The benchmark S&P-ASX 200 index dipped to a low today of 5094.3 points this morning before closing the session 38.8 higher at 5144.1, after a 2% rise in the previous session, while the All Ordinaries added 26.8 to 5188.4.
While the broader market rebounded, the miners struggled, with BHP Billiton ending the session down $A1.13 at $37.55, while rival and takeover target Rio Tinto closed $4.90 lower at $115.20.
Rio has inked a deal with junior explorer Iron Ore Holdings over the potential development of the Phil’s Creek deposit with the mine to be owned and operated by Iron Ore Holdings once the feasibility of the deposit is proven.
Iron Ore Holdings would also maintain ownership of the ore until it reaches the Yandicoogina stockyard. After mining, however, Rio would purchase the iron ore and transport it for sale to its customers.
The project, only 5km from Rio’s Yandicoogina mine, is estimated to have a 1.5 million tonne export potential from an 8.3Mt inferred resource, grading 58.1% iron.
Shares in Iron Ore Holdings soared 33% to a high of 76c before cooling to close 5c higher at 62c.
The bulk of base metals were weaker on the London Metal Exchange overnight with three-month copper closing down 0.62% to $US8080 a tonne, nickel down 2.7% to $19,950/t, tin down 1.3% to $23,100/t and aluminium down 0.96% to $3006/t.
The exceptions were three-month zinc and lead, which closed up 4.3% to $1925/t and 3.4% to $2212/t respectively.
The spot gold price, which fell almost 3% overnight, rebounded today and was trading $4 higher at $923.85 an ounce at 3:54pm EST.
Gold plays on the Final Call watchlist closed lower with Newcrest Mining down $A1.72 at $29.40, Lihir Gold down 15c at $2.83 and Sino Gold Mining down 29c at $5.67.
Newcrest announced a mixed second quarter result with gold production coming to 435,120oz of gold, down 1% on the previous quarter, while copper production gained 6% on the previous quarter to 22,394t.
The company’s flagship Telfer mine in the Kimberly region of Western Australia recorded production of 146,101oz. While this was higher than the March quarter’s 130,930oz, it was significantly lower than the June quarter 2007, when production hit 167,880oz.
Newcrest said Telfer’s production was affected by the gas shortage in Western Australia caused by the explosion at Apache Energy’s Varanus Island operations.
Meantime, Australasian Resources closed 33.5c higher at $1.53 today after announcing it had received a merger proposal from Resource Development International, which is controlled by its major shareholder Professor Clive Palmer.
Australasian said in a statement that it had received an all-scrip merger proposal from RDI, which places a notional value of $A2.20 on each Australasian share.
Under the terms of the proposal, existing Australasian staff would be engaged to manage RDI’s iron ore division.
Australasian said the proposal was not a formal offer by RDI for Australasian shares.
Palmer currently holds a 66.4% stake in Australasian.
