|New Star Financial Opp Fund (See LSE:HFO)
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Real-Time news about New Star Fin (See LSE:HFO) (London Stock Exchange): 0 recent articles
|arc en ciel: Hey Bionic.
Maybe you feel lonely on this board but I believe it's the right place to be.
I bought into Northern Star earlier this year at 38.5c and, after noticing the share price seemed to go up and then stay steady without ever falling during the autumn, added earlier this month at 66.5c.
Also I saw some interviews with the CEO which impressed me with his energy and determination to harness the potential at the company's various sites. According to the company, the bonanza grade just declared at Paulsens and to which you have referred is the highest ever recorded at any gold mine in Australia!!Hence the 90c price now.
The target for the end of next year is an annualised 200,000ozs of produced gold; with a present market cap of around A$300m, I reckon this is going over A$1 soon and will progress in 2012 aided of course by a gold price north of US$2,000.|
November 16, 2011
Northern Star Gets Ready To Redefine The Word “Spectacular” With Drill Results From Paulsens Due Imminently
By Our Man in Oz
The word “spectacular” is about to be redefined, when it comes to gold intersections. Either that, or Northern Star Resources will be on the receiving end of a heavy dose of disappointment when its shares come back from suspension on Thursday 17th November. That’s because the company put itself into a trading halt on the ASX on Tuesday 15th “pending release of spectacular drill results from the Paulsens Gold Mine”.
But given that last week the company’s shares enjoyed a strong upward share price run from assays also described as “spectacular”, and given that the company used the same adjective in its September quarterly report, it had better be pretty good time round. After all, the company filed the mouth-watering assay of up to 638 grams a tonne (20.5 ounces a tonne) without a request for a trading suspension, which means tomorrow’s should be even better. Either that or Northern Star will be accused of gilding the drill results.
After all, that “spectacular” 638 gram intersection managed to move the shares up by A11 cents, or 17 per cent, to A75 cents. That price, the last trade before the ASX agreed to a halt, means that the shares have almost doubled over the past six weeks, and tripled over the last 12 months.
Most of the increased interest in Northern Star can be traced to the Paulsens mine, which it acquired in July last year after paying A$40 million to Intrepid Mines. At the time, Intrepid was seen as getting the better end of the transaction. Not today. Paulsens, under a management team led by Bill Beament, has been the subject of a classic makeover. Costs have been slashed after the company took full control of the mining process, expanded production, accelerated exploration, and acquired nearby assets. This calendar year alone should see Northern Star generate A$40 million in surplus cash from production of 75,000 ounces of gold at a cost of around A$682 an ounce. It will also push ahead with plans to grow the business to 200,000 ounces a year.
Impressive as the financial numbers are, the real interest in Australia today revolves around the straightforward question: what does it take to halt trading in a company because of potentially “spectacular” assays, when a previous spectacular result of 638 grams was not enough to stop trading?
One possibility is that word of the latest assay results has been leaked to the market, though given the tight-lipped nature of the management team a more reasonable explanation is that something ultra-special has been received back from the company’s primary assay laboratory. The initial result is now being re-checked by a second lab to avoid the embarrassment suffered by Venus Metals two weeks ago when it was forced to retract an assay of 4.12 grams per tonne over 82 metres when a check later found minimal gold. Mega oops, and a share price which crashed from A90 cents to A54 cents.
Northern Star, unless the stars are misaligned, will not repeat that mistake because it is in the middle of a busy promotional season, having hauled a tour group of stockbrokers and journalists to its Paulsens site in the iron ore rich Pilbara district of Western Australia last Friday. The first analyst reports from that inspection of the company’s assets have been enthusiastic. Argonaut Securities has describing the drilling results as the best so far – and that was before Tuesday’s suspension request.
