Chalice unveils maiden resource

for Koka

Chalice Gold Mines has unveiled a maiden resource of 4.6 million tonnes for 760,000 ounces for the Koka deposit at its Zara project in Eritrea.

The company says its feasibility study, being compiled by Lycopodium Minerals, AMC and Knight Pisold, is expected to be completed next month.

Chalice holds an 80 per cent stake in the Zara project with an option to acquire the balance from Dragon Mining.

Chalice shares were unchanged at 49.5 cents at 11am.

Nido, Kairiki in trading halt

Nido Petroleum is expected to announce positive results from drill stem testing at its Tindalo-1 well off the coast of the Philippines.

Shares in the company, which operates the broader SC54A project and holds a 42.4 per cent stake, were placed in a trading halt along with those of 30.1 per cent joint venture partner Kaikiki Energy.

The balance of the project is held by commodities trader Trafigura (15 per cent) and TG World (12.5 per cent).

Late last month, Nido reported the first oil flows from Tindalo.

Shares in Nido were up one cent, or 5.41 per cent, to 19.5 cents before the trading halt was called while shares in Kaikiki Energy rose 0.5 cents, or 2.86 per cent, to 18 cents.

FIRB approves US deal for TFS

WA sandalwood grower TFS Corporation says the Foreign Investment Review Board has approved an investment management agreement between it and a US-based institutional investor.

Under the agreement, which TFS announced on May 26, TFS will manage a 180-hectare Indian sandalwood plantation to be planted this year.

Investment by the US-based institution over the life of the plantation, excluding performance bonuses to TFS, is anticipated to be around $20 million.

The investment could grow by another $100 million if an option is exercised to plant an extra 180 hectares per annum for the next five years to 2015.

The agreement is subject to and conditional upon the settlement of a related land acquisition agreement with TFS.

The land acquisition agreement was conditional upon the investor obtaining FIRB approval.

Under the deal, TFS is paid an upfront payment for the purchase of the land and establishment of the plantation, annual payments for plantation management, and a performance bonus upon a hurdle rate of return being achieved by the investor.

Soaring cocoa price

to hit chocolate makers

A shortage of cocoa is threatening to force prices for chocolate higher.

Cocoa prices are at their highest levels since 1977, mainly because of a plant disease blighting the crops of thousands of cocoa growers in the Ivory Coast, which accounts for almost 40 per cent of the 3.5 million tonnes of cocoa that end up as plastic-packaged chocolate bars and luxury boxes of truffles across the globe.

Swollen-shoot viral disease, heavy rain and poor infrastructure have cut the Ivory Coast’s production by 20,000 tonnes compared with the year before. The crop failures, together with a forecast fifth year in which cocoa demand will outstrip supply, have sent cocoa futures soaring.

In early trading last night, the benchmark contract for cocoa on the London International Financial Futures and Options Exchange was at a 33-year high of £2553 a tonne, up from just £600/t only 10 years ago.

Margaret River Chocolate Company co-owner Martin Black said the retailer had felt upward price pressure from suppliers for the past six months, with wholesale prices for cocoa rising 10 to 15 per cent over the period.

“We haven’t let it affect our prices at a retail level and are just hoping that the fluctuations in the markets will pan out again,” he said.

“But if it continues on this upward trend for another few months we will probably have to start reviewing some of our in-store prices.”

The Margaret River Chocolate Company’s main supplier is international cocoa giant Barry Callebaut, which sources about 90 per cent of its product from Africa. However, Mr Black said the biggest issue facing the company was futures trading in cocoa, which had hurt the chocolate industry.

“Most of the cocoa trading done in recent years is not among people who use cocoa, it is speculators and traders seeking a safe haven away from equity markets and property markets,” he said. “It artificially inflates prices for the people who want to buy cocoa to make and sell chocolate.”

One rumour sweeping London last week was that a major trading house had bought a very large position in cocoa for delivery in July, throttling liquidity in the market and driving up prices.

Jenni Blance, an owner of Chokeby Road in Subiaco, said it was possible the price of stock would rise next financial year if suppliers passed on increased costs. She said Lindt had already signalled it was increasing prices for its bars and Chokeby Road would have no choice but to pass on the rise next month.

Mr Black said sales at the Margaret River Chocolate Company, which sells about 100 tonnes of chocolate a year, had held up well over the past two years, despite tougher economic conditions.

“People are acquiring a taste for better-quality chocolate, so we have found even though the market has been tough globally for the last couple of years and the price of sugar and milk are also peaking at the moment, sales are holding up relatively well,” he said.

Uranium One sells Paladin stake

Just over a month after Uranium One emerged on the register of Paladin Energy, prompting takeover speculation, the Russian-controlled miner has sold its 3 per cent stake.

