ferret's stock to watch: consolidated rutile limit

Sorry, wrong code first try.

Ferret's Stock to Watch: CONSOLIDATED RUTILE LIMITED
07:59, Friday, 15 October 2004



A COMPANY THAT SEEMS UNDERVALUED BY THE MARKET


Sydney - Friday - October 15: (RWE)
***********************************


OVERVIEW
********

The sharemarket did not seem kindly disposed to Consolidated
Rutile yesterday despite the company predicting a good result for the
full year.

The shares barely moved because shareholders could not see much
in it for them while the company is being controlled by parent Iluka
Resources with a 50.3 per cent stake.

Consolidated directors said the improved production performance
in the second quarter 2004 was sustained in the third and is expected to
continue for the rest of the year.

"Market conditions for rutile, ilmenite and, in particular,
zircon continued to improve and 2004 production is fully sold," the
company said.

"Further improvement is expected in 2005.

"As a result of the above performance, profit after tax for 2004
is anticipated to be in the range of $14 to $18 million."


SHARE PRICE MOVMENTS
********************

Consolidated Rutile shares yesterday crept up 0.5c to 39c Rolling
high for the year has been 69.02c and low 34c. Directors did not declare
a final dividend for the year ended December 31,but paid f a special
dividend of 16 cents per share, on May 3, 2004, followed by a 9 for 19
rights issue at 34 cents per share to finance the special dividend.

In the half year report directors pointed to an 18 per cent
increase in rutile and zircon production, a shutdown at Ibis for upgrades
prior to the transition to the Enterprise ore-body,
significant improvements in throughput rates at the Yarraman mine and
supplementary dry mining operations at both the Ibis and Yarraman
deposits.

The company achieved a profit after tax of $6.7 million in the
first half of 2004, a decrease of $0.4 million (6%) compared with the
corresponding period in 2003.

The result for the first half of 2003 included $6.1 million
of profit from the sale of real estate.

While profit after tax decreased, profit from continuing
operations before interest, tax and depreciation for the first half of
2004 increased by $4 million (80%) compared with the first half half of
2003 to $9.0 million after capitalisation of $3.7 million of net
development costs associated with the transition to the Enterprise
deposit.

The Company has continued to place significant emphasis on
research and development.

Recent activities have focused on face fall mitigation
and slimes management along with a dust reduction
programme at the Pinkenba dry mill during 2003 and 2004.

This work continues and outcomes are encouraging.


Company pursuing insurance claim
*********************************

Meanwhile at the annual meeting in April chairman Mr Mike Folwell
told shareholders the company's 2003 production performance reflected a
19.3 per cent reduction in rutile and zircon output compared with 2002
levels.

This was primarily due to hard cutting at both mines and a three
month shutdown of the Yarraman dredge for repairs following damage to the
cutter head which was trapped in the mine face at the time of a face
fall.

The company is currently pursuing an insurance claim for loss of
profits relating to the Yarraman dredge damage and subsequent production
constraints.

Consolidated is in the process of negotiating a final outcome
with its insurer.

Any insurance recovery is likely to be brought to account in the
2004 year.

In order to minimise the impact of the three-month Yarraman
shutdown, supplementary dry mining commenced in the first week of
September within the existing Yarraman dredge mine path, feeding ore via
a slurry unit to the Yarraman floating concentrator.

Supplementary dry mining was also commenced at the Ibis mine in
October 2003.

The chairman also told the meeting the The Ibis/Enterprise plant
will be mining in an area between the Ibis and Enterprise ore bodies in
2004 and until mid- 2005, where the mineral
grade is below cut-off grade.

The net cost of dredge mining, after offsetting the value of
mineral produced, will be capitalised as part of the development costs of
accessing the Enterprise ore body.

These costs will be amortised over the life of the mine once
commercial production in the Enterprise ore body commences in mid 2005.


BACKGROUND
**********

Consolidated Rutile is 50.3 per cent owned by Iluka Resources , a
global mineral resources entity.

Iluka was formerly known as RGC and in 1998 took out Consolidated
as well as a 75 per cent interest in Koba Tin in Indonesia and 50 per
cent share of Narama Coal in New South Wales.

Consolidated is a major minerals sands company in its own right,
producing rutile, ilmenite and zircon.

The company's main base is on North Stradbroke Island near
Brisbane in Queensland.

Reserves at December 2003 were calculated at 0.929Mt rutile,
2.951Mt ilmenite and 0.747Mt zircon using a 0.7 per cent heavy minerals
cut off grade.

Resources up to the same period were estimated at 1.778Mt rutile,
5.801Mt ilmenite and 1.428Mt zircon.

Its Pinkenba dry mill is located on the mainland in Brisbane,

Queensland and processes about 200,000tpa of non magnetic and run
of mine (ROM) ilmenite concentrate.

Consolidated's parent company Iluka markets its products.

ENDS

Copyright © 2004 RWE Australian Business News. All rights reserved.

>>>>>>>>>>>>>>

Cheers,

Fig Jam

I don't hold CSM