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down the bottom for the best bit :)
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February 16, 2010

The Presenters At Our Inaugural 2010 Minesite Forum Played To A Packed House, As Sentiment In London Continues To Look Positive.

By Alastair Ford / www.minesite.com

David Hutchins opened our 65th Minesite forum on Tuesday 16th February by telling a packed house that if and when Glencore gets round to listing it will mark the defining moment of the supercycle. It wont be next week, but it could be soon. That word, supercycle, is gradually coming back into vogue as 2010 progresses, having been banished from all respectable conversation at the end of 2008. But with China still sucking in raw materials, and India not far behind, the supercycle is back in style. And to be fair, its proponents always said there would be blips, although not many can have envisaged a blip quite the size of the credit crunch. But, as we reported on Monday, if overcapacity abounds almost everywhere in the wake of the credit crunch, one place it is not in evidence is the mining sector, where, in many areas, production is still struggling to keep up with demand. Meanwhile, uncertainty in the western world, and especially in Greece, continues to underline the attractiveness of gold as a safe haven, even if the dollar has been strengthening too.

In that context its no wonder UK investors continue to turn out in force to our forum, where the quality of the companies presenting remains consistently high, offering diversity and variety to boot. This time round, along with zinc and lead from Minco, gold from Oxus, from Vatoukoula, and from Ampella, and copper from EMED, we even managed to roll in 1.2 billion barrels of oil, 23,000 hectares of fallen lumber, and a 50 per cent share in a hydroelectric project, courtesy of the investment portfolio of Grafton Resources, run by the aforementioned David Hutchins, whos also chairman of Minesite. Grafton, which is in the process of listing in Canada via a reversal, also brought iron ore and gold to the party.

But the morning was kicked off in style, and at a rollicking pace by John Kearneys exposition of the latest at Minco, the Irish zinc company thats developing the Pallas Green property in conjunction with Xstrata. The question posed by Will Hodson from Ocean Equities at the end of Johns presentation hit the nub of where this company is at at the moment. How much additional resources, asked Will, would it take for Xstrata to make a production decision. Understandably John couldnt give a detailed answer to that question, but he was able to point to the 70,000 metres of drilling that will take place on Pallas Green this year, and to make the point that Pallas Green is Xstratas number one zinc development project in the world. Xstrata isnt the only major nosing around in Ireland either. On the same mineralized structure as Pallas Green, Teck and Lundin both have joint ventures with juniors, and sooner or later, the thinking goes, some of those companies will be taken out. Itll be interesting to see which ones remain standing.

Next up, Richard Wilkins gave a detailed update on the state of play at Oxus Gold following a major cash injection from new Chinese investor CITIC. With that new money coming in the plan is now to push the resource base at the companys flagship Amantaytau gold mine in Uzbekistan up to around seven million ounces, and to get underground and into production there by January of next year. Its hoped that the company will then be able to increase production to a projected rate of 300,000 ounces in fairly short order.

EMED Mining also has gold, but it was the copper that was causing all the interest this time round, to the point that vested Spanish business interests not entirely in favour of the current development plans at the companys Rio Tinto project in Spain had ensure that plants in our audience would ask hostile questions. EMED chief Harry Adams managed to bat these away without too much trouble, but it was a fair indication of the hard yards hes had to put in to get the Rio Tinto project to the stage where its at now, with production currently scheduled for the third quarter of 2011. And there may be a few more verbal scuffles yet before the copper starts coming out of the ground at Rio Tinto once again.

After the break came another company with which John Kearney is involved, Fijian-focussed Vatukoula Gold Mines. One of Johns other companies, Canadian Zinc, took a stake in Vatukoula back when the global markets were less benign than they are now, and back when a hostile shareholder was doing his best to upset Vatukoulas applecart. Things have stabilized since then, and Dave Paxton, Vatukoulas chief executive, has made great strides in sorting out development at the companys mine. The company produced 33,000 ounces in the year to August 2009, and is likely to produce 60,000 ounces this year. Whats more, by the end of the year, the plan is to be mining at an annualized rate of 100,000 ounces.

Finally, in a polished pitch, Ampella Minings Paul Kitto told of a company thats opening what he called a new gold province. Burkina Fasos not quite the frontier territory it once was, what with Cluff Gold, Volta Resources and plenty of others already operating successfully down there, but it was interesting to note Pauls statistic that in terms of surface area Burkina accounts for 22 per cent of the Birimian Greenstone belt which hosts all the prolific mines in both Ghana and Burkina. Ghana itself accounts for slightly less, but has produced exponentially more gold, simply because until very recently it was always a much more favourable jurisdiction to operate in. Ampellas shown that its now possible to make rapid progress in Burkina, having proved up a 1.2 million ounce resource in fairly short order. On the ASX its shares have responded too, rising from a price of less than A10 cents back in 2008 to the current price of over A70 cents. Meanwhile, in London, broker Fairfax has been a highly visible supporter. Ampella will undoubtedly be one to watch in the coming months.