Morgan BellInvesting in the Mining Boom
December 15th 2006 09:25
If you dear reader like mining, what do you think of these two debutants into the ASX? Do you think Australia should be transforming its raw materials? Stay with me for more.
The news today, 15 December 2006, is that “two more Perth mining juniors made solid debuts on the Australian Securities Exchange yesterday.”
“The gold and base metal explorer Brumby Resources opened at 22c, up 10 per cent on the initial public offer price of 20 c, before closing at 21.5c.”
“Brumby chairman Bill Ryan said the company, which raised $4 million in the float, had compiled five main exploration projects in Western Australia, in known geological provinces.”
““Our initial focus is the Yule Group and Pardoo-Telyagel projects, which comprise eight exploration licences covering 1330spkm in the Pilbara region of WA,” Mr Ryan said.”
“At the same time, Burey Gold, a gold and uranium explorer headed by Perth miner Ron Gajewski, also made a solid ASX debut, its shares opening at 22c, up 10 per cent on the 20c IPO price. They closed at 21c.”
“Burey’s portfolio includes its flagship Mansounia gold project in Guinea, West Africa, and a number of prospective uranium properties in South Australia and Western Australia.”
““The Mansounia project represents a large tonnage, low grade heap cyanide leach target, and presently exhibits mineralisation of similar rock type and tenor as other HCL mines already developed and operating in the same Siguiri Basin province,” Burey said.”
This news was published in the online version of The Australian under the title “Mining minors Brumby, Burey make strong start”. Click here to open that page.
Australia is such a great resources producer who exports to so many other foreign countries. Its mining output is an important part of its national GDP.
Yet, Australia does not process its commodities – it rather sells them in raw form. It is said its Australia’s specialisation, this ability to extract and sell minerals in great quantities.
Some times I wonder how much Australia would stand to earn if, instead of iron ore, it sold value-added steel, and so forth.
This talent to extract and transport large quantities of minerals requires an immense and well developed infrastructure of road, railways and ports, which is costly.
It is discussed at this stage that the Federal Government should be investing a lot more in infrastructure, given the need to take opportunity of the current resources boom.
The problem with investing in commodities is, very simply, that you have to guess the beginning of a boom, and buy while cheap, and then you have to guess the end of it in order to sell while the prices are still high.
This is not easy.
In boom time miners’ revenue and profits grow enormously. And they become then expensive as stocks. Interestingly, a lot of people buy them that expensive expecting these stocks to still rise further.
Out of boom times, commodities compete by decreasing their prices and their incomes then don’t look so attractive.
Anyway, some experts calculate that the current resources boom will continue until 2025, given the situation of the Chinese economy, mostly.
Happy digging.
End
The news today, 15 December 2006, is that “two more Perth mining juniors made solid debuts on the Australian Securities Exchange yesterday.”
“The gold and base metal explorer Brumby Resources opened at 22c, up 10 per cent on the initial public offer price of 20 c, before closing at 21.5c.”
“Brumby chairman Bill Ryan said the company, which raised $4 million in the float, had compiled five main exploration projects in Western Australia, in known geological provinces.”
““Our initial focus is the Yule Group and Pardoo-Telyagel projects, which comprise eight exploration licences covering 1330spkm in the Pilbara region of WA,” Mr Ryan said.”
“At the same time, Burey Gold, a gold and uranium explorer headed by Perth miner Ron Gajewski, also made a solid ASX debut, its shares opening at 22c, up 10 per cent on the 20c IPO price. They closed at 21c.”
“Burey’s portfolio includes its flagship Mansounia gold project in Guinea, West Africa, and a number of prospective uranium properties in South Australia and Western Australia.”
““The Mansounia project represents a large tonnage, low grade heap cyanide leach target, and presently exhibits mineralisation of similar rock type and tenor as other HCL mines already developed and operating in the same Siguiri Basin province,” Burey said.”
This news was published in the online version of The Australian under the title “Mining minors Brumby, Burey make strong start”. Click here to open that page.
Australia is such a great resources producer who exports to so many other foreign countries. Its mining output is an important part of its national GDP.
Yet, Australia does not process its commodities – it rather sells them in raw form. It is said its Australia’s specialisation, this ability to extract and sell minerals in great quantities.
Some times I wonder how much Australia would stand to earn if, instead of iron ore, it sold value-added steel, and so forth.
This talent to extract and transport large quantities of minerals requires an immense and well developed infrastructure of road, railways and ports, which is costly.
It is discussed at this stage that the Federal Government should be investing a lot more in infrastructure, given the need to take opportunity of the current resources boom.
The problem with investing in commodities is, very simply, that you have to guess the beginning of a boom, and buy while cheap, and then you have to guess the end of it in order to sell while the prices are still high.
This is not easy.
In boom time miners’ revenue and profits grow enormously. And they become then expensive as stocks. Interestingly, a lot of people buy them that expensive expecting these stocks to still rise further.
Out of boom times, commodities compete by decreasing their prices and their incomes then don’t look so attractive.
Anyway, some experts calculate that the current resources boom will continue until 2025, given the situation of the Chinese economy, mostly.
Happy digging.
End
| 54 |
| Vote |
Add To: 
subscribe to this blog
