Tiger gets a mention in the Australian..

THINGS were looking grim on Thursday before Janet Yellen gave the markets a few more months to party.
The statement by the head of the Federal Reserve set the markets on fire by signalling interest rates would eventually rise but that moment was still a few months off − Wall Street’s equivalent of St Augustine’s famous prayer (“Lord make me pure — but not yet.”).

Before the Fed topped up the punchbowl one more time and sent the equity party roaring, copper on Thursday hit a low of $US6268 a tonne, not a comfortable place for the red metal miners. Lead hit an intraday low of $US1836/tonne, its worst day since August 2012. Tin was down 20 per cent since October 2013 notwithstanding a looming supply squeeze − although one move that caught our eye was a Hong Kong-based company, Auskong International Mining, moving into MGT Resources (MGS) with up to $4.2 million in fresh funds. The junior has the Summer Hills tin project in Queensland.

Overall, on Thursday, the London Metal Exchange index hit a 39-month low. Assuming no more dramas before December 31, lead will have turned in the worst performance this year, down 16 per cent since January 1, with tin off 14.5 per cent and copper down 14.2 per cent. Zinc and aluminium are up a little but nickel is the star, 12.6 per cent ahead.

There are opinions aplenty about 2015. Toronto’s Scotiabank is putting its money on zinc and nickel — no surprises there, as that would be very much a consensus view.

Deutsche Bank sees coking coal receiving some temporary relief “before prices fall again”. The respite is due to most producers having around 50 per cent of their costs denominated in the local currency, so the 23 per cent decline in our dollar and the rouble’s hefty fall is a relief to miners in those countries. Deutsche estimates that 30 per cent of world production is running at a loss, against 45 per cent before the oil price and currency moves.

However, Deutsche says we may to wait until 2016 before we see the much talked about jump in zinc prices. MMG in 2015 is expected to produce up to 150,000 tonnes more than expected, Glencore will add another 200,000 tonnes next year, and other small miners will be making their contribution, meaning a 7 per cent rise in global zinc output in 2015.

ANZ has a warning for resource investors: the US dollar matters, but don’t ignore commodity fundamentals. The greenback’s strength could provide a headwind for commodity prices, especially oil and precious metals, but the base metals with supply constraints should hold up relatively well.

But ANZ pulled a surprise in a separate report. It seems all of a sudden to have renewed respect for gold, noting that the metal fell 30 per cent last year but should end 2014 relatively square, having begun the year at $US1202 an ounce. ANZ expects renewed buying from India and China in 2015 providing a better base for the gold price recovery.
But it also sees silver outperforming its yellow stable mate in 2015 due to higher industrial demand. This coincides with a Silver Institute report that industrial demand for the white metal will grow 27 per cent by 2018, led by the electrical and electronics sector.

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WHILE things have been tight, some companies are still able to rattle the can. In the past few days Mineral Deposits’ (MDL) 50 per cent owned zircon-ilmenite project in Senegal has nailed down a $US50m facility with Societe Generale, East African oil driller Swala Energy (SWE) will get $US2.25m through a convertible note, while Tunisian phosphate hunter Celamin Holdings (CNL) managed to raise $7.57m through a rights issue.

Then Peninsula Energy (PEN) finalised key parts of its $69.4m raising for the Lance uranium project in Wyoming (even in a week where uranium spot fell again and Canada’s Cameco continues its ramp up at the Cigar Lake mine) while NuEnergy Gas (NGY) signed off on a $10m placement, this junior about to supply coal-seam gas to a local power station in Sumatra.

Rob Murdoch spent 30 years running junior explorers and now operates research firm Austex Mining. He argues the resources sector has not done too badly, finance-wise. Analysing all the quarterly reports for the three months ending September 30, Murdoch figures the sector raised $786m (spread among 270 companies) in those three months, $106m of which was placed by 96 companies without an established resource.

In the September quarter, the big winners among those able to raise fresh capital were nickel darling Sirius Resources (SIR) with $207.1m added to the kitty, Congo copper producer Tiger Resources (TGS) raking in $73.4m, oil producer Buru Energy (BRU) banking $31.1m, Spanish potash aspirant Highfield Resources (HFR) with $31.95m and Texas oilie Winchester Energy (WEL) cashing $20m in cheques (all figures before costs).

At the other end, Botswana Metals (BML) managed to get $3000 through the door, Texas oil play Titan Energy (TTE) attracted $6000 (although raising another $1.32m earlier this month), mineral sands and diamond explorer Astro Energy (ARO) pulled in just $11,000 and Indonesia coal play South East Asia Resources (SXI) sold $14,000 worth of new shares.

But Murdoch also notes that going tech has generally been a good move. Astonishingly, he counts around 200 resources juniors in this process. The latest of those is Galilee Basin oil and gas driller Exoma Energy (EXE), announcing Friday it was heading into e-commerce and m-commerce (the latter involving buying via your mobile) digital marketing services. Of the 200 juniors switching to tech, 53 per cent have gone up in value in the three months to November 30 as against only 21 per cent of the active pre-resource explorers and 29 per cent of those with “limited activity”, also known as “sitting on their hands companies”. Which seems to suggest investors prefer their juniors, if not going tech, to avoid any of that costly exploration work.