Resources wrap: Mixed leads

THE Australian market is set for a soft week, with mixed leads from overseas and a Thursday public holiday.

Making resources news last week, New Zealand Economic Development Minister Steven Joyce said the Todd-Methanex gas for methanol agreement was a good example of how the New Zealand oil and gas sector could help build and improve the country’s economy.

“The announcement is a positive start for a year which is forecast to be challenging for the world economy,” he said. “This is a good example of why oil and gas development, with suitable environmental protections, forms part of our plan to build a stronger economy.”

The two corporations signed a gas supply contract for Todd subsidiary Todd Energy to supply enough additional gas, primarily from its onshore Taranaki Mangahewa field, to enable Methanex to restart a second train at its nearby Motunui methanol complex for 10 years from mid-2012.

In mining, gold explorer and developer Azumah Resources unveiled a $C20 million ($A19 million) capital raising to grow its kitty to $35 million and bankroll completion of a feasibility study and drilling on its Wa gold project in Ghana. The company will release a short form prospectus offering 50 million ordinary shares at an issue price of 40c each with Casimir Capital RBC Capital Markets acting as joint lead managers and book runners and with Argonaut Securities and Canaccord BGF as co-managers.

The offering has been allocated to a number of new and existing institutional investors in North America, Australia and Europe and remains subject to the approval of the Australian Securities Exchange, the Toronto Stock Exchange and regulatory authorities.

Azumah said the issue, which is expected to close on February 2, would facilitate a higher level of trading and liquidity on the TSX following its listing last September.

Earlier in the week, Woodside Petroleum said it was on track for loading the first LNG cargo in March at its $A14.9 billion Pluto LNG project, as commissioning progresses to plan.

In its fourth-quarter report, Woodside said it did not expect any material change to the advised first cargo date.

It said the Pluto LNG construction was in its final phase, with commissioning and production start-up of sections of the offshore and onshore production systems progressing to plan.

Testing and independent running of major process equipment was also largely complete. The Pluto A platform was declared ready for start-up in November and the subsea well commissioning campaign was completed during December before gas from the Pluto reservoir flowed in the Pluto trunkline. The gas is being held at the beach valve ready to enter the plant.

Onshore, the jetty, storage and loading facilities were operational and subsequent to the end of the quarter, unloading of the commissioning cargo began. The commissioning cargo is being used to cool down the LNG tanks and the LNG transfer lines in preparation for LNG processing.

Finally, Rio Tinto informed its Oyu Tolgoi joint venture partner Ivanhoe Mines it intended to buy further shares to move to a controlling stake in the Canadian company. The standstill agreement between the two companies which prevented Rio from moving beyond a 49% interest in Ivanhoe expired last week. According to Ivanhoe, Rio informed the board in recent weeks it would acquire additional shares in Ivanhoe to move over the 50% ownership threshold. Following an arbitrator’s decision last month, Ivanhoe decided to recommend the termination of a shareholder’s rights plan, which was put in place to block Rio from obtaining control of the company.

The arbitrator ruled the plan might not be in the best interests of Ivanhoe shareholders. Ivanhoe said it would seek shareholder approval for the termination in May but would delay the effective activation of the rights plan until the meeting.