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The Gavin Daly Memorial Shield was won by Bailey Keabel and Jack Pidgeon seen here with Sonia Daly Under 6 team Aboutusgeneric_1 Under 15's Award Winners Aboutusgeneric_2 Under 17 boys Award winners fifo Aboutusgenericimage_3 mining kaleb and Gino mine Mariah and Jay Under 17 Girls team President of Junior Crushers Sean Daly with Special Guest Nick Cotric who was named Rookie of the Year for Canberra Raiders Construction
The Gavin Daly Memorial Shield was won by Bailey Keabel and Jack Pidgeon seen here with Sonia Daly Under 6 team Aboutusgeneric_1 Under 15's Award Winners Aboutusgeneric_2 Under 17 boys Award winners fifo Aboutusgenericimage_3 mining kaleb and Gino mine Mariah and Jay Under 17 Girls team

A bounce off the bottom?
CQ coal deals finally finding a few investors in the market.
Wednesday 08 July 2015  

DESPITE all the bad news coming out of Greece and China, it seems investors might be regaining an appetite for coal investments.

A number of modest recent announcements by small mining companies have been relatively well received by share market investors - a major turnaround on the last two years.

Most notably, Central Queensland coal explorer Stanmore Coal, has enjoyed a 60 per cent increase in its share price following their decision to buy the Wotonga coking coal deposit near Moranbah from Peabody for around $7 million.

While the rise has been off a low base of $0.05,  Bizzell Capital Partners analyst Peter Wright said the Stanmore experience was a sign that investors felt the future was brighter for the mining sector.

“From an equities perspective, however subtle, there are some encouraging signs for the resources sector,” he told Shift Miner.

“It’s important to note that companies are making announcements and getting traction, or a reaction from the market.

“A case in point is Stanmore, they bought the asset a week ago - admittedly not a massive acquisition - but all the same they have seen their share price go from $0.05 to be around $0.08.

“When you look at the small resources index, it had a horrendous run falling from around 7000 in 2011, to 1373 a year ago, that is a massive fall, but the fact that it hasn’t lost ground in seven months is a positive sign.”

While it is clearly not likely to be a bull market for some time, Mr Wright said one of the good things for investors was that all the bad news was out in the open or, in other words, the challenges for the sector have already been factored into the way shares are valued.

“There are fewer unknown, unknowns about the resources sector,” he said.

“The Chinese stock market and what is happening in Greece will have an effect, but once those thing are resolved, people might start looking at the resources sector and realise it is pretty much the only sector still trading at pre GFC levels, and it has been almost totally precluded from the rally we have seen in the last twelve months.

“That is despite some good things happening, like the falling Aussie dollar.

“The spot price for coal has two parts to it it, the price and the dollar, and for reasons I don't understand  no one is paying any attention to the currency implication for Australian miners.

“In Aussie dollars, the coal spot price is getting up there around $75 and small shards of good news like that are encouraging.”

In the last months, two of China’s main share indexes have lost around 35 per cent of their value - which is roughly equal to $A4.27 trillion in wealth.

That's more than double the size of Australia's stock market and 13 times the value of the entire Greek economy.


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