Resources wrap: Prepare for launch

AUSTRALIAN stocks are tipped to perform well this week on the back of renewed optimism out of Greece.

The SPI 200 futures index was trading five points higher at 4255 points on Monday morning.

On Wall Street, markets were mixed late last week on the back of news the US economy had grown at a slower rate at the end of 2011 than economists had first expected.

The major indices were mostly down, with the Dow Jones Industrial average down 0.58% to 12,660.46 while the S&P 500 dipped 0.16% to 1316.33 and the tech-heavy Nasdaq gained 0.4% to 2816.55.

In Europe, Greece should complete a debt swap accord this week after bondholders said they would accept the push for lower interest rates.

Meanwhile, a revised and upgraded resource has further confirmed the status of the Tampakan project in the Philippines as one of the world’s most significant undeveloped copper-gold assets but a question mark still remains over its development pending clarification of an open pit mining ban.

Located in the southern Philippines, Tampakan is held 37.5% by Indophil, while Swiss mining giant Xstrata Copper is the project manager with a 62.5% interest.

Earlier this month, Indophil’s environmental application was rejected pending clarification of an open pit mining ban by the provincial government of South Cotabato. At the time, Indophil said it remained confident the delay could be overcome in the near term with the support of its local corporate shareholders and a committed and aligned response from Xstrata and itself.

The new numbers for Tampakan have increased contained copper to 15 million tonnes from 13.9Mt while gold volumes jumped to 17.9 million ounces from 16.2Moz. Total resources on the property now stand at 2.94 billion tonnes at 0.51% copper based on a 0.2% copper cut-off grade, versus the previous estimate of 2.49Bt at 0.6% copper using a 0.3% cut-off grade. Importantly, the measured and indicated numbers climbed to 2.27Bt at a grade of 0.55% copper from 1.69Bt at 0.6% copper.

In iron ore, Cleveland-based Cliffs Natural Resources has posted its expected full-year results, with Western Australian iron ore production lower than expected. The Asia Pacific iron ore division produced 8.6Mt last year, below guidance of 8.8Mt. Cash costs are expected to be $US66 per tonne, above the estimate of $60-65/t, due to higher mining costs. Revenue is expected to fall in line with guidance of $155-160/t. Cliffs has forecast full-year cash flow of $2.3 billion from its global coal and iron ore operations.

In petroleum, Horizon Oil has beefed up its acreage in Papua New Guinea, taking a 25% stake in Eaglewood Energy’s PPL 259 in Western Province for $2.5 million ($A2.38 million), as it considers a possible LNG development in the country. The PNG-focused company will also carry Eaglewood for future seismic and drilling costs on the permit up to a capped amount of $6.375 million, with Horizon to assume the operator’s role.

Finally, Evolution Mining has reported a busy and successful first quarter and has also announced the departure of managing director Bruce McFadzean. The company announced McFadzean had stepped down to allow the executive chairman and MD roles to be combined and to be held by Jake Klein.

McFadzean’s Catalpa Resources and Klein’s Conquest Mining completed a merger late last year to create Evolution, which is Australia’s fourth-largest gold producer by production. The company’s four mines produced 89,182 ounces of gold in the December quarter, with attributable production of 74,095oz gold at cash costs of $A760 per ounce.