Small miners burn up cash
A recent study says Australian miners are burning through so much cash they may be forced to merge with rivals, sell assets cheaply and raise money at discounted rates, according to the Australian Financial Review.
Analysis from corporate accounting firm Ernst & Young shows that a sample of 354 listed base metals and coal companies with a market capitalisation of $500 million or less have, on average, just under two years left of spending at the current rate.
Some risk collapse, the firm says.
“Many of these companies will need to look at deeply discounted asset sales or dilutive capital raisings and although neither option is attractive, as time passes the situation seems to be deteriorating,” Ernst & Young Queensland transactions leader Justin Walsh said.
“Some of the weaker players will no doubt fail.”
SA mines prepare for drop in investment
South Australia’s mining contractors have described local resource sentiment and appetite for exploration as “steady” but are preparing for a drop in capital investment from major resource companies, according to the Australian Financial Review.
Speaking at the Advantage SA conference, exploration group Monax Mining managing director Gary Ferris said demand for new discoveries in some commodities had cooled but other resources, such as shale gas, remained buoyant.
The spot iron ore price has dropped 30% in the past few months to $US111 a tonne but recorded its biggest one-day bounce on Wednesday since October last year to $116.60/t.
Thermal coal prices have dropped significantly and the copper price is also under pressure.
Uni to mine data for deposits
Future mineral deposits in Australia are set to be identified through extensive research using “big data” that has the potential to improve the accuracy of greenfield exploration, according to The Australian.
The University of Sydney is involved in the project, which is part of the $A12 million big data knowledge discovery project, in which computer scientists, financial analysts and natural scientists are combining their expertise in an effort to discover information hidden in massive, multilayered datasets.
