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Western Areas NL (WSA) announced that the ore reserve for the first stage of the planned underground mine at Spotted Quoll has exceeded the company’s expectations. The company said a Probable Ore Reserve of 1,725,000 tonnes at an average grade of 4.1% nickel containing approximately 70,200 tonnes nickel has been estimated from below the Tim King Pit to 525m vertical depth.

Western Areas is very encouraged with the result which should underpin a long mine life of high-grade production from this project,” the company said.

Western Areas said total current Probable Ore Reserves at Spotted Quoll including the Tim King Pit comprise 2,111,500 tonnes at an average grade of 4.3% nickel for 90,100 tonnes nickel.

The company added that further drilling should convert additional Mineral Resources into Ore Reserves at Spotted Quoll.

“First ore production from the Tim King Pit, one of the highest grade nickel mines in the world, is on track to commence in April 2010,” Western Areas said.

The company said current open pit and underground Ore Reserves at Spotted Quoll should support a 10-year mine life.

“Excellent potential exists to extend the mine life and target production rate,” Western Areas said.

As at 1041 AEDT, Western Areas were up 9c to $5.01.

Arrow Energy Limited (AOE) requested its shares be placed in trading halt this morning pending the release of an announcement concerning an update to the takeover proposal received from a company jointly owned by Royal Dutch Shell and PetroChina. The company said the trading halt would be lifted prior to the commencement of trade on Tuesday 23 March or until the announcement is made.

Fortescue Metals Group Limited (FMG) said that it had upgraded its resource estimates for its Solomon Project within the central Pilbara region by 300 million tonnes to 2.7 billion tonnes. Fortescue said the resource upgrade would underwrite the stage 1 development operation at Solomon with a target production of 60Mt of product per year based on 40Mt of CID and 20Mt of bedded Brockman ore, the company said. The company added that a further 88 million tonnes would be added to indicated resources for total 720 million tonnes.

Macarthur Coal Limited (MCC) said its port and rail services through Dalrymple Bay Coal Terminal have been suspended due to severe weather conditions associated with Tropical Cyclone Ului. The company said consequently the company would today declare force majeure in relation to all accepted vessels.  Macarthur said that at this stage the company is unable to advise whether the suspension of port and rail services would impact upon its full year sales forecast of 4.8Mt to 5.0Mt.

 

 

Metcash Limited (MTS) has decided to axe its Campbells Cash & Carry (“CCC”) business as it struggles to compete with branded convenience stores such as 7 Eleven. Metcash said the company would set aside $15.4 million in restructure provisions.

“For this reason, normalised earnings guidance is maintained at 7-10% EPS growth over the 2009 year.

Under the plan, CCC will see shut down 8 warehouses and merge the remainder with the CWD division.

Metcash’s Campbells Wholesale business will still retain three profitable operating divisions including Campbells Wholesale (“CWD”), CStore Distribution (“CSD”) and Foodlink.

Commenting on the closure, CEO of Metcash, Andrew Reitzer, said that “although this is a painful action to have to take, especially having regard for the excellent staff we will be losing, it is a necessary action to ensure the ongoing health and vitality of the overall Campbells Wholesale business”.

At 1025 AEDT, Metcash shares were down 4c to $4.11.

Telstra Corporation Limited (TLS) said there is currently a significant gap between Telstra and NBN Co on what each party considers to be an acceptable financial outcome in regards to the negotiations regarding the future of Telstra’s fixed local access network and associated matters. The company said there are also a range of commercial matters that are yet to be agreed.

Telstra’s statement follows what it said, “have been a number of recent media articles speculating on the status of Telstra's negotiations in relation to the National Broadband Network”.

The company said the Government and NBN Co are approaching the negotiations on a “business-to-business” basis.

Additionally, Telstra said it is discussing ways in which the gap can be bridged, recognising that the Government has highlighted the national interest benefits of the NBN and reform of the telecommunications industry.

“Further, as Telstra has stated in its submissions to Government, a range of legislative changes and regulatory approvals will be needed for an agreement to be implemented,” the company said.

As at 1021 AEDT, Telstra shares were unchanged at $3.17.

MAp Group (MAP) this morning reported an increase in traffic across its portfolio of airports, including a 12.3% increase at its flagship Sydney Airport. The increase in numbers was, once again, driven by visitors from the US, which saw a 20% increase in passenger numbers.

MAp CEO, Kerrie Mather, said the airports continued to recover from the GFC, as well as benefit from additional capacity.

“MAp’s airports have shown strong growth in February and particularly pleasing is the double digit growth achieved at Sydney and Copenhagen,” Ms Mather said.

”Passengers also welcomed the significant upgrade of the facilities at the International Terminal.”

Passenger numbers through Sydney airport included a 31% hike in Chinese visitors, positively impacted by the later timing of the Chinese new-year, the company said.

