Pilbara miners hammered by RSPT

THE federal government’s resources super-profits tax has been a dagger through the heart of resource companies in the Pilbara, with the share prices of the vast majority of miners operating in the region well down since the tax was announced.
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Nick Evans

MiningNews.net gathered a list from Intierra Live of companies with projects at the pre-feasibility stage or later in the region, to compare their performance on the stock market with the major indices in the sector and on the broader market.

While the Australian share market has also slumped in recent months, on concerns about debt levels in Europe and a slowdown in China, MNN’ research shows that companies anchored in the Pilbara have been disproportionately hurt since the release of the Henry Tax Review at the beginning of March.

For comparative purposes, since April 30 the S&P-ASX 200 had lost 10.4% to the close of trading yesterday. The S&P-ASX 300 Metals and Mining index had lost 8.69%, the S&P-ASX Financials index 13.08%, and the Small Ordinaries 11.17%.

At the close of trading yesterday, of the 31 companies with later-stage projects or operating mines in the region, only two – Giralia Resources and CBH Resources – have made gains since the close of trading on April 30, just before the Henry review was released.

Giralia, which sat at $2.09 on April 30, closed yesterday at $2.28 after releasing a resource upgrade at its McPhee Creek iron ore project in the Pilbara.

CBH, which is seeking joint venture partners for its Panorama zinc-copper project in the Pilbara, gained marginally since the end of April but its share price has been largely propped up by the ongoing takeover discussions with Japan’s Toho Zinc.

It’s a tale of woe for the rest, however.

Despite posting excellent financial figures at the end of the first quarter, and increased production from its flagship Nifty copper mine in the Pilbara, Aditya Birla has been hammered on the markets since the end of April, slumping nearly 36% in the past few weeks from $1.08 to 69.5c.

And despite Hazelwood Resources saying its Big Hill tungsten project will not be affected by the RSPT, the company has had a tough time on the market since the announcement of the new tax.

Hazelwood shares reached a 52-week high of 33c on April 20, and were sitting at 31c at the close of trade on April 30, but have since slumped to 19.5c, a loss of 35.48%.

Flinders Mines, Fox Resources, Prairie Downs Metals and Northwest Resources have all also lost more than 30% of their value since the end of April.

Emerging iron ore producers BC Iron and Brockman Resources have also recently played down speculation that their Pilbara projects will be impacted by the RSPT, but both have suffered, with BC Iron down 15.47% to $1.53 and Brockman down 10.99% to $3.24.

Shareholders in the big Pilbara players have also watched their portfolio devalue over the past month.

Atlas and Aurox, tied by their merger plans, have dropped 25.99% and 25.61% respectively. Fortescue Metals Group, which has led the charge against the RSPT, has dropped by 17.47% over the period.

The big diversified miners have been somewhat protected by their other projects, with Rio Tinto down by 11.3%. BHP Billiton is the only major to have beaten the Metals and Minerals index over the period, down by 8.56% in the period.

Newcrest, buoyed partly by strong gold prices, dropped by 3.75% in the past month, from $31.85 on April 30 to $31.30 at the close of trade yesterday.

And curiously, the company with a project in the Pilbara that has done the best since the end of April – Intrepid Mines, with its Paulsens Gold Mine – announced in early May plans to sell the project to Northern Star Resources and concentrate on its Indonesian projects.

Intrepid has surged 37.18% in the period to 53.5c at the close of trading yesterday – but MNN is pretty sure there can’t be any connection between the two events.