Minews. Good morning Australia. It looks like you had a busy week.
Oz. There was plenty happening, though the end result was nothing to write home about. Overall, mining shares, as measured by the metals index on the ASX, managed rise of less than 0.3 per cent, which was a surprise given the level of publicity that the sector was getting, courtesy of the annual Diggers & Dealers conference in Kalgoorlie, and given some rather solid upward moves by smaller companies. But ot even a nice rise in the gold price and a slight decline in the exchange rate, could take away the feeling that we went nowhere last week.
Minews. Was it the mining majors which kept a lid on the indices?
Oz. No, both BHP Billiton and Rio Tinto managed to rise marginally. It was more a case of the good work on three days being offset by damage done on two bad days, especially Friday, when most of the gains were wiped out by a two per cent decline in the metals and mining index. Perhaps with this week’s review we should focus on individual stocks because there really isn’t a dominant trend to discuss. So how about starting with a look at how companies on display at the Diggers conference performed?
Minews. Presumably they reacted positively on their day in the spotlight, and then tapered away?
Oz. That was pretty much the case, though there were a few which hung on to their gains. Troy (TRY) was one of the stars, choosing Diggers as the forum to announce a major reduction in the capital costs of development at the newly-acquired Casposo gold project in Argentina. The ability to marry a mothballed processing plant with the orebody has produced a 47 per cent cut in the capital outlay to just US$45 million. That, following on from earlier news of fresh gold discoveries at the company’s Sandstone operations, suddenly woke investors up to the reality that Troy is on the way to becoming the operator of three gold mines, rather than just the one which looked likely a few months ago. On the market, Troy added A22 cents to end the week at A$1.72, having touched A$1.74 during Friday trade. The stock is now just a few cents short of its 12 month high of A$1.83, reached last September.
Chalice Gold (CHN) was another company flying its flag at Diggers, and while there was no formal presentation Chalice’s chairman, Tim Goyder, was busy spreading the news that the company’s merger with Sub-Sahara Resources is close to completion. That helped Chalice trade up to a fresh 12 month high of A33.5 cents, before it eased fractionally to close at A33 cents for a gain over the week of A4 cents.
Meanwhile, Silver Lake (SLR), which has become one of the darlings of the gold sector thanks to its no-frills approach to mining, also attracted a great deal of interest, adding A3.5 cents to A73.5 cents.
SLR Price at posting:
73.5¢ Sentiment: None Disclosure: Not Held