Other country’s that have come to Australia in greater numbers include France and New Zealand, up 18% and 15% respectively.

In total 2.7 million passengers passed through Sydney Airport in February.

Across the group’s European airports, Copenhagen and Brussels saw numbers increase 10.4% and 4.9% respectively.

At the open Friday, MAp shares were trading at $3.08.

Navitas Limited (NVT) announced the execution of a Recognition and Articulation Agreement with Edinburgh Napier University for the establishment of the Edinburgh International College (“EIC”). The company said under the agreement it would have access to the university’s teaching and other facilities, as well as accommodation and administration facilities at the campus. Navitas said with expected strong demand for student enrolments, EIC is expected to follow the pattern of other Navitas’ colleges and reach operational break even within 18 months.

Mirvac Group (MGR) issued and priced a new $150 million five-year fixed AUD Medium Term Note into the domestic bond market for a margin of 265 basis points. The group said the transaction was more than two times oversubscribed with a diversity of over 20 accounts and strong cornerstone interest. Mirvac said the earnings impact of this debt issue is in line with expectation and accordingly our earnings guidance of 9.2c per stapled security for FY10 remains unchanged.

The Dow Jones extended gains into an eighth straight session Thursday, while the S&P 500, a broader selection of stocks, dipped below the line. Industrial stocks, such as Boeing, rallied, while the banks weighed.

In the all-important employment news, Americans filing new claims for unemployment fell for the third straight week, from 462,000 to 457,000, although the figures were slightly worse than expected.

Other economic indicators also point towards a steady inflation rate as interest rates hover near zero.

The Dow Jones rose 45.50 points, or 0.42%, to 10,779.17, the S&P 500 sank 0.38 points, or 0.03%, to 1,165.83 and the NASDAQ gained 2.19 points, or 0.09%, to 2,391.28.

Among the banks, Citigroup dipped 0.7% and Bank of America was 1.1% below the line. Wells Fargo slid 0.9%.

Apple rose 0.3%. The Wall Street journal reported the tech giant had pre-sold hundreds of thousands of its iPad devices before their official release in early April.

Microsoft dipped 0.1%, while Google and Yahoo! edged 0.2% and 0.4% higher respectively.

Wal-Mart, the largest private sector employer in the US was flat, while Costco dipped 0.1% and Sears edged the same amount higher in what was a steady day’s trade for the sector.

Courier company Fedex upgraded its earnings guidance, sending its stock 3.2% higher.

Aircraft manufacturer Boeing rallied 2.2%.

Elsewhere, heavy machinery maker Caterpillar shed 0.8% as it said sales had fallen by 30% in the three months to mid-February.

NYMEX light crude oil for April delivery fell US73c to settle at US$82.20 a barrel, although the major oil plays were barely changed for the session.

COMEX gold for April delivery rose US$3.30 to settle at US$1,127.50 per ounce.

European Markets 

European stocks lost ground as concerns surrounding the financial bailout of Greece resurfaced. Banks were among the stocks that weakened, while the healthcare sector was in favour.  

The benchmark UK FTSE 100 dipped 2.01, or 0.04% to 5,642.62. The French CAC40 shed 19.71, or 0.50% to 3,938.18, while the German DAX lost 11.97, or 0.20% to 6,012.31. 

British banks Royal Bank of Scotland and Lloyds dropped 3.6% and 3.2%. Barclays and HSBC were 1.8% and 1.7% below the line.  

Deutsche Bank, BNP Paribas and Societe Generale slid 1.3%, 0.9% and 0.8% respectively.  

Greek banks were heavily sold as the country denied a report it was set to ask for aid from the International Monetary Fund.  

GlaxoSmithKline led pharmaceuticals higher with a 2.7% gain after Novartis returned US rights to a drug thought to be a generic copy, therefore a rival, of one of GlaxoSmithKline’s. 

Miners Rio Tinto and BHP Billiton lost 1% and 0.6%. BG Group advanced 2.2% on reports of Exxon Mobil's interest in the gas producer. 

Adidas climbed 3.4% after Nike beat expectations for the third quarter on Wall Street.  

Japanese Markets

Japan’s Nikkei fell off its two-month high as property stocks led the slide. Exporters struggled as the yen strengthened against the euro following a report Greece could ask for financial assistance from the IMF.

The Nikkei 225 shed 102.95, or 0.95% to 10,744.03. 

Mitsui Fudosan Co. and Mitsubishi Estate Co. lost 2.4% and 3.8% after Morgan Stanley downgraded its view on Japan’s real-estate industry.  

However, real-estate asset manager, Kenedix added 2.3% after saying it would invest US$333 million in Japanese properties this year.  

