Robin Bromby | September 14, 2009 Article from: The Australian...

Robin Bromby | September 14, 2009

Article from: The Australian

IT had to happen - you just can't see a stock go from 10.5c to 54.5c in a month and not expect the pull of market gravity to emerge at some stage.

Western Desert Resources felt that pull today, even though it was out there with more good news. That news was from its Roper Bar iron ore project in the Northern Territory where drilling has expanded the known area of direct ship ore, with the latest intersections including 26m at 62 per cent iron ore. The mineralised zone is open both along strike and at depth.

But, as of writing, WDR shed 4.5c this morning. Profit taking, presumably. Certainly a breather for a stock whose chart for the past week looks like the north face of the Eiger. However, there is no ignoring the story here. So far, WDR has established high grade mineralisation over 2km along strike and down as far as 90m.

The deposit is about 200km from the Tarcoola-Darwin railway line. This is not necessarily a problem - emerging phosphate producer Minemakers is looking at building a 250km-long line from its Wonarah project to connect with the Darwin line, so a big enough deposit can justify such infrastructure.

Remember, too, that WDR has as a partner the Japanese in the form of Itochu - based in Osaka, this trading house is one of the world’s biggest companies (it has more than 1000 subsidiaries).

WDR, notwithstanding its name, has its focus on the Northern Territory. It owns 11.5 per cent of Thor Mining which has the Molyhil molybdenum-tungsten project north of Alice Springs, along with a joint venture with TNG at the Rover gold-copper project near Tennant Creek.

That project is adjacent to ground held by Westgold Resources which last week reported some bonanza grades, including 7m at 185 grams/tonne gold and 1m at 3.7 per cent copper.

But another neighbour is Adelaide Resources. The Westgold drilling was just 5m from the ADN boundary.

And Adelaide Resources is another of those stocks on a steep climb. Last week it went from 13c to 29c on the back of the gold-copper news, and also its new uranium alliance with Southern Uranium. Adelaide Resources earlier sold off its mineral sands and iron ore projects, and is now concentrating on gold and uranium. It was up another 2c at one stage today.

But the big tearer this morning was Noble Mineral Resources - its shares more than doubled early in trading, hitting 33c on news of promising exploration results at its Ghana gold discovery. The West African story is one of the biggest things in gold at the moment.

So, even when the market is down more than 40 points, the punters are bidding up the likely lads of the exploration sector. Including copper driller Sandfire Resources which put on another 17c to a morning high of $2.37.


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