quality stocks key to value holding over lt

http://www.heraldsun.com.au/business/in-the-black/quality-stocks-key-to-value-holding-over-long-term/story-e6frfinf-1226362764735
"THE latest sharp leg down in the share market courtesy of European worries is unlikely to be the last.

But it is important to keep perspective when five months of patient gains is wiped out in a matter of days. Remember that stock selection is still vital in share market success.

As tempting as it is to believe in the smug, superior timing knowledge of those barbecue show-offs who boast of "selling out of shares" with a day to spare, the best guarantee for those who stay the course and remain in the market long term is to make sure we only hold quality companies with strong prospects when the going gets tough.

That requires patience when a downturn such as this smashes share prices indiscriminately, but eventually the quality will emerge from the smallest company right up to the largest.

One stock that has caught my eye is Dart Mining, which would already be worth a lot more if its Unicorn deposit was in Western Australia than Victoria. Dart is drilling out an extinct volcano near Corryong which is shaping up as a world-class molybdenum mine with important copper and silver credits.

While moly prices may have fallen in sympathy with most commodities except for gold, there are numerous positives for the price of the steel additive in the longer term as Chinese exports tail off and world consumption rises in tandem with crude steel output.

The acid test for Unicorn will come with the arrival of a scoping study in the final quarter of this year, but the conceptual and drilling work done so far look highly positive.

Moly grades are high and metallurgical tests show impressive recovery rates of about 92 per cent plus the ability to produce separate moly and copper/silver concentrates that can be sent to Chinese and South Korean foundries.

Dart also has the advantage of strong local support for the mine, the town of Corryong, nearby power and the ability to truck containers to Albury/Wodonga for onward rail transport to the Port of Melbourne.

Another attraction is the entire open pit is virtually the ore body, with the ability to use gravity orepass shafts to transport the ore, allowing trucks to remain in the pit at all times and keeping capital spending relatively low.

Unicorn is one of a handful of so-called climax-style porphry deposits in the world which means it could be a very long-life mine with high grades continuing at depth, although the current drilling is only aiming to establish an initial 10-year mine life.

Chief executive Lindsay Ward said the company aimed to have a mine in the bottom quartile of the cost curve so Dart would stay profitable even if moly prices remained soft. There is also plenty of exploration potential with the nearby Morgan prospect plus the undrilled depths at Unicorn.

This makes Dart a speculative buy for those brave enough to buy a good mineral deposit in an unfashionable mining state at an unfashionable time.

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ONE of the bizarre features of feed-in electricity tariffs in Victoria is their availability for solar panels but not on high efficiency, gas-fed power generators such as those made by the locally listed Ceramic Fuel Cells (CFU).

When you factor in transmission losses and the significant benefits of distributed power generation, fuel cells can produce well under half of the emissions of standard electricity generators plus free hot water 24/7.

The Victorian Competition and Efficiency Commission has now recommended that the feed-in tariffs be extended to generators such as the CFU-made BlueGen unit, leading to an 8.24 per cent share spike yesterday. Similar feed-in tariffs are already available in Germany and the UK, really CFU's home market since it moved manufacturing to Germany. A speculative buy for the true believers, once the current price spike is out of the way."

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