40 thousand per tonne is nickels next stop
Thursday, 18 January 2007 MiningNews.net - Final Call
TODAY'S STORIES
$40,000/t is nickel's next stop
Thursday, 18 January 2007 Paul Garvey
A LOOMING strike vote in Canada may have pushed the nickel price even further into record territory overnight, but Australian investors appeared content to wait on the outcome of the vote before deciding to get behind nickel equities.
In the evening session of trade on the London Metal Exchange overnight, the spot price of nickel ran up another $US1900 or 5.3% to $37,400 per tonne, an all-time high.
With the price of the metal now having sat above $30,000/t since November, pundits will be keeping a close eye to see if nickel can break through the $40,000/t barrier.
Nickel's gain last night now means the price of the stainless steel additive has more than doubled in just seven months.
Last June, nickel was changing hands at just over $18,000/t – a price most nickel miners would have said they'd be happy with for years to come.
Driving nickel's latest performance was news that workers at Xstrata's Sudbury nickel operation in Canada were set to vote on a strike, a move that would put even more strain on the LME's already stretched nickel stockpiles.
Nickel stocks are now at less than 6000t, equivalent to less than two days of global supply.
Yet despite that background, nickel stocks hardly raised a whimper (see table below).
Of the key Australian producers, only Consolidated Minerals and LionOre Mining International could muster any real gains, with Minara Resources, Independence Group, Sally Malay, Western Areas and Mincor Resources all recording falls.
Away from nickel, the day's biggest gain belonged to Magma Metals, which managed to climb 24.8% after reminding the market that drilling was about to restart at its Thunder Bay platinum group metals project in Canada.
Magma won some massive market gains late last year after releasing its initial results from Thunder Bay, but the most recent news released at the start of the year prompted the company's stock to fall from 90c a share to 60c.
Hot on Magma's heels was Moly Mines, which ran up gains of 27c (24.5%) to $1.37 after being on the receiving end of a bullish brokers report out of Canada, where the company recently took out a secondary listing.
Junior explorers NGM Resources (up 22.7% at 27c) and Thundelarra Exploration (up 16.3% at 50c) both posted gains on the back of uranium-related news.
NGM announced it had secured a uranium project in Queensland - only 100 lazy kilometres north of Mega Uranium's Ben Lomund deposit - and had also successfully placed 8 million 20c shares to "New York and European institutions" and investor clients of Hartleys.
Thundelarra had issued a statement explaining in greater detail its recent decision to scrap plans for a uranium spin-off in favour of keeping the tenements within the company, which will move into cash flow with the development of the Copernicus deposit in Western Australia later this year.
Emerging mineral sands play Image Resources, meanwhile, kept feeling the good vibes stemming from yesterday's trebling of its North Perth Basin acreage.
Image's gain of 27c (12.7%) followed on from the gain of 13c it achieved after it released the news yesterday.
Not faring quite so well was Rey Resources, which slid another 2.5c (18.5%) to 11c – its lowest point since listing in June last year.
And iron ore hopeful Ferrowest continued its volatile trading of recent times, shedding 4.5c (15.2%) after yesterday posting a gain of 5c.
The most noteable move among the larger stocks belonged to gold miner Newcrest Mining, which slipped by $1.24 (4.9%) to $24.11.
The rumour swirling the market is that one of the larger brokers is about to issue a downgrade for Newcrest, which holds the title of Australia's biggest gold miner.
SHA Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
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