The Gillard Government’s Indigenous Employment Program has given sixty-eight Indigenous Australians from North Queensland an opportunity to develop their skills and be placed into jobs in the mining or civil construction industries.

The Myuma-Dugalunji Program 2011-12 commenced in September with participants from remote Gulf and Cape Communities and regional towns in North Queensland.

According to Minister for Indigenous Employment and Economic Development, Julie Collins the program is part of an investment by the Gillard Government of more than $1.25 million.

“Like previous participants in this program, these latest recruits will complete a 13-week residential program at Dugalunji Camp, east of Camooweal,” Collins said.

“There they will receive pre-employment training, life skills training and experience operating and maintaining heavy equipment to help get them ready for work.

“Once they have completed the program, there are a range of experiences and employment opportunities on offer for the participants with local mining and construction companies.

“Myuma has strong links with many of the mining companies in the region to maximise the employment outcomes for the participants.

“I congratulate Myuma Pty Ltd and the Dugalunji Aboriginal Corporation on this innovative program.”

The program will result in Indigenous job seekers venturing from locations across Queensland, including Aurukun, Mt Isa, Dajarra, Cairns, Mt Garnett, Ravenshoe, Townsville, Ingham, Yarrabah, Charters Towers and Palm Island in search of training and employment opportunities.

Senator for Queensland, Jan McLucas said the Gillard Government’s Indigenous Employment Program would have flow-on benefits.

“It important that Indigenous Australians in our more remote areas, like the Cape and Gulf, have access training and employment opportunities,” Senator McLucas said.

“The mining and civil construction industries are demanding skilled workers and this project is equipping local Indigenous people with the skills, confidence and knowledge to be part of these growing fields.

“Creating pathways to real jobs is a fundamental part of closing the gap between Indigenous and non-Indigenous Australians.”

Minister Collins said Indigenous employment was an issue the Government is addressing in the long term.

“Over the next four years the Gillard Government has invested almost $650 million to the Indigenous Employment Program and $50 million to the Indigenous Youth Careers Pathway Program,” she said.

“This is part of our target to create more than 100,000 jobs for Indigenous Australians by 2018.”

For speculators and market participants the last eight months have been extremely tough going and for the stock pickers amongst us the viability of our strategy would have been tested.

The junior resource sector after a positive start in January/February 2011 has been decimated due to extreme Dow volatility and European debt concerns despite strong precious and base metals prices on a historical basis.

When I entered the broking industry in 1998 my aim was to identify juniors that had the potential to increase five times to ten times in value.

 

What upset this process was the lunacy that was the Dotcom bubble where anyone reporting a move away from mining and into something tech or website related was rewarded with a mind boggling market capitalisation.

Mining shells were suddenly transforming into what were at the time, “investment grade” stocks and the madness continued until mid-April 2000 when the NASDAQ and Dow spoilt the party.

Since Dotcom there have been a number of bubbles in iron ore, coal, childcare, retractable syringes, potash/potassium and in 2006/2007 the uranium bubble was spectacular as it was frightening when buyers were simply exhausted.

Prior to the recent carnage on world markets both geothermal and shale gas were looking likely prospects and it remains to be seen whether or not their stories will continue to evolve with renewed enthusiasm.

Despite fads coming and going there were still juniors graduating through the ranks and a number were still able to see multiple share price upside amongst the negativity.

When Ramelius Resources) drilled into 48 metres at 154 grams per tonne gold in May 2007 those who purchased and held the stock through the tax loss selling of June 2004 were rewarded with a 50-bagger.

Those who kept the faith in Sandfire during its friendless days, sub 10c, were duly rewarded in 2009 with the discovery of high-grade copper at Degrussa that resulted in its share price eventually powering past $8