todays australian, page-2

Thanks Booey...article below for those interested:

Article from: The Australian
AT one stage, Swiss bank UBS held about 4 million shares in mineral sands play Image Resources (IMA).

It started selling late last year at around the $2 mark, having accumulated some of that stock for as little as 25c a share.

It was a happy move for UBS in terms of turning a good profit but it was only a partial sell-down. The Swiss kept a presence on the Image register presumably waiting to see how the heavy minerals find worked out.

Since then, of course, things have turned a little sticky at the Zurich office. Not only has UBS pulled out of the commodities business but, thanks to the global financial collapse, there was a sudden and urgent need to lay hands on as many readies as possible.

Well, UBS has now sold the last of its shares in Image. As of Friday's close, there were only 35,000 IMA shares being offered for sale -- about $13,600 worth -- but a good queue of buyers. Most juniors would sell their mothers to get some buyers, so Image is now back in a happy position. The stock closed at 39c on Friday, moving upward from its 23c low last month.

This column has gone a bit quiet this year about Image after having talked up the Cooljarloo mineral sands project in Western Australia. The grinding slide of the share price generated a few doubts in our mind.

But there was reassurance during the week with the release of a scoping study for this North Perth Basin project. It shows that the project is a goer and the company has options -- stand-alone dry mining or dredging or bringing one of the heavy mineral majors already operating the neighbourhood. And this study covers only 20 per cent of Image's landholding in thearea.

It can be made more attractive if further exploration establishes there's enough high-quality ilmenite to sustain synthetic rutile production, but in the meantime there is plenty of zircon there. Zircon is almost alone among metals as having the potential to put on further price gains next year.

It is not so much that demand is soaring, but that supply can't keep up with orders. According to Perth-based titanium sector analyst TZ Minerals International, zircon is likely to average between $US760 a tonne and $US800/tonne in the second half of 2008, but is looking like being between $US900/t and $US940/t next year. Iluka Resources (ILU) produces 37 per cent of the world's zircon and its stockpiles are close to exhausted.

The global shortage has been exacerbated by the gas explosion in the west and a permanent decline in Indonesian production. At the other end of the supply chain, there is still robust buying by Asian ceramics and Chinese zirconia manufacturers.

Mind you, Image, which is still exploring, will need to get a wriggle on. TZ is predicting zircon will come into surplus by 2012. One big contributor to this will be Iluka bringing its big Eucla Basin discovery into operation.