Banks Mizuho and Mitsubishi UFJ dipped 1% and 0.6%.  

Nikon Corp. and Olympus Corp. fell 4.2% and 2.3%, while Canon dropped 2.8%.  |

Automakers Honda, Toyota and Nissan lost between 1% and 1.5%. Mazda shed 2%.

Hong Kong Markets

The Hang Seng lost ground Thursday as oil stocks paced a decline in the price of crude. Banks edged higher, while China Mobile was the outstanding stock on the Hang Seng.

The Hang Seng shed 53.82, or 0.25% to 21,330.67.

Bank of China and sector heavyweight HSBC were both 0.3% higher, while ICBC gained 0.2%.

China Mobile, the country’s largest mobile phone provider, rose 1.2% after posting a 3.3% rise in fourth-quarter profits.

Foxconn International, the world’s largest maker of mobile phones, edged higher on the news, up 0.7%.

Li & Fung spiked 2.7%, while shoe maker Yue Yuen Holdings was flat.

Oil stocks were lower, including Cnooc, which gave up 1.2% and PetroChina, down 0.7%.

Citi has downgraded Seven Network (SELL, price target $7.30), unconvinced by the value of the WesTrac deal. The broker argues that the SEV shareholders will face a greater risk profile following the merger.

Citi noted that the Independent Expert values the new SGH shares at a lower range than their valuation of SEV shares. SGH’s valuation range for minorities is $7.08 to $8.57, and SEV’s valuation range for minorities is assessed at $7.14 to $9.18, the broker says.

Citi says minority shareholders in SEV would be exposed to a raft of additional risks, including currency risk on pricing, credit risk on customers, country risk, competitive threats, and as noted above, potential capital demands to finance the growth.

The brokers says the merger provides of use for SEV’s $1 billion cash, but argues that a buyback of SEV shares, while delivering a greater valuation range, delivers a higher mid-point than the status-quo or merger.

Citi says it is unlikely that an alternative offer will emerge, urging investors to take advantage of the recent rally to take profits.

SEV shares were trading at $7.76 prior to the open of trade Friday.  

The local share market rallied through the afternoon to finish the day 0.2% higher. The mid-cap miners joined property stocks and the big banks to lead the market upturn.

In economic news, the Melbourne Institute Household Financial Conditions index decreased from 34.5 points in the December quarter to 28.8 points in the March quarter. The first fall in four quarters was largely attributed to the four interest rate rises in the past six months.

At the end of the day, the All Ords had gained 10.8 to 4,877.7, while the ASX/200 put on 9.9 to 4,863.1. Over 2.7 billion shares worth around $7 billion had changed hands.

The Energy sector was 0.3% higher at the close, reversing morning losses.

Woodside put on 45c, or 1% to $46.25, while Origin and Santos weakened 0.8% and 0.9% each to $16.50 and $14.22 respectively.

The price of crude rose 1.5% in New York overnight to a two-month high.

Coal stocks were the big improvers as prices for contract settlements continue to beat expectations.

Whitehaven rose 1.8% to $4.98. Coal & Allied and Centennial Coal climbed 2.7% and 2.8% each. 

Karoon Gas surged 4.6% to $8.33.

Metals prices in London were all remarkably between 1.6% and 1.8% higher as the Materials and Resources sector gained 0.2%.

BHP Billiton slid 14c to $43.16 and Rio Tinto added 29c to $76.99.

BHP said today it believes the iron ore production JV with Rio can be finalised this calendar year. Meanwhile, the company's financial arm won a $2.2 billion court battle with the Australian Taxation Office yesterday after the Federal Court dismissed the ATO’s appeal against a Federal Court decision.

Chemicals and explosives company Orica rose 91c, or 3.5% to $26.72, while Iluka soared 5.9% to $4.14.

The big four banks moved either side of the gain as the Banks and Financials sector advanced 0.4%.

In the positive, ANZ and CBA added 1.1% and 0.8%, while NAB and Westpac were down 0.3% and 0.1%.

The insurers were the main group to weigh on the market, with QBE shedding 46c, or 2.2% to $20.76. IAG and Suncorp-Metway both retreated 1.2%.

Westfield led Property Trusts 1.6% higher. The sector heavyweight added 26c, or 2.2% to $12.10, with most of its peers rallying to late to also post gains.

Goodman Group, the outstanding stock in the sector over the last 18 months, added 2.4%.

A 1.9% drop to $39.10 from Leighton saw that the Industrials sector was 0.3% in the red.

Brambles rose 2c to $7.43, while Qantas and Transurban gained 2c to $2.85 and $5.22.

Corporate Express dropped 2.5% to $5.57 after receiving two broker downgrades in reports this morning. Yesterday, the company recommended shareholders accept US-based Staples offer to buy all the shares in Corporate Express for $5.60 each.

