Resource Market Weekly Recap – Feb 18, 2010

- February 18th, 2010

By Melissa Pistilli-Exclusive to Resource Investing News Copper Investing News Copper rose to its highest level in over two weeks Tuesday on a softer dollar and cancelled warrants. Despite depressed demand out of China, analysts believe demand from the rest of the world, including the US and Japan, will more than compensate. Goldman Sachs is … Continued

By Melissa Pistilli-Exclusive to Resource Investing News

Copper Investing News

Copper rose to its highest level in over two weeks Tuesday on a softer dollar and cancelled warrants. Despite depressed demand out of China, analysts believe demand from the rest of the world, including the US and Japan, will more than compensate. Goldman Sachs is still forecasting 11.4 per cent growth from China, which would be a nearly 3 point improvement over last year’s growth. Global copper supply is expected to move into a deficit of 300,000 to 400,000 tonnes this year.

Companies making news this week include Lundin Mining Corporation, Codelco and African Copper. Lundin employees at the Neves-Corvo copper mine in Portugal are striking to demand 17 per cent salary increases. Chilean state-owned Codelco, the world’s top copper producer, is adding new members to its board of directors. Chilean President-elect Sebastian Pinera is keen on making the miner more efficient. African Copper has declared a US$ 36.45 million net profit on its Mowana mine for 2009 after a loss of $162 million in 2008.

Gold Investing News

Last year turned out to be a good year for emerging junior companies in the Gold Stock Strategist Emerging Junior Gold Producers (GSSX) Index. And 2010 may be an even better year.

Major gold miners are ramping up gold production and looking to expand their resource base, and this bodes well for junior miners with advanced quality exploration and development projects. Quality juniors often attract the interest of the majors when gold prices are doing well. Acquiring junior companies saves majors the expense, extensive work and high risk associated with making discoveries and bringing through to development.

Majors like Kinross Gold Corp, Barrick Gold Corp and Agnico-Eagle Mines may soon be fighting over the available juniors with quality projects. All three companies recently reported fourth-quarter earnings that topped the average analyst estimate by at least 6.6 per cent.

Manganese Investing News

Manganese prices have stabilized after a downturn at the beginning of February. BHP Billiton’s coking and thermal coal, aluminum and manganese divisions posted better than expected numbers and analysts are optimistic that manganese will see a turn around soon.

Aurora Minerals and Shaw River Resources have given investor presentations recently. Shaw River has six manganese projects and Aurora owns the Capricorn Southeast deposit in Australia. Other companies making news include India’s Mangilall Rungta and China Yunnan Metallurgical Company, Viti Mining Limited, and Goldspan Resources Inc.

Rare Earths Investing News

Discussion surrounding the value, feasibility and necessity of creating rare earths exchange-traded funds is swirling around the marketplace. Currently, investment opportunities in REEs outside of China’s monopoly lie with 12 junior miners.

In January, Global X Management Company launched Global X China Materials ETF, the first ETF to offer access to the China materials sector. Canadian firm Dacha Capital is in the financing phase of developing an ETF that would include REEs. A major Canadian bank is attempting to raise $25 million to capitalize another REEs ETF.

Companies making news include Ucore Uranium Inc [TSX.V: UCU] and Arafura Resources [ASX: ARU]. Ucore has completed the 2010 exploration plan for its Bokan-Dotson Ridge rare earths project and Arafura has announced a placement of $17.5 million and a renounceable rights issue to raise up to an additional $17.8 million to advance its Nolans Project.

Uranium Investing News

The Obama Administration has announced a loan guarantee for two new nuclear reactors to be built in Georgia by Southern Company, the first nuclear energy firm to take advantage of The Energy Policy Act of 2005. Completion of the Southern Co two-unit plant is expected in 2016 or 2017.

Further proof Obama is backing nuclear energy comes in his 2011 federal budget that cuts subsidies for fossil-fuel companies while tripling loan guarantees for companies building new nuclear reactors, adding $36 billion on top of the $18.5 billion already available. The total, $54.billion, could help construct up to six or seven new plants.

A recent Gallup Poll says a record 59 per cent of Americans support nuclear power and this positive attitude is growing around the world along with demand for nuclear energy. The World Nuclear Association forecasts uranium demand exceeding supply around 2022.

Vanadium Investing News

Demand for ferrovanadum rose a tad higher than expected this week and was trading between $12.50 and $13 per pound, up from $12.35-$12.75 the previous week.

Companies making news include Aurox Resources [ASX: AXO], NiPlats Australia [ASX: NIP], Blue Sky Uranium Corp [TSX.V: BSK], Largo Resources Ltd [TSX.V: LGO], Crosshair Exploration & Mining Corp [TSX: CXX], and Denison Mines Corp [TSX: DML].

Blue Sky Uranium has announced a new discovery of uranium-vanadium mineralized areas at its ANIT project in Argentina. Largo Resources is working on a private placement to acquire financing for the purchase of an additional 35.5 per cent interest in the Maracas vanadium project in Brazil. Crosshair Exploration recently announced the widest vanadium intercept to date on its Central Mineral Belt Project in Labrador. And Denison has completed its 2010 operating plan.

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