A thread set up and dedicated to Gold and Mining stocks.

Gold could be set to bounce up again in the near future and throughout the autumn and winter. Higher oil prices and inflationary worries both here and in the states mean its an excelent hedge against the falling dollar and weaking markets.

Please post which stocks you feel may benefit other posters. Lets all try and make some money from Mining.

cheers GF.

>>GF

The "asian wedding season"! Well I never - learn something every day!

rgrds
gk

galick,

I think it's normally referred to as "the Indian wedding season".

This normally results in increased demand for gold, although I think this was lessenned last year due to the higher price of POG. India is becoming more prosperous all the time, so this year may be different.

Thanks Andy - interesting.

I have a position in the JP Morgan Indian Investment trust (ticker JII). I don't know much about Indian companies, but the PE's are really low - market average is about 11 I understand. I am not really into Investment trusts but I think India is such a good play - and I was not sure how to gain access otherwise. Do you have any indian plays other than gold & commodities (which I think will continue to do well).

rgrds
gk

gallick,

No, like you, no idea about their market, too remote for me.

Commodities look the place to be for now, totally agree.

Soaring Chinese demand drives mining boom
By Jeremy Grant in Chicago

FT.COM Published: October 4 2004 03:00 | Last updated: October 4 2004 03:00

With its 2,400 horsepower engine, 300-tonne weight and bright yellow livery, Caterpillar's new dump truck makes a statement about the mining industry's health that is hard to ignore.


Caterpillar is struggling to fill advance orders for the $2m truck, which was on display in Las Vegas last week at the world's largest mining exposition. That is in spite of production of the 793D not starting until next year.

"We actually ordered 10 of them, but they could only give us five," said Laurie Voyer, general manager of Leighton Contractors, an Australian group.

Mining is booming, driven by China's seemingly insatiable demand for coal, iron ore and other commodities, and the resurgence of US manufacturing.

According to the US National Mining Association, mining is also expected to enjoy a boom year next year, building on this year's record volumes. That has created a bonanza in the mining equipment industry, spurring demand for diggers, excavators, bulldozers and diesel engines.

Clive Deary, mining sales manager for Detroit Diesel, said his company was sold out until March next year. "We had a business plan 12 months ago. We've doubled the numbers since then."

Yet the question remains whether this boom will eventually turn to bust - as so often in the chronically cyclical mining industry. However, many argue that future peaks and troughs - reflective of swings in the supply and demand of commodities - may be less pronounced.

Jim Owens, Caterpillar's chief executive, said: "I think that we are at the early stages of a fairly prolonged global expansion of mining capacity. It is going to have a good run."

Such optimism is based on two factors: a thirst for energy in emerging markets such as China and India that should create sustained demand for iron ore and coal; and consolidation in the mining industry that has created efficient operators better able to weather commodity cycles.

"In five years, South Africa's going to be running out of electricity. China's the same way," said Robert Stenger, chief executive of The Cincinnati Mine Machinery Co, which makes coal cutters and drill bits. "We're good for another 10 years."

Gerald Shaheen, Caterpillar group president in charge of North America and global mining, said: "The mining industry used to be very fractured. We now have 20 mining companies owning 80 per cent of capacity, so we've got a much better shot at rational management of capacity in this industry."

In addition, mining industries in commodity-rich countries once dependent on the health of their region are expanding globally to diversify earnings.

Ernesto Palacios, executive director of Minexport, an advisory group in Chile, said his members were seeking business beyond Latin America. "They are strategically preparing for times when there is little demand."

Yet concerns remain. Rising fuel costs are making contractors worry about the energy efficiency of their equipment.

Another worry is the effect any downturn in China might have in an industry where it now has unprecedented influence.

Furthermore, one large private manufacturer of mining machinery told David Bleustein, a UBS analyst in New York, it was "increasingly concerned about the ability of Chinese manufacturers to duplicate western mining technology".

Yup that report goes hand in hand with one on mining web yesterday that said the Broking houses were expecting coking coal to hit $80 US dollars in 2005, the last time I looked it was in the low 50s so we should have exceptional growth from the likes of Bisichi, Anglo Pacific, Cambrian and even UK coal later in 2005 when its contract prices can be moved up. I beleive al of these to be derd cheap at the moment.

cheers GF.

