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DECEMBER 2011 – Volume 5 no. 5
Featured in this issue of Australian Resources & Investment
Coal holds its strong IPO appeal
The rush for junior explorers since 2009 has extended into capital raisings for service companies and offshore projects, including coal bed methane gas. The strong performance of junior coal explorers and service providers has been a rare bright spot in an otherwise bleak market for initial public offerings (IPOs) in the past three years. Coal floats, on average, have produced strong share price gains since listing and proved that coal remains a favoured commodity for resource investors and those who follow floats.
Resources the life-raft in an economic storm
Sometimes I think we, as a nation, forget important fundamentals. Natural resources and people on the land and in our north contribute a major portion of the wealth of our country. This was recognised as a key factor that helped Australia avoid the previous global economic crisis. Now we have another global economic crisis approaching, led by both Europe’s and the United States’ big-spending governments and resultant debt and economic downturns. Therefore, we need to maintain the success of our resources industry.
Volatility – an often-overlooked variable in resources markets
Volatility is spoken about in much of the financial literature and general media, particularly of late, but how many of us analyse it as a specific variable in our trading or investment systems? We will examine key tools at the technical level, coupled with a suggested fundamental framework, and we will do this with a focus on the resources markets.
Gold: the best of times or the worst?
A gold price hovering around $1600 per ounce would suggest intoxicating times for this sector of the mining industry. Whilst the price of gold would have to reach $2435 per ounce to pass the inflation-adjusted peak price of 1980, $1600 per ounce is not to be sneezed at. That said, the industry does face major issues; it is not quite as good as gold. In particular, four issues stand out: reserve replacement, the growing need to explore in remote locations, rising capital costs, and issues around the social license to mine.