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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (30937)	1/8/2009 1:05:35 PM
From: LoneClone	Read Replies (1) \| Respond to of 194794

Miningmx editor's 2009 stock picks David McKay Posted: Wed, 07 Jan 2009 miningmx.com [miningmx.com] -- FOR MUCH OF 2008, the perception was the resources industry was immune to the global economic meltdown. This view was based partly on the resilience of China and continued metals demand from the country’s rapidly urbanising society. The extent to which this view was misplaced is reflected in the performance of my 2008 stock picks. The word massacre comes to mind. On the basis of share price performance from January 2 to December 10 2008, my portfolio was still 65% down against a 33% decline in the Satrix Resi over the same period. On the basis of internal rate of return, the consolidated performance of my shares, all of them mining stocks, was -181.56%. Assuming you’ve now stopped laughing and can resume reading, Pamodzi Gold numbered among my selections. With an IRR of -100%, it was among the JSE’s worst performing stocks. Here are the others: BHP Billiton (-14%) South African Coal Mining Holdings (-94%) Uranium One (-100%) Jubilee Platinum (-100%) This year's stock picks are: NewGold exchange-traded fund (ETF) So much for history. Analysts reckon the market will get worse before it gets better which doesn’t bode well for resources investors. Still, there must be some traction left in the gold-backed exchange-traded fund NewGold based on gold’s long-standing and much revered argument that it is a tangible store of wealth. BHP Billiton I’m sticking with BHP Billiton because I believe in its argument it possesses superior relationships with clients and will benefit from it. Obviously, its sheer heft and diversified asset base will protect it against a bear market more than most. And having absorbed the oil price decline, any recovery in that commodity will be beneficial. Exxaro Resources Diversified in coal and mineral sands, as well as zinc, Exxaro is a well-run business that has already showed signs of picking up its head after a hammering in 2008. Exxaro also has a 20% stake in Kumba Iron Ore which produces a niche ore that protects it, to some extent, from the decline in iron ore demand from China. Anglo American Similar rationale to holding BHP Billiton. Fairly defensive play which has already taken the pain of reining in the demands on capital expenditure. Impala Platinum Perhaps the riskiest call of all this year (who would have thought) but the company has to find a suitable bid for Mvelaphanda Resources/Northam Platinum, and still hasn’t yet made a call on its capital expenditure burden. But I’m betting a bid for Mvela Resources is reasonable and adds value while let’s suppose the US automakers survive the cut helping to stabilise demand for platinum autocats. Any bet on mining resources is a bit of a Hail Mary pass on China meeting its 20-year average GDP growth rate of 9%. But the investor has still to make the choices from which I have absented the junior mining sector. Exploration plays and start-up ventures are heavily disadvantaged in this current market where there’s a need for debt. So I’ve preferred companies with balance sheet strength and flexibility.