Any news on AFE- it seems to have gone quiet. I thought they were about to announce good drilling results? I have been told to check out Adstrata-AAA as a good long term bet. Anyone any comments? cheers MP

PM to you MP on analyst recommendations, anyone else want one let me know.

cheers GF.

Commodities
Date: October 13, 2004

Its A Record For Copper.

By Rob Davies

Copper prices reached their highest level for 15 years last week when they got to US$3,321/ tonne. The previous peak, and highest ever price, was in 1989 when they got to US$3,400 and that record looks set to be broken very soon. Inflation over that period means that in real terms the current prices are still below the US$4,500/ tonne that the previous high equates to in todays money. Nevertheless, a peak has been reached and with inventory levels still low there are few reasons why prices should not move yet higher.

Oil is one reason why metal prices might go up because diesel fuel for trucks is a vital element in the cost of mining and the concentration, smelting and refining processes are all big consumers of energy. Ore is pretty hard stuff and breaking it down it down into its component parts takes a lot of effort. Oil prices for the lighter crudes in the US have now past US$50/barrel and the heavier Brent oils are heading that way.

The oil industry, like the mining industry, is operating pretty much at full capacity so the only way prices are going to be moderated in the short term is through a reduction in demand. Despite many signs that Western economies are not in such robust health there is no evidence yet that offtake is slowing down. So, if it is costing more to produce the metal, and consumers are desperate to get the stuff, the chances are that miners will be able to pass these costs through to consumers as price rises.

However, both the oil and the metal markets are in backwardation meaning that future prices are lower than spot prices. Copper, for example is priced at US$3,030/tonne for delivery in three months time, US$2,500 for 15 months time and $2,230 in two years and three months time. That implies that a lot of the money in the market is speculative rather than commercial, and with LME stocks of only 93,000 tonnes it is easy to see why.

The attraction of hot money to the commodity market can perhaps be explained by a fear that the dollar may weaken further, a view reinforced by a statement from a US bank official that the dollar can only go down over time, it was just a question of how far. Fears of a weaker dollar were reinforced by poor jobs growth in the US in September. Only 96,000 jobs were created which is about half of what is required. While that pushed up bond prices it didnt seem to hurt equity and commodity prices, both asset markets that do well in a growth environment.

Copper was not the only metal to do well last week. Aluminium reached a new all time high of US$1,645 / tonne and nickel moved up even though it peaked earlier in the year. Zinc has got back above US$1,000/tonne for the third time and closed at $1,139 /tonne. Interestingly, zinc is the only metal that is not in backwardation suggesting that it may give the best performance of all over the medium term. While all the commodities look set to give good dollar returns in the short term, the more important question might be to ask what that will be worth in local currencies.


cheers Gf.

If metals are in backwardation and future prices are lower that spot prices how do you see this effecting the furure of the big mining companies ie AAL BHP.
China does not seem to be slowing down, the soft landing has'nt happened and it looks as if future demand will remain high for some time to come.

MS

For ANDY and the lads..............................

In from watshot..

I am aware that Toledo Mining Corporation (TMC) enjoys keen interest amongst the members of WatsHot.com. Just the other day it was reported that Endeavour Financial, which has a global presence, with an investment-banking team to match, in its chosen sphere - raising capital for mining projects - had been engaged to advise on Philippines-based Toledo Copper. A separate report said that before the operations ceased, the last 15 years of operations at the same grade of the remaining resource - and of projected future production - had produced profits of up to $100 million, a thumping figure even if the latter figure took no account of debt service, taxes or management fees. Meanwhile there have been no setbacks in the development of the nickel deposits, and indeed the company is seeking support for the building of a plant to supplement its growing shipping operations. The ubiquitous Cambrian has taken another major bite, and at 2.75p per share, the recommendation remains, buy.

cheers Gf.

