For most mining stocks, it was a day of gains, with BHP Billiton up 31c to $39 and Rio Tinto up $1.32 to $133.68.
The session proved to be more rewarding for gold stocks, on the back of last night’s record gold price in New York.
With spot gold hovering around $US940 per ounce, traders are speculating that the “psychological barrier” of $950 isn’t far from being broken – especially as oil prices continue to soar.
That was good news for Australian gold plays, with a slew recording more than 2% gains.
Newcrest Mining lead the way with a A96c or 2.7% gain to $36.66 by the close of trade, followed by Lihir Gold, up 15c or 4% to $3.90, and Sino Gold Mining, which posted another loss for 2007 but is shooting for profits this year, finished the day up 30c to $7.95.
Iron stocks were also still riding high on the back of the announcement, earlier this week, that Brazilian major Vale had negotiated 65-71% price hikes from Japanese steel mills for its shipments of the bulk commodity. Fortescue Metals Group rose 49c or almost 7% to $7.54 while Chinese takeover target Mount Gibson was up 14c to $3.26.
The day’s biggest gainers, however, were two companies which shot up on drilling results, proving there’s still speculative life left in the market.
Haddington Resources gained 9c to 30c, a rise of almost 43%, on some healthy uranium results from its Shoobridge project in the Northern Territory.
Balkans Gold, meanwhile, shot up 5c or 50% to 15c after positive drilling intercepts from its Breznik gold project in Bulgaria.
Aquarius Platinum also continued its solid run on the back of the soaring platinum price, gaining $1.15 to $17.55, a rise of 7%.
Going down was Iluka, which posted an improved profit – but one that was still at the mercy of the strong Australian dollar. The company’s outlook for 2008 was also pretty grim, with profits possibly going to drop below $20 million. It was no surprise then that the market slashed 62c from Iluka’s share price, sending it down to $3.75, a fall of 14%.
The big news of the session was the possible merger between two Broken Hill-focused zinc miners, CBH Resources and Perilya.
With the zinc price well and truly off the boil – three-month zinc reached a high of $US4515 per tonne in November 2006, while last night it closed trading on the London Metal Exchange at $2365/t, down 1% – it could be a good move for the companies, delivering major cost savings and synergies, as well as increased resources to expend on growing their other metallic assets.
The market welcomed the news for CBH, sending its shares up 7c to 42c, while it gave Perilya a little shove down 9c to $1.805.
Meanwhile, on the macro-economic front, today’s wage data released by the Australian Bureau of Statistics is yet another indication that the Australian economy is growing too fast for its own good.
With the average wage up 0.5% in the three months to December, tipsters are betting on another interest rate rise in March.
