MMX 0.00% 4.7¢ murchison metals ltd

murchison shares slump

  1. 5,276 Posts.
    lightbulb Created with Sketch. 2127
    THIS IS THE REASON WHY MMX HAS DROPPED SO FAST



    Murchison Shares Slump on A$3.5 Billion Project Funding Concern

    Sept. 18 (Bloomberg) -- Murchison Metals Ltd., seeking to develop a A$3.5 billion ($2.8 billion) iron ore project with Japan's Mitsubishi Corp. fell to its lowest in almost two years in Sydney trading on concern borrowing costs may rise.

    Murchison slumped 18 percent to A$1.085 at 1:39 p.m. Sydney time on the Australian stock exchange, its lowest since Dec. 4, 2006. The stock has dropped 45 percent this week and has a market value of A$443 million. Mitsubishi fell 2.5 percent to 2,325 yen in Tokyo.

    Asian stocks slid to the lowest level in three years as credit markets seized up, pushing the corporate bond default risk to records in the region today. Perth-based Murchison and Mitsubishi will need as much as A$2.5 billion in debt to fund the Oakajee port, rail and mine project in Western Australia, John Veldhuizen, a resources analyst at BBY Ltd., said today by phone from Sydney.

    ``These are large, hungry, capital intensive projects which need lots of money,'' Veldhuizen said. ``It is just a total crisis of confidence.''

    An initial study into developing the Oakajee project is scheduled to be completed by the middle of next year and, if approved, the port may open as early as 2012. Murchison and Mitsubishi won a tender to develop the port in July, beating a rival proposal from a China-backed venture.

    Calls to John Westdorp, Murchison's chief financial officer, were not immediately returned.

    The port will be able to ship 35 million tons of iron ore a year and construction may start in 2010, Christopher Eves, chief executive officer of the Oakajee Port & Rail Pty venture, said July 30. Contract iron ore prices have risen for six consecutive years and will gain 18 percent in 2009, Goldman Sachs JBWere Pty said in a Sept. 16 report.

    To contact the reporter on this story: Jesse Riseborough in Melbourne at [email protected]

    Last Updated: September 18, 2008 00:58 EDT
 
watchlist Created with Sketch. Add MMX (ASX) to my watchlist

Currently unlisted public company.

arrow-down-2 Created with Sketch. arrow-down-2 Created with Sketch.