London miners enjoyed half consecutive week, after the focus shifted to the strong growth potential of China, India and other emerging economies. The FTSE 100 miners were particularly strong, making an average gain of 6.9 percent, while mid and small cap shares a very respectable 5.3 percent increase in total managed. As always, the mood in London are most evident in the largest and most liquid stocks and the juniors follow behind.
After last week’s cascade of news from the FTSE 100 miners, this week was much slower in the large cap end. Yet the company has been rewarded with interest from the buying side, and Eurasian Natural Resources (LSE: ENRC) ended some 10.2 percent higher at 1033.5 p after the announcement that it intends Chambishi Metals and Resources Committee to acquire. Chambishi is a Zambian copper and cobalt producer and Marketing Committee is a metal company based in Dubai. The acquisition fits well with the recently acquired assets CAMeC ENRC including copper and cobalt operations in Central Africa. ENRC’s 10.2 percent share price increase was enough to see the best performer in the FTSE 100 miners. Antofagasta (LSE: ANTO) and Lonmin (LSE: LMI) was the joint worst, both the introduction of an increase of 4.4 percent on no news.
Anglo American (LSE: AAL) has its annual results. It showed that it was harder hit than its colleagues in the market collapse last year. The underlying profit of U.S. $ 2.6 billion, an increase of nearly 51 percent year-on-year was significantly worse than the fall in Rio Tinto’s profits fall 39 percent and Xstrata down 41 percent. This illustrates perfectly the Anglo-asset portfolio of work – the heavy exposure to platinum and diamonds has most of the damage. In fact, profits from platinum fell by a devastating 99 percent and profit from diamonds fell by an equally disastrous 87 percent. But the plan seems to be a reallocation of the portfolio, with the planned growth is copper, iron ore and nickel. The market had probably already taken all that news, as shares of the company gained to 6.3 percent on the weekend 2457.25p.
The market is still waiting for first IPO of the year, although several are expected in the near future. One that will certainly lead to some interest comes from the Barrick stable. The U.S. announced this week that the big spider out of her African gold assets into a new vehicle, to indicate African Barrick Gold, with its primary listing in London, although it plans to list in Dar Es Salaam, from all places. There is actually some good logic to this, like all of the new company operating the mines in Tanzania. The IPO is scheduled for the end of March, and the new company must end with a market capitalization of at least 2.5 billion pounds, suggesting that it may end in the FTSE 100.
The mid and small cap companies go through a relatively quiet period, but there is still plenty left to go to keep investors happy. The best performer of the week, Cluff Gold (AIM: CLF), which rose 28.5 percent to end at 80p, after the company revealed that an approach to a possible bid for the company had received. At this point, the discussions are at an early stage, and the identity of the other party is not revealed. Cluff has two gold mines in operation: Kalsaka in Burkina Faso and Angovia in Ivory Coast, and is close to completing a pilot study for its much larger Baomahun project in Sierra Leone.
Frontier Mining (AIM: FML) is also involved in corporate action. Has announced that in agreement with Coville Inter Corp with a view to merging the interests of the two companies. Currently the two companies each have a 50 percent stake in the Benkala copper-molybdenum-gold deposit in Kazakhstan. Frontier also owns the Naimanjal and Koskuduk gold mine project, while the Coville Maminskoe gold project, all in Kazakhstan. The merger process will take some time to complete, but should happen by the end of October this year. Frontier gained 22.7 percent, and ended the week at 6.75p.
But it is worth considering that not all proposed mergers to complete. Last year in December, Atlantic Coal (AIM: ATC) has announced that it intended a miner named Maple Creek Carpenter in order to complement the operations at its Stockton mine in Pennsylvania to acquire. Atlantic has now announced that the two companies have not been able to reach a definitive agreement, and that the talks have ended. Atlantic stock was unchanged at 0.575p.
Second best performer of the sector was Ferrexpo (LSE: FXPO), who got 23.4 percent to finish at 282.3p. Ferrexpo is a substantial company, with iron ore mines in Ukraine, so a move of this magnitude is unusual, especially since there does not seem to notice any significant support. It appears that the main shareholder Igor Kolomoisky and Gennady Bogolyubov are selling their substantial interests in the company. Not yet clear is who the buyer is. Kolomoisky and a Bogolyubov failed attempt to control Ferrexpo in 2009 to take.
The obvious reason for the very strong performance last week Sable Africa Mining (AIM: SBLM) was revealed when the company announced that it had agreed to a 29.33 percent stake in Delta Mining Consolidated to acquire an amount of approximately U.S. $ 17, 6 million euros. Delta is based in South Africa and has interests in four major coal projects in South Africa and Botswana. A feasibility study is almost completed on the Riet Kuil coal deposit near Delmas. This project has the potential to supply coal to the nearby power stations and Eskom for the export market in terms of capacity can be secured at the ports. Sable ended the week 1.9 percent as investors took profits on 19.125p.
Elsewhere, ferrous metals International (LSE: IFL) announced that it has made a deal with Anglo Platinum under the terms of which they provide the money to build a chromite recovery plant at Anglo Platinum’s Rustenburg mine. Rustenburg will maintain and operate the plant, expected to produce chromite in mid 2011. In exchange for financing the project will be entitled to 15,000 tonnes of chromite IFL per month for a period of about nine years with no cost other than the cost of transport to its ferro-chrome smelter. The net effect is that the IFL significantly, the average cost of chromite requirements of its smelter to reduce and so should lead to improved margins. However, IFL shareholders are not greatly affected by the announcement of the stock increased by only 0.7 percent to 35.25p.
So, London is back to business as usual, with the imminent flotation of the African Barrick Gold to look forward to. It will be a good test of the appetite of the market for new issues.
source : minesite
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