NOW THIS IS VERY IMPORTANT..............................

energyi - 14 May'01 - 07:30 View 'energyi' profile



Bisichi is a tiny company. Market Cap is just over 3 Million.
But it is not a typical junior mining company. Indeed most
companies of its size are involved in exploration rather than
mining. But BISI is a different animal altogether.

Bisichi owns shopping centres worth 7.8 Million, more than
2 1/2 times its Market Cap. And yet it remains listed in the
Mining sector. Why? Some years ago BISI had its mining
operations in Nigeria nationalised. Management of the
company was taken over by its largest shareholder, London
& Associated properties, which is controlled by the conservative
Heller family.

The Hellers have used property investments to rebuild the
company's asset based. And now Bisichi is a miner again
with a coal mine, the Black Wattle, in South Africa. With coal
prices shooting up, the mine is making money. Further development
and expansion of the mining is underway.

So there it is... at 32P, you get Retail stores at a big discount,
a reasonable dividend, and a growing mining business thrown
in for free. Fish & Shops, anyone?

Monthly CHART


NAV per share keeps growing


= = = = =
LINKS:
Website: http://www.bisichi.co.uk


DiogenesJ - 7 Oct'04 - 10:41 - 147 of 167


You never know, Oliver. Bought a few just in case (Western Canadian Coal, WTN). Also have a small stack of Cambrian Mining (which owns a large chunk of Western Canadian and of Asia Energy).

oliverletwintit - 8 Oct'04 - 00:53 - 148 of 167 edit


Yup me too, owning Cambrian. Didnt go into WTM because one of my brokers cocked it up online and then I saw the sells coming in.

I was flabbergasted, I thought initially that WTM was held by just the big Investor trusts etc, but certainly not when I saw 4,000 and 2,750 pass my eyes as sells. (and more like this)

Obviously the Brokers have got their hands on these which make it a different ball game. Obviously they have alloted them to their rich clients and they are flogging them on the first day of trading, PATHETIC.

Im now going to wait and see if it settles down, if not I will purchase more BISI or Anglo Pacific. SHAME, it could have been a superb new offering.

regards oliver.

DiogenesJ - 8 Oct'04 - 11:41 - 149 of 167


Yes, turned out to be a mistake buying on the first day. Only bought a few; I'll watch now to see where it settles, and may top up then.

BISI up another penny. Now let me see, if it goes up a penny a day, in a year's time it will be...

Ah well, back to the grindstone.

oliverletwintit - 8 Oct'04 - 12:02 - 150 of 167 edit


LOL, yup but its a nice feeling. UP just over 200% from this time last year.

regards oliver.

BIGBOBJOYLOVE - 8 Oct'04 - 12:14 - 151 of 167


why the sudden burst up,is a note out? a bid coming? whats happenin dudes,i know its cheap but...

oliverletwintit - 8 Oct'04 - 12:38 - 152 of 167 edit


Storming ahead, up 17p and well through the 200p barrier.

Tipped on the faraj thread.

regards oliver.

DiogenesJ - 8 Oct'04 - 12:41 - 153 of 167


Very illiquid, bob: take care.

Sammu - 8 Oct'04 - 13:24 - 154 of 167


Oliver

You mean you just tipped it on the faraq thread?

Sam

DiogenesJ - 8 Oct'04 - 13:34 - 155 of 167


Lol - good ramp, Oliver. :-)

Angel of the North - 8 Oct'04 - 16:42 - 156 of 167


From www.everyinvestor.co.uk

Plans to double production
There are also plenty of developments pointing to resumed profit growth in the future. Apart from the rising coal price and the export contract the company is also working on plans to increase production. It has negotiated a SA Rand 25m financing to support a broad investment programme including the purchase of a machine for continuous mining. The plan is that this will enable the company to lift production from 70,000 tonnes presently towards 120,000 and even 150,000 tonnes annually. The group has also put in facilities to wash all the coal, which reduces quantities but enables sales to be made at higher prices.

There are no forecasts for sales and profits but the company says it is confident that results for the full year will be good. Equally it is easy to see that the combination of rising prices with sharply higher production bodes well for profits in future years.

