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| Weekly Commentary Archive | | For archival copies of the Weekly Commentary click here... | | | | 30th April 2010 | Gold continues to trade at well over US$1000 an ounce and its advance has been hastened by recent fractures within the EU over Greece’s sovereign debt problems. Naturally enough, gold miners are doing well but Australia’s biggest gold producer, Newcrest (Au:NCM), is not resting on its laurels. NCM has made a big play for Lihir Gold, but Lihir so far is playing hard to get.
Undeterred, NCM went on to announce that it would proceed with the US$1.8 billion development of the massive Cadia East copper-gold porphyry project, on the eastern flank of the Cadia Hill mine, in the Orange district of New South Wales. Cadia East is expected to become the largest underground gold mine in Australia and is destined to expand Cadia Valley’s total annual production to 700,000 to 800,000 ounces a year. The mine will also have some of the lowest costs in the world. NCM may not be successful with Lihir, but Cadia East holds much promise.
Last year’s big rights issue from resins and coatings maker Nuplex Industries (NPX) was a bold move aimed at fixing its balance sheet, which had become stretched after the company acquired some assets from Akzo Nobel in 2005. NPX's share price fell in an immediate response to news that the Securities Commission had filed civil proceedings against the company and six current and former directors. The commission alleges NPX breached its continuous disclosure obligations under the NZX Listing Rules and the Securities Markets Act by failing to disclose to the market a breach of a banking covenant at the time. NPX has said it will defend its actions vigorously. Meanwhile, the debt crisis has passed for NPX and the company is now in the midst of a robust earnings rebound. For the six months to 31 December 2009 NPX reported a net profit of $34.6 million compared with a $6.0 million profit in the previous corresponding period.
Disclosure Statement: A disclosure statement can be obtained free of charge by calling IRG 0800 474669, or by email info@irg.co.nz.)
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