With Runge Limited, BRW, AR&I, ANZ, Ausenco, Hellman & Schofield, Outotec, Behre Dolbear, Deloitte, AME Mineral Economics, Apollo Global, Venture Group Equities, Veritas Securities, and Aspermont Group
October 1st at 12.30 p.m. presents
Mercury Rising in Cloncurry
THE imminent summer will likely be hot in the historic Cloncurry region of northwest Queensland – after all Australia’s highest ever temperature of 53.1 degrees Celsius was recorded there 120 years ago! ASX-listed Cloncurry resource stocks are doing the same with an intriguing bunch of companies moving inexorably towards mining.
Two of the key players in the historic region are Robert Friedland’s Ivanhoe Australia, and the copper contender, Exco Resources
Freidland’s man downunder, Ivanhoe Australia’s CEO Peter Reeve, has already driven a huge year for the company, with the Merlin molybdenum and rhenium discovery being a key factor in the stock moving from a 52-week low of 15c to more than $4 recently. A cool $100m has gone into the ground.
Responding to a speeding ticket from ASX earlier this month, it was pointed out that near surface drilling at the Merlin project had recorded the highest grades in the world for molybdenum.
The rhenium is used is in nickel based superalloys in jet engines and is amongst the most expensive and stategic metals on Earth. Merlin is a world vault of rhenium.
With drill rigs now going hammer and tong and a scoping study in train, it was also claimed that plenty of offshore interest had been “entertained” by Ivanhoe Australia. Being a company associated with Friedland anything is possible.
Meanwhile Michael Anderson at the less high profile Exco moves ever closer to pushing the development button for the company’s Cloncurry copper project after the onerous environmental impact statement was submitted to the Queensland authorities this month. Ivanhoe holds 19.5% of Exco.
Exco, which also owns 75% of a gold project currently being built in South Australia, has established a 51 million tonne resource base in Cloncurry, capable of underpinning a 10 year mining operation producing some 25,000t of copper and 17,000oz of gold annually.
What makes the situation particularly intriguing is the project’s location, with Xstrata’s Ernest Henry operation clearly visible just over the fence line 8km away. The big Ernest Henry operation is on its last legs as an open cut operation, and it seems likely Exco’s dirt would be coveted by those charged with having to fill the big, hungry mill. However to date a deal with Xstrata hasn’t been cut, and time is surely running out for this scenario to become a reality.
And it’s not as if Exco would seem short of options for developing its own, stand-alone copper operation. As well as the financiers that will come knocking on Anderson’s door on the back of copper being routinely lauded by investment banks as the base metal with the best future prospects, Exco will soon have decent cash flowing its way courtesy of its gold project.
Merlin magic and Cloncurry copper will heat up the Sydney Mining Club next month. Not to be missed!
IVA Price at posting:
$3.25 Sentiment: None Disclosure: Not Held
