Resources awash in cash. THE DIRT: Robin Bromby | July 28, 2009...

Resources awash in cash.

THE DIRT: Robin Bromby | July 28, 2009
Article from: The Australian.

IF you landed here today from Mars, you couldn't be blamed for thinking that we were setting off on another bull-market run.

Stock markets are soaring, investors are falling over each other to get back into the market, and speculation is alive and well in the resources sector once again.

You would, having been on Mars for a few months, have missed the recent news that the US taxpayer could be on the hook for as much as $US27.3 trillion ($33.17 trillion) after the stimulus package is done, that Australia is heading for straightened circumstances, according to Kevin Rudd, and that a big question mark still hangs over the outlook for metals demand.

While the general equities markets are off to the races, there’s a definite sense of bullishness among the junior resources sector - and this comes within six months of almost everyone in that sector being down in their boots.

The money-raising seems to be unstoppable - again, just months after some analysts and industry figures were saying that as many as 100 juniors would go to the wall because they would run out of cash.

Tell that to the “sophisticated investors” who have just put up $2 million to allow Trafford Resources (TRF) to exercise 3.6m options in Robust Resources (ROL), and to resume drilling at its own Telephone Dam uranium project in South Australia.

Trafford discovered the uranium at Telephone Dam (west of Whyalla and Iron Knob) while it was exploring lead-zinc and silver targets. The company was surprised when drilling returned uranium values up to 0.061 per cent.

Newland Resources (NRL) is to issue 189m new shares under a rights issue to raise $1.9m. The money is needed to explore its Georgina Basin tenements west of Mount Isa, which are prospective for uranium and phosphate. Plenty of both has already been found in the basin by other explorers (including Joseph Gutnick's large phosphate deposit).

Shareholders will no doubt be interested in taking up the $1.95m entitlements issue proposed by Venturex Resources (VXR). This is the company (formerly Jutt Holdings) that earlier this month reported some impressive drilling results from its Liberty-Indee project in the Pilbara. The intersections included 20m at 3.43 per cent copper, 6.47 per cent zinc, 65 grams/tonne gold and 1.73g/t silver, and another of 17m at 4.16 per cent copper, 8.7 per cent zinc, 66g/t gold and 1.03g/t silver.

The writer implies no investment recommendation and this report contains material that is speculative in nature. Investors should seek professional investment advice.

http://www.theaustralian.news.com.au/business/story/0,28124,25846309-15023,00.html