one young female person as saying she regularly spent $200 of her $460 income on surfie tops and shorts and we observed that this seemed to make Billabong a licence to print money.
The shares were then already a record $11.71 and up from $6.85 a year ago.
With Billabong headed for EPS of 56c, future p/e is now more than 22.
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HAOMA MINING (HAO) says test work on Bamboo Creek gold and silver bearing ores since the December 14 annual meeting has established that a major difficulty in the recovery of gold from Bamboo Creek ores is caused by the formation of a coating on the gold when using a conventional cyanide extraction process.
This coating inhibits cyanide leaching, resulting in poor gold recovery.
Researchers from The University of Melbourne have been working to identify the coating and through X-ray Photo-correlation Spectroscopy (XPS) found that a silver carbonate compound is largely responsible for the problem.
This is a breakthrough that has led to a new leaching process which removes the coating called the New Elazac Process.
Lab results have been encouraging with direct application to the Bamboo Creek plant.
Unfortunately for Haoma, the New Elazac Process intellectual property is owned by Elazac Mining Pty Ltd, a company associated with the directors of Haoma Mining.
However, Haoma is entitled to use the knowledge from the Provisional Patent and all related intellectual knowledge for no fee.
The shares rose 0.5c to 11.5c.
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