El-Raghy’s return symbolises buoyant mood in resources sector as many stocks hit 12-month highs

11th August 2017
Tim Treadgold

It’s been a long time since Josef El-Raghy was active on the Australian stock market, but a return visit is on the way for the man who, with his father Sami, turned a small ASX-listed gold explorer called Centamin Egypt into a $3 billion London-listed gold producer simply called Centamin.

Whether the El-Raghy duo can do it again is a question for investors to consider because all that’s known so far is that a float of their gold exploration interests close to the Plutonic gold mine in WA could be heading to the market before the end of the year.

There are differences between what’s happening now and what happened a decade ago when Centamin Egypt, a business built on the Sukari gold deposit 25km from the Red Sea coast of Egypt, made headlines under the snappy nickname: “Gold of the Pharaohs”.

The Plutonic region in WA lacks an Egyptian Pharaoh but it will soon have the El-Raghy’s because Josef was one of the most interesting characters spotted at Kalgoorlie’s annual Diggers and Dealers conference this week, deep in conversation with a broker from Bell Potter.

As an event, this year’s conference was the most significant in at least five years with the mood upbeat and ratchetting up a notch on each of the three days as the near-record roll-up of 2000 delegates started to appreciate the change which has flipped the negative tone of the past few years to a surprisingly positive mood.

Measuring sentiment is never easy but the consensus of delegates was to assign a score of 6 out of 10 on Monday, with 0 being a depression and 10 a boom (it was below 5 last year). By Tuesday, the rating had risen to 7 and on the final day the man in charge of the event, John Langford, was giving his conference an 8.

What that means for the market over the next 12-months could be quite significant because stronger metal prices, when combined with an improvement in confidence, means that people such as Josef El-Raghy reckon it’s time to launch a new mining venture.

Other people of interest, though not all well known to Australian investors, were also enjoying the improved conditions, including Quinton Hennigh, chairman of Canadian-listed Novo Resources, which appears to have made a significant gold discovery near Karratha on WA’s north-=west coast.

Over the past two months Novo’s share price on the Toronto Stock Exchange has risen by 250 per cent to $C2.83 as news flow builds around the Beatons Creek discovery comprising nuggety gold in an unusual conglomerate setting which looks somewhat like some South African goldfields.

Novo’s Australian partner in the project, Artemis Resources, has enjoyed a similar run, rising from 5.8c to 16c since the middle of last month.

A number of other mining stocks had a similarly good week as investors returned to the sector with at least a dozen resource companies (and service providers) chalking up 12-month share price highs – a measure of sentiment as good as the views of delegates at the Kalgoorlie conference.

Three services providers stood out this week with fresh 12-month price highs. Seven Group, which sells Caterpillar equipment to miners. Lycopodium, which sells engineering and construction services, and Ausdrill, which does what its name says, drills.

News and market-moving events of the week, included:

  • Breaker Resources pleased its supporters with a share-price run to a 12-month high of 79c after filing a report which indicated the potential for an underground phase at the fast-emerging Bombora gold discovery at its Lake Roe project in WA.
  • Explaurum moved to within sight of its 12-month high of 14c when it traded up to 13c after reporting fresh high-grade assays from its Tampia gold project in WA, including an eye-catching 10 metres at 72.94 grams a tonne, with a core in that intersection grading a spectacular 716g/t over 1m.
  • Panoramic Resources continued its recovery with a rise of 2c to 25c as interest grows in the redevelopment of its Savannah nickel and cobalt mine in WA’s Kimberley region, with the potential of more to come as metal markets absorb the news that the Ravensthorpe nickel mine of First Quantum is to be mothballed, again.
  • Eastern Goldfields made waves at Diggers and Dealers amid speculation of a protest over unpaid bills, a threat which failed to materialise but with settlement of the dispute rubbing 4c off the stock’s share price which retreated to 25c.
  • Gold Road Resources ended the week by claiming the title of Dealer of the Year at the Kalgoorlie conference thanks to its joint venture with South Africa’s Gold Fields on its Yamarna project, but didn’t enjoy the same success on the market where its share price slipped 1c lower to 64.5c
  • Peel Resources added 2.5c to 19c after reporting strong copper assays from its Wirlong project in NSW, including 27m at 5.3% copper, and 5m at 15.75% copper from a depth of 286m.
  • Auris Minerals ran out of steam, slipping 1.5c lower to 9c as speculators took some of their money off the table after a sharp upward move which followed the release of high-grade copper assays from its Wodger project in WA.
  • Hillgrove, which operates the historic Kanmantoo copper mine near Adelaide in South Australia, rode the strengthening copper price to a 12-month share price high of 10c on Wednesday before easing back to 9.9c.
  • Rumble Resources reached a 12-month high yesterday of 4.5c as interest grows in its Braeside zinc and lead prospect near Marble Bar in WA, and
  • Magnetic Resources demonstrated that a picture is not only worth 1000 words, it is also worth 4c on a mining company’s share price as it rose to a 12-month high of 14c after publishing photos of gold nuggets retrieved from its Mertondale project in WA.

Image via Centamin website

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