Gold explorer Peel Mining Ltd (ASX: PEX) has fallen from a high of 74 cents one year ago to a low of 19 cents recently, a common story amongst many gold mining stocks. While there are concerns over whether a “floor price” has been reached for gold – which makes valuing gold producers hard enough, let alone gold explorers – broking house Hartleys recently reaffirmed its ‘speculative buy’ rating for Peel. According to The Australian Financial Review, Hartleys also increased its target price on the stock to 32 cents, with the broker stating, “Peel has a number of exciting early stage exploration opportunities which could provide the next discovery.”
Tigers Realm Coal Ltd (ASX: TIG) is positioning itself as a global coking coal company through its development of the Amaam Coking Coal Project in Russia. The Amaam Project contains both the Amaam and Amaam North deposits which are resources estimated at potentially containing 412 Mt and 430 Mt respectively. With the company aiming for first production in late 2015, Tigers Realm is one to watch closely in coming months.
Western Desert Resources Ltd (ASX: WDR) is exciting because it has recently moved from development stage to production. The company is backed by some well-known directors including Rick Allert, Bruce Mathieson and Scott Perrin. The timing of the ramp-up of production unfortunately coincided with unseasonably heavy rains which have affected early volumes shipped. Despite this early setback, management is forecasting that in May the miner should ship 250,000 tonnes. With an expected cash cost of below A$65/ tonne, Western Desert’s Roper Bar deposit is one of the lowest capital cost per annual tonnes of production mines in Australia (according to statements by management) and with a 5-year off take arrangement with the giant Noble Group there are plenty of reasons to keep an eye on Western Desert.
The demand for commodities such as gold, coal and iron ore is likely to remain robust in coming years. Less well understood is the supply side. A major boost in volumes supplied (all else being equal) will obviously push down prices and is a major risk for investors trying to accurately place valuations on mining companies.