Juniors outperform big boys with a boom Robin Bromby January 08, 2007
BHP Billiton, Rio Tinto and Woodside Petroleum might have delivered profits and dividends in 2006, but pretty meagre capital gains, considering that we're in the biggest-ever commodities boom. That was left to the juniors, and mainly the smaller ones at that. BHP shares were up 11.2 per cent for 2006 at the end of December, Rio's up 7.7 per cent, but Woodside was down 2.2 per cent on the year.
Of the 239 resources companies charted by broker Intersuisse, 79 stocks doubled or better.
Intersuisse's annual review shows controversial Queensland copper explorer CuDeco was 2006 winner, putting on 2900 per cent from 16.5c on January 3 and ending at $4.80, hitting $7.11 along the way.
The former Australian Mining Investments was closely followed by Bannerman Resources, up 2537 per cent, as investors latched on to the talk that the company had a Paladin look-alike uranium project in Namibia.
Tri Origin Metals, which is planning to revive the old Woodlawn copper-lead-zinc-gold mine near Canberra, saw its shares end 2006 up 2023 per cent. The company has an ingenious plan to use a nearby landfill power station to make its own concentrates on site.
Conquest Mining's big silver find in Queensland put 1200 per cent capital gain on that stock, while uranium explorer Uranex - with prospects in Tanzania beyond the reach of the Australian Labor Party - was up 1006 per cent.
At the other end of the scale, Tawana Resources just couldn't sell its South Africa-Botswana diamond story, so shareholders holding on in 2006 saw 72 per cent wiped off their investment.
Clearly, Union Resources had an uphill job selling its big zinc play, considering that its location - Iran - was shaping up as the centre of a potential nuclear weapons crisis. Union was down 65 per cent.
Cazaly Resources, unlike Uranex, was not beyond the reach of the ALP. The decision by Western Australia's Labor Government to hand back the Shovelanna iron ore project to Rio Tinto was a severe blow. It didn't matter that Cazaly had followed the pegging rules when Rio's renewal application was late, or that Rio had no intention of mining the area, this was enough to send Cazaly's shares down 64 per cent.
Nor does it help if iron ore channels don't come up to expectations. Iron Ore Holdings forgot the first rule of exploration: don't ruin a good story by drilling it. Disappointing results from the Lamb Creek project in the Pilbara contributed to the 61 per cent slump in the share price.
And then there is poor old Emperor Mines. The only surprise is that the price dropped only 55 per cent, after the closure of its venerable Fijian mine and cost disasters in Papua New Guinea. But that was probably because a succession of bad years had Emperor starting 2006 at a low point, anyway.
And the standstill stock of the year? View Resources, starting at 24c and ending the year at 24c.
TRO Price at posting:
0.0¢ Sentiment: Buy Disclosure: Held