A further interesting question is how the company might exploit its strong cash flow, healthy balance sheet and black empowerment status in the future. One major opportunity comes from legislation designed to force long established white-controlled mining giants to sell to the South African government mineral reserves and prospects that they are not actively exploiting. These assets will then be sold on to suitable black empowered smaller mining concerns, like Bisichi, eager to develop those assets. The company has coal reserves of around 15m tonnes so would love to acquire more reserves.

Much depends on the coal price remaining buoyant. But, if it does, Bisichi will have the resources and the opportunity to develop into a significant mining company.

DiogenesJ - 8 Oct'04 - 16:49 - 157 of 167


Thanks, A. Good to see some firm information posted here.

Angel of the North - 8 Oct'04 - 16:58 - 158 of 167


Bought in this morning - so tis my duty to ramp? a little?
More:......

Soaring prices and black empowerment help Bisichi succeed

Two key factors lie behind the startling recent success of Bisichi. First is the dramatically rising coal price which has doubled, from $30 to $60 a tonne just since last April. This in turn reflects soaring demand in China, which has gone from being an exporter of coal to a net importer sucking in coal from Asia and Africa.

The second factor is black empowerment. Bisichi went the whole hog on black empowerment by selling a 37.5 per cent stake in its Black Wattle Colliery to a black-controlled company, which has then been instrumental in opening many doors to the company.

In particular black empowerment status has enabled Bisichi to become an exporter of coal through Richards Bay Coal Terminal. The company says that the long-term export contract it has been able to negotiate locks in a significant profit margin.

It is complicated to calculate exactly what effect a rising coal price has on Bisichi because of the mix of production between exports, coal sold into the local market and low phosphorous coal sold at a premium to furnaces producing stainless steel. At the half-year stage for the first six months of calendar 2004 the group said that average selling prices for coal were 21 per cent higher than in the second half of 2003. Since then the coal price has risen further.

Investors were initially disappointed when the interims showed profits falling from 746,000 to 726,000 with operating profits down from 1.00m to 883,000. However the company says this was a very good performance because it came despite needing to move all three mining sections at the Black Wattle Colliery during the period to exploit new reserves.

Gan canny oot there.......!

DiogenesJ - 8 Oct'04 - 17:07 - 159 of 167


Canny it is, A. :-)

DiogenesJ - 8 Oct'04 - 22:59 - 160 of 167


Here's some more bullish comment on the price of coking coal:

07.10.04: shares in BHP Billiton and Rio Tinto were higher in afternoon trade as Dresdner Kleinwort Wasserstein said the two blue chip miners remain its top picks in the UK listed mining sector, dealers said. In an upbeat note on the sector, the German broker said it believes the mining sector offers superior earnings growth compared to the market with EPS forecast risk still on the upside. It added it has raised EPS estimates again, principally for the bulk commodities and oil. It now forecasts a 22% increase in iron ore prices and a 60% rise for coking coal in 2005. The broker said it retained a preference for bulk commodities, particularly iron ore and coking coal exposure as these commodities boast the most attractive medium-term fundamentals, and therefore have a stronger case for a higher multiple of peak cycle earnings in 2005.
(from InvestorEase.)ENDS.


BUY COKING COAL COMPANIES but forget UK coal as that as fixed low contract prices up until mid 2005. BISCHI, Anglo Pacific, and the newly floated Western Canadian Coal give exposure, but let this last one settle down for a while. Cambrian is another but too many jockeys on it at the moment.

cheers GF.

cheers GF.

Has any one read the lex column in todays FT on mining, can they give me a summary of it please or paste it.

I've brought this thread back up to the front page again, as the gold
price is doing well recently, so the assoc. companies may be of
interest to others apart from just me :>)

Yup well pleased. Tooled up derd cheap in mid summer and now looking at some fantastic gains. Could see this coming the writing was on the wall, all speculators in oil but some time the bubble had to burst. Bang in the two budget deficits in the US and you have an ideal breeding ground for POG.

cheers GF.

POG now back over $450 .

cheers GF.

Nice to see some share prices recovering a bit also today
RRS took a nasty knock/profit taking end of last week, up
again today thankfully. But other major miners BLT etc down.