very positive...justifiably...litlte mentoin of Great Wetern IPO...

very positive...justifiably...litlte mentoin of Great Wetern IPO which looks promising.

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Rising minerals prices push juniors ahead
By Barry FitzGerald
Garimpeiro
February 23, 2004

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Be it gold, copper or nickel, the pace of activity within Australia's junior mining sector is running hot.

Alan Downie's rebirthing plan for the gold/copper hopeful Batavia Mining (formerly Menzies Gold) has been moving along nicely.

The group has passed all of the signposts that Downie, a former Normandy and WMC geologist, said it would have by now.

The most important achievement to date has been the increase in the gold/copper resource base at its Gullewa project in Western Australia's Murchison region to an initial 300,000 ounces of gold equivalent. Its an initial resource estimate as there is a target to double it by year end.

The 300,000 ounces of gold equivalent was nevertheless the trigger for the group to start a bankable feasibility study (BFS) into the redevelopment of Gullewa as a 60,000 ounce-a-year gold equivalent producer.

A previous scoping study by consultant Snowden Mining indicated that cash operating costs of less than $330 an ounce could be achieved.

The BFS is expected to be handed down in May and assuming the all clear, the operation could resume production in the fourth quarter through the existing treatment plant, tweaked up with a flotation circuit to maximise recoveries.


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The addition of the circuit, and the greater confidence in the quality of the resource drilled by Downie, feeds in the expectation that while Gullewa has been a heartbreaker in the past it could be a sweet performer this time. Copper's price run to $US1.30 a pound will certainly help.

Batavia's shares closed weaker on Friday at 12¢, valuing the group at $16.8 million. Recent share price weakness - it was 14.5¢ a month ago - reflects the expectation that a share placement and rights issue, pitched at about 11¢ a share, is on the way.

The expected fund raising will get the group through the BFS stage and allow it to maintain an aggressive exploration program.


The copper price is red hot and could get a lot hotter if predictions for a global supply deficit this year of the metal prove correct.
The copper price is red hot and could get a lot hotter if predictions for a global supply deficit this year of more than 850,000 tonnes of the metal prove correct.

Booming Chinese demand and a resurgent US economy are reducing stockpiles at alarming rates, with the resultant scramble for supplies driving the price 35 per cent higher since the start of the year.

Even after a technical sell-off on Friday in overseas markets, the metal was still holding at more than $US1.30 a pound. All that is great news for copper-focused juniors like Exco Resources and Universal Resources.

Both have been working away at their north Queensland exploration properties with a view to making the transition to producer status in the near term. They already had a good chance of doing just that when copper was US80¢ a pound.

Exco is now knocking on the door of 30¢ a share after averaging about half that for the past 12 months. Universal is nearing 20¢ a share, again twice its average of the past 12 months.

Because of the hard yards put in when the copper price was down in the dumps, both companies are in a position to serve up good copper stories at a time when the market gives them red alert treatment.

In the case of Exco, it is the expected (substantial) resource upgrade next month at its Mount Margaret project near Cloncurry and a subsequent move of the project into the feasibility study stage.

Universal released an upgraded resource for its Roseby sulphide project earlier this month, as a well as a scoping study that came up with a net present value of $74 million for a conceptual mining and treatment operation.

After the resource upgrade, Universal is within easy reach of its target of a 20 million tonne resource with which to kick off a development. Yunnan Copper of China likes Universal's chances as it has already put its hand up to take the project's production.

The nickel price boom will spawn more junior exploration floats this year than you can poke a stick at.

One of the latest new arrivals is the $2.8 million initial public offering in Great Western Exploration.

In a classic case of nearology, Great Western's appeal is its ground position adjacent to Western Areas' Flying Fox/Diggers South nickel discovery on the Forrestania greenstone belt in WA. Western Areas is now a $140 million company.

Great Western's share register will be as tightly held, with only 26.95 million shares on issue on completion of the IPO.

At the issue price of 20¢ a share, it will be capitalised at $5.3 million.


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