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Chairman Blood turns the tables as MKY morphs again Font Size: Decrease Increase Print Page: Print PURE SPECULATION
Robin Bromby | January 27, 2007
IT'S very hard to know what is going on out there, especially when there's uranium involved. That was the case with MKY Corp on Tuesday when this resuscitated vehicle revealed it was the newest uranium player on the block. In all, 51.9 million shares went through on the day.

But the price fell 25 per cent to 6.8c. Yet it had been rising steadily all January, moving slowly but surely from 5.9c to 9.1c, including an 8.3 per cent upward spike the day before the announcement. Then it was official to the ASX: MKY was turning itself into a uranium company. Seemingly good news for a share price, but the only problem was that its few assay results were less than flash so it may be that traders are starting to look more closely at what is actually in the ground.
MKY had two name changes last year (it was formerly Creatable Media and then McKinley Co) and will soon be Queensland Uranium. MKY had been in administration after its business - selling advertising on tables in food halls - had, not surprisingly, failed to produce the expected cash flow. The company's new chairman, Alan Blood, is prepared to hand that business back to the former owners for nothing, just to get rid of it.

Blood was last involved with a public company back in the 1990s when he was a director of the then Falcona Exploration & Mining (now Newland Resources) but has been working privately since, most notably in the Victorian coal to liquids project until his interests were bought out by Anglo American.

His other iron in the fire has been a package of five tenements in northern Queensland that will now form the basis of Queensland Uranium. Assay results from one of those areas averaged just 0.069 per cent but Blood is encouraged because the results from nine samples suggest the mineralisation is widely spread.

The other newcomer to uranium this week was PocketMail Group which is buying exploration projects in South Australia and Queensland. This company does have its roots in the mining sector. Before going into the business of selling hand-held email devices, PocketMail was known successively as Mining Corp of Australia, Target Mining and Asia Gold Mining.

But a funny thing happened on the way to the announcement. On January 12, the ASX queried the company after there was a sudden trading spike in both volume (from 6 million on January 11 to 28.8 million on the 12th) and price. PocketMail assured the ASX it was "unaware of any information concerning it that has not been announced which could explain the recent trading in the securities of the company".

Just six business days later the uranium deal was all bedded down. In answer to a further ASX query on Thursday, PocketMail said the proposed acquisition had been discussed with its corporate adviser on December 20 but they met the vendor for the first time on January 15. All that trading on the preceding Friday must have just been a lucky guess by a few investors.

PocketMail did not return our phone calls.

WHILE buying a uranium project, however greenfields and unexplored, is usually a tonic for your average languishing stock, selling same can lead to distress, as Glengarry Resources found on Thursday. And it seems some people might have got the wrong end of the stick in the lead-up to the announcement and lost some money. Poor dears.

The now familiar trading upsurge started on Tuesday, when 6.5 million shares went through against 2.7 million on Monday, and then on Wednesday 21.3 million traded, and the price ticked up for the third day in a row.

But Glengarry's news on Thursday was that it had sold off Queensland uranium assets to the ever voracious Canadian Mega Uranium in return for shares and a royalty. That day 29.4 million shares went through but this time the price was downward by 25 per cent to 6.9c.

BEFORE shareholders in Highlands Pacific start whooping and throwing their hats in the air over the big deal with Xstrata, they should realise that any revenue could be many, many years away. One of the conditions of the Swiss-controlled acquirer getting 81.82 per cent of the Frieda River copper-gold project in Papua New Guinea is that Xstrata has until 2012 to complete a feasibility study.

A great deal of water could go under the copper bridge by then. Just ask Roderick Smith at Precious Metals Australia what happens when Xstrata's metal priorities change. It closes down a vanadium mine in Western Australia, cuts off PMA's royalty stream and razes the site, that's what.

Xstrata has plenty of shorter-term copper projects. Last month it exercised an option over 62.5 per cent of the Tampakan project owned by Indophil Resources and where a pre-feasibility study has been completed. Then there's El Morro in Chile where feasibility work is well-advanced, El Pachon in Argentina where the first feasibility study is being finished off, and Las Bambas in Peru where resource drilling will be completed this year.

It was not a good news week for Highlands. The market also didn't like the company's problems at the Kainantu gold mine, shares closing on Thursday at a three-year low of 27.5c.

TOM Kenyon is a member of South Australia's House of Assembly and he'll be at the ALP conference in Sydney when the party meets to review the three-mines uranium policy. He won't have a vote, but, if he did, it would be for an end to the ban on new mines.

But Kenyon, who was previously an adviser to the State Mines Minister, worries about investors getting ahead of themselves, especially throwing money at West Australian uranium plays.

He doubts whether the West Australians will go along with the changes and believes the ban on uranium mining in that state will remain. His reasoning: Premier Alan Carpenter said he would go to the next election with the mining ban as part of the policy and - on a more realistic level - WA gets such huge money from iron ore royalties it can afford to keep the relatively small uranium resource locked up. So, he advises, think carefully before punting on a change in the near future. A new policy at federal level doesn't mean each state has to follow suit.

Two things to watch next week. Agincourt Resources is in a trading halt. Best bet: they've found an institutional home for Newmont Mining's 20 per cent which the global major has been anxious to unload. And Korab Resources will tell its shareholders the details of the uranium and thorium IPO spin-off.

The Australian implies no recommendations regarding any of the stocks mentioned. The author does not own shares in any of the mentioned securities.

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