Copper tops 29/08/2006 Merger madness Super rush The...

Copper tops
29/08/2006




Merger madness
Super rush
The Speculator: David Haselhurst
The Innovators



Things are looking up for Golden Cross, while last week's shale hopeful is set to revolutonise energy production. David Haselhurst is beaming.

Copper hopeful Golden Cross Resources (ASX code: GCR) is so confident that its low-grade prospect near Orange, NSW, will prove a winner that it has arranged to fly broking analysts up to look at the site late this month. The ploy could well generate interest in its securities ahead of the September expiry of 107.7 million options at 5¢ each. That will nicely add $5,380,000 to Golden Cross’s cash balance at June 30 of $2,625,000. It will also boost issued shares to 464.8 million.
The stockmarket refrained from entering a trading frenzy when the company reported on August 8 that it had boosted its indicated and inferred resource estimate at Copper Hill. The increase of 31 million tonnes takes the new estimate to 136 million tonnes, with a cut-off grade of 0.2% copper. That’s a lot of dirt, but the grade is comparatively thin at 0.33% c-opper and 0.32 grams/tonne gold. There’s a total of 455,000 tonnes of copper and 1.4 million oz of gold, which converts to a gold equivalent grade of 1.09g/t.

The estimate was compiled by Hellman & Schofield for a pit optimisation study due soon. Ahead of that, managing director Kim Stanton-Cook said: “It is already clear that in the first few years over 25,000 tonnes of copper and 80,000oz of gold could be produced annually.”

Last week the company came up with good news from drilling at Copper Hill North, 400m north of the main deposit and outside the optimised pit area. The first deep hole to be drilled has intersected from 12m-200m typical Copper Hill mineralisation of 0.39% copper and 0.16g/t gold. But core drilling below 200m claims to have entered a structural domain of a rare porphyry intrusion, similar to that of the Cadia and North Parkes mines, also on the Lachlan fold belt. Mineralisation continued to a depth of 470m, but from 270m-470m it improved, with visual estimates from on-site geologists of 2%-3% chalcopyrite (copper ore) throughout. Drilling continues, and first assays are due in the next three weeks. Stanton-Cooke said: “This is the first evidence we have that Cadia and North Parkes-style porphyries are present at Copper Hill and it’s a good sign for the future.”


Oil shale twins Greenvale Mining and Esperance Minerals confirmed the take-up of a new American technology (B, Aug 22) to slash pollutant emissions from coal-fired power stations through burning a mix of pulverised shale and thermal coal.

The two Australian companies have acquired exclusive rights to the tech-nology for Australia, New Zealand, India and Japan in return for a royalty of 3% of gross revenue on the sale of shale to plants using the technology. The royalty will be payable to Mobotec USA, a company established in the early 1990s to focus on combustion efficiency and emissions solutions. Mobotec won a world licence on the technology from the Idaho National Laboratory, one of 11 such centres owned by the US Department of Energy to develop technology to license to the private sector for exploitation.

The process involves injecting crushed oil shale and coal into boilers to eliminate sulphur dioxide emissions by 50%, nitrous oxides by 70% and mercury compounds by 90%. Mobotec director Brian Higgins said a 250MW power station burning $US5.5m ($7.2m) worth of shale a year could partially replace coal costing $US4.7m. It would generate savings of $US4m on nitrous oxide emission penalties and another $US3.3m on sulphur dioxide reduction. He believes the process has the potential to replace 5%-15% of the energy derived from coal in the world’s thermal power stations with shale.

Leslie White, joint chairman of the Australian companies, sees an initial project in Queensland to mine 50,000 tonnes of shale a day at a cost of about $US18/t landed at Gladstone for shipment. The gross profit margin would be $US12/t. He believes a prime export target will be India.

We have locked in further profits on Quickstep and shed minor investments in Goldsearch to reduce debt. We still like the companies, but need to trade so we can write about others.





HOW THE PORTFOLIO STANDS
COMPANY BOUGHT COST ($) NOW ($)
7000 Amadeus Energy AMU 13.05.05 av.73 1.09
20,000 Rey Resources REY av .104 .175
5000 Northwest Jan '08 ops NWRO 23.11.05 free .10
15,000 Image Resources IMA 9.01.06 av.39 .50

20,000 Hillgrove Resources HGO 23.02.06 .17 .23

20,000 Navigator Resources '07 ops NAVO 2.03.06 .052 .10

30,000 Eastern Corp ECU 16.03.06 .064 .06

10,000 Giralia Resources GIR 5.04.06 .41 .29

100,000 Longreach Oil LGO 4.05.06 .018 .027

5000 Reed Resources RDR 4.05.06 .49 .45

2128 U308 deferred UTO 9.05.06 free .40

5000 Meteoric Resources MEI 20.06.06 .24 .25

3000 Greenvale Mining GRV 22.06.06 av 1.26 1.45

10,000 Quickstep Holdings QHL 22.06.06 .215 .545

20,000 Discovery Nickel DNL 6.07.06 .21 .26

12,000 Australis Aquaculture AAQ 1.08.06 .40 .46

110,000 Nuenco NEO 3.08.06 .018 .02

40,000 Golden Cross Resources GCR 1.08.06 .077 .077
Total value of portfolio $63,281
Owe the bank - $6,910

TOTAL $56,371

Portfolio change since Dec 30, 2005 +87.9%