In a statement today Paladin said it “welcomed” the news that Uranium One had sold its recently-acquired stake.

The Toronto Stock Exchange-listed Uranium One made the announcement overnight.

“Importantly this leaves Paladin as the only fully independent, publicly listed pure uranium producer in the world,” Paladin said in a statement.

Paladin revealed that Uranium One was building a stake in the miner early last month, sparking speculation it could have the African-focused miner in the crosshairs.

Shares in Paladin were 2¢ lower to $3.75 by 9.20am.

Paladin has long been regarded as a takeover target because it is one of the few mid-tier uranium producers in the world.

Prospectors hit Goldfields

as gold price soars

It is somewhere south of Menzies and Greg Clark pulls his specially kitted-up ute off the road and heads into the bush.

There is low scrub, jagged rocks, a long-abandoned mine, and, of course, red earth.

It looks and feels like gold country. And it still is.

So with the price of the precious metal skyrocketing, closing at $US1226.70 an ounce on Friday, it is not surprising that Mr Clark is just one of a steady stream of amateur prospectors to have set up shop in the Menzies caravan park.

Mr Clark and his wife, Chris, arrived 12 months ago from Brisbane on a prospecting holiday and are still there, having found jobs in the town and bought a block.

“I like the community, it’s a nice little town, it’s got potential,” he said yesterday. “And there is gold in the area.”

The couple head out with their detectors whenever they get the chance.

In a week recently they found eight little pieces that Mr Clark reckoned were worth about $300.

“I would like to have found more,” he said. “But gold has got to want to be found.”

The key was to be patient, methodical and determined.

“Gold is where you find it,” he said. “When you think it’s not there, it could be there.

“You have to be patient and try, try, try. And dig every target, never leave one behind.”

Did he have gold fever? “No, it’s a disease. There’s definitely a bug involved,” he said. “There’s one with my name on it. I just don’t know where it is.”

AAP June 25, 2010, 10:31 am

Rio Tinto has formally opened a high-tech operations centre adjacent to Perth’s domestic airport that remotely controls the mining giant’s vast network of mines, rail systems, infrastructure facilities and port operations in the Pilbara.

The operations centre was opened by WA Premier Colin Barnett, after a six months ramp up.

“The operations centre features 200 controllers and schedulers and more than 230 technical planning and support staff, using cutting-edge networks that ensure all Pilbara operations up to 1500 kilometres away are not only controlled from Perth, but can be performed with the maximum efficiency,” Rio Tinto said in a statement.

Rio Tinto chief executive Iron Ore and Australia Sam Walsh said the operations centre allowed the company to operate its Pilbara iron ore operations above nameplate capacity.

“There is no other mining operation anywhere in the world attempting this on this scale,” Mr Walsh said.

The technology would result in a safer workplace, he said.

//

Back to Africa

as Gryphon makes play for Shield

Consolidation among West African gold players is back in the spotlight, with Gryphon Minerals unveiling a friendly scrip bid for Shield Mining that is intended to create a $200 million gold explorer.

Gryphon, which owns the 1.1 million ounce Banfora gold project in Burkina Faso, has already secured a 19.9 per cent foothold in its $23 million target under a pre-bid acceptance deal with several Shield backers.

Gryphon managing director Steve Parsons said deal would give Gryphon an exploration footprint in Mauritania, where Shield owns assets near First Quantum’s producing Guelb Moghrein copper-gold mine.

“We are well resourced and capable of aggressively exploring (Shield’s assets),” he said.

“This acquisition delivers a potential pipeline of new opportunities in another West African country and fits with our strategy to build an important gold company in the region.”

Corporate activity among WA’s West African-focused explorers has long been talked about but few deals have fallen over the line, with an exception in Barrick Gold’s $80 million play for Perth junior Tusker Gold earlier this year.

Gryphon’s modest move is likely to refocus attention on consolidation in the continent, where global miners Barrick, AngloGold Ashanti, Randgold and Lihir are all regarded as potential predators.

Gryphon’s 1-for-3 scrip bid will include a 1-for-11 offer for 21.3 million Shield options with a strike price of 20¢, valuing Shield at 27.2¢ a share.

Former Equigold director and Shield chief executive David Netherway, who plans to join Gryphon’s board as a non-executive director, said the agreement made “excellent sense”.

The offer has been unanimously recommended by the Shield board. It remains subject to a number of conditions, including 90 per cent minimum acceptance.

Shares in Gryphon last traded at 81.5¢ and Shield at 20¢. News of the bid was released after market close late yesterday.

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Sourced & published by Henry Sapiecha