AN EXCELLENT finish to last week on Wall Street promised to give the Australian market a boost this week.
While Europe and the United States ponder over the obvious – they still have serious economic problems – a stress test of the biggest banks in Europe to see if they had recovered from the global financial crisis, was anything but encouraging.
However European regulators were happy and as a result the US market was up again Friday (102.32 points) putting the Dow Jones firmly back on solid ground. But for how long is anyone’s guess as the US market bounces between optimism and concern as any sign of under-performance sends investors into a tail-spin.
Commodities were encouraging on the London Metal Exchange with nickel up 3.9% to $US19,495 per tonne at one stage while lead was also up 3.97% to $1866 tonne, with copper up 2.19% to $6860 tonne and zinc up 1.59% to $1918 tonne.
The Australian dollar is also affecting local commodity prices pushing US89 while gold opened this week at $US1191 and $A1329.
The Federal election was another barrier to a good start to the week as uncertainty with fund managers likely to sit and watch the as the electoral battle unfolds.
Shares in Norton Gold Fields jumped 3.5c to 19.5c following news it had reached a settlement with Lehman Brothers Commercial Corporation, replacing a gold hedge with a $A97 million loan due by August 2014 and a $10 million upfront payment.
At the time of the Lehman bankruptcy in September 2008 Norton had a hedge in place for delivery of 280,000 ounces at $875 and ounce to be sold in even quarterly parcels through until June 2012.
The $97 million convertible note will be paid over four years with $5 million to be paid by February and August 2014, and the principal in equal instalments in February and August of 2014.
Approval for the settlement is expected towards the middle of next month and requires approval by Norton’s existing convertible note holders.
Tuesday began with a positive market on the positive side after overseas markets improved despite some mixed earnings results
Tuesday also saw Sundance Resources back on the boards with a new board of directors following the tragic plane crash in Africa.
On Wednesday the market was buoyed by a US rally amidst speculation the US Federal Reserve may announce plans to stimulate the economy.
The materials index closed 1% higher and gold stocks broke even for the second day running.
The highlight of the day was a jumpy by Perth-based uranium explorer NGM Resources, up 4.2c to 13.5c following news of a $27 million takeover by major shareholder Paladin Energy.
NGM’s directors recommended the Paladin offer in the absence of a superior offer.
Another bright spot in the junior market was the announcement that BCD Resources – up 2c to 12c - and Bendigo Mining would merge through a scheme of arrangement giving the combined entity a market capitalisation of about $162 million based on their share prices.
After opening strongly on Friday morning on the back of a robust overnight session on Wall Street, Aussie investors held onto those gains to close the week on a high for the third week in a row.
East Kimberley-focused NiPlats Australia reported some high-grade copper, gold and silver assays in surface samples from its Speewah project.
The results represent the best-ever assay results found at the Speewah tenements including: 16.5% copper, 138 grams per tonne silver at the Eiffler prospect, 8.26% copper, 4.28gpt gold, 786gpt silver at the Grey’s Vein prospect, and 2.47% copper, 1.24gpt gold, 811gpt silver at the Grey’s Vein prospect.
The latter Grey’s Vein prospect sample also assayed 3.24% lead.
Niplats shares jumped 6.5c to 27c. The company was unable to handle the excitement and promptly entered a trading halt in preparation for another announcement expected early next week.
Other securities on the move Friday included Auzex Resources, up 3c to 12c, Malagasy Minerals, up 1.9c to 9c, and Diatreme Resources, up 1.4c to 8.3c.
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