Argonaut told clients that the latest drilling confirmed high-grade mineralisation 150 metres down plunge and 50 metres east of the resource envelope reported in March, and that it suggests that two mineralised lodes, Voyager 1 and Voyager 2, might merge at depth. Argonaut wrote that the drill results were a good pointer to the next resource upgrade and represented steady progress in the company’s “two-stage journey from 75,000oz a year to 200,000oz a year.” The company’s plan is to lift output to 100,000 ounces by December next year, and then to add another 100,000 ounces through the construction of a stand-alone plant at the recently acquired, nearby Ashburton project.
At Paulsens is Northern Star has picked up where Intrepid left off, extracting most of its ore from the Voyager 1 orebody while making brisk progress drilling the look-alike Voyager 2 structure. It’s also seeking a third target which it describes as a potential “structural repeat” of the Paulsens quartz host vein on the other side of a gabbro rock intrusion. The theory is that the series of lodes which make up the Voyager system will be repeated in mirror image.
Meanwhile, the production numbers continue to look good. In the September quarter the company produced 17,043 ounces of gold from 84,735 tonnes milled at a recovery grade of 6.74 grams per tonne. But the new material, from the first “spectacular” drill result from intersections in the Voyager 1 lode, compares very well to that. The “spectacular” intersection rang in at 13 metres at 45.1 grams per tonne, with an internal slice in that intercept of 6.6 metres at 82.2 grams, and 0.6 metres at the top assay of 638 grams per tonne.
The super-rich, but narrow assay result is what makes headlines, but the real meat in the Northern Star sandwich lies in thicker and lower grade assays which are following on from earlier results. For instance, on October 13th the company reported 18.8 metres at 62.7 grams per tonne and 6.4 metres at 120.2 grams, assays which have encouraged Bill and his team to locate a third underground drilling rig at Paulsens, and to start designing a new mine plan which will incorporate more ore from Paulsens, and possibly ore hauled from Ashburton too, before it gets its own processing plant. All that is in the future. For now, investors want to see the real meaning of spectacular.|
|jonwig: Bank stocks could be the stocks to lead markets out of the current volatility just as they have led them into this situation, says Paul Goacher, fund manager at EEA fund management.
He believes this could happen even as soon as the next six months. However Goacher says that the hedge fund he runs has not owned any banks recently while EEA overall has held few.
And he says that he will not buy banks until he is certain they have reached their low point and the interbank market opens up again, and is also underweight asset managers. However, Anthony Nutt, fund manager of the Jupiter Income Trust thinks there will be stock picking opportunities among UK financials which are down more than they should be because of pessimism among investors.
He suggests financials and other interest rate sensitive stocks have already discounted so much credit risk, that in a few months time when there is greater visibility the market is likely to rally off a lower base.
Goacher bought back mortgage lender Paragon in October which has since gone down in value because next year it will have do a rights issue to raise financing, as banks are reluctant to lend to each other.
However Goacher says Paragon is still reasonably good quality and believes the stock is worth 300p to 400p. Credit Suisse is also more positive and on Wednesday upgraded its recommendation from "Neutral" to "Outperform" and increased its price target from 145p to 175p.
And last week KBC Peel Hunt upgraded its recommendation on Paragon from "Sell" to "Buy." This is helping the stock to recover which last night closed up 4.52% or 6.25p at 144.5p.
Goacher says Lloyds TSB is good quality because it has been restructuring for seven to eight years and has no sub prime or US exposure. But its share price is still low because quality companies are being brought down by their sector.
But Goacher believes if the share price of such a stock did better then it might encourage other financials up.
He says currently the market is behaving in a sectoral manner, a view also held by Edward Bonham Carter, chief executive and chief investment officer at Jupiter, who says the market making little distinction between stocks and sectors.
But Goacher adds that occasionally you get a good stock which manages to do better than its peers. Today, for example, Alliance & Leicester is up 7.79% at 685p because investors have been encouraged by a positive trading statement, but many other financials are down.
New Star Financial Opp Fund share price data is direct from the London Stock Exchange