It was a mixed day for Consumer Discretionary stocks, which dropped 0.3% overall.

Crown, Billabong and Newscorp were between 0.5% and 0.7% lower.

Pacific Brands put on 2.7% to $1.355.

Kathmandu shares rallied 9.8% to $1.91 after beating estimates with an $11.3 million loss for the six months to 31 December 2010.

The Consumer Staples sector was up 0.2%, although Wesfarmers and Coca-Cola Amatil were both flat, while Woolworths rose 0.1%.

Telstra gained 4c to $3.17 as the company’s potential split remains in question. The Telecommunications sector added 1.1%.

Around the region, the Nikkei 225 shed 39.5 to 10,807.5, while the NZSE50 put on 19.7 to 3,220.7. The Straits Times Index added 5.0 to 2,924.3. The Hang Seng was up 34.3 to 21418.8

Spot gold was trading at US$1,122.93 per ounce, while the Aussie was buying US$0.9212.          

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Sigma dividends unlikely
Sigma Pharmaceuticals said that reductions in carrying cost of goodwill and other write downs would affect the company's bottom line as it prepares to report half year results, expected to be reported on 23 March. The expected reduction in profit for the company meant that it wasn’t expecting to pay dividends in the second half of the year.

Sigma shares remain suspended at 90c.

CBH directors recommend Toho proposal
A committee of directors of CBH Resources, independent of the company’s largest shareholder Toho Zinc Co., Ltd, said it considers the revised Nyrstar Proposal cannot be successful in its current form and instead endorsed the revised Toho Proposal and recommended it to CBH shareholders, subject to no superior proposal emerging. The committee said that given the voting thresholds that apply under a scheme of arrangement, Nyrstar’s recent revised proposal would clearly fail.

At the close, CBH shares were up 0.5c to 19c.  

BHP confident of completing Rio deal in 2010
BHP Billiton believes it can finalise the Western Australia iron ore production joint venture with Rio Tinto this calendar year. As part of its commitment to increasing its capital expenditure to around $20 billion next year, BHP plans to spend $5.8 billion on the equalisation payment for the JV.

At the bell, BHP shares were trading down 14c to $43.16.

IPO costs slash Kathmandu profits
Kathmandu, which first listed on 13 November 2009, has posted an $11.3 million loss for the six months to 31 December 2010. The major driver for the loss was the company’s costs associated with listing on the ASX, without which the clothing retailer would have posted a $3.6 million profit, from a loss last year of $2 million.

At the end of the day, Kathmandu shares were trading up 17c to $1.91.

OZ Minerals Limited (OZL) announced an initial JORC compliant Inferred Mineral Resource at the Okvau project in Cambodia of 8.1 million tonnes at 2.3g/t gold for 605,000 ounces of contained gold. The company said the tenor and size of the initial Okvau Resource has provided OZ Minerals sufficient encouragement to continue exploration in the Okvau district. OZ Minerals said the next phase of exploration in Cambodia would aim to give the company a clear indication of the potential for more than 2 million ounces of gold in the Okvau district. The company said based on the delineated drill targets described it remains confident of discovering further Okvau-style mineralisation and adding to the current resource inventory.

Macarthur Coal Limited (MCC) said it has commenced settlements with customers for the purchase of the company’s low volatile PCI coal for the Japanese fiscal year ending 31 March 2011. The company said the settlements have resulted in shorter term pricing structures including quarterly and six monthly pricing and are in line with market settlements.

Metals X Limited (MLX) announced it had completed the sale of 50% of its Tasmanian assets for $50 million and the formation of a 50/50 joint venture between its subsidiary Bluestone Mines Tasmania Pty Ltd and YT Parksong Australia Holding Pty Ltd. Metals X said the JV would operate as Bluestone Mines Tasmania Joint Venture Pty Ltd. Meanwhile, the company said its Renison operations have continued to consolidate and strengthen its production for the months of January and February, operating at an annualised production rate of 8,000 tonnes of tin metal in concentrates. Metals X said production for the two months was 1,300 tonnes of metal in concentrate (December quarter 1,426 tonnes) resulting in unaudited EBITDA of $8.84 million and a net cash flow of $6.85 million.

Murchison Metals Limited (MMX) announced that the Oakajee Port & Rail (“OPR”) is now targeting initial capacity of 45 million tonnes per annum at the new Oakajee Port. OPR also announced Karara Mining (Gindalbie Metals – Ansteel joint venture), Crosslands Resources Ltd and Sinosteel Midwest Corporation as the potential foundation customers for the port and rail infrastructure projects. Murchison and Mitsubishi Development Pty Ltd each own 50% of OPR and Crosslands. Murchison said there is potential for further expansion of Oakajee beyond 45mtpa to meet additional demand from foundation and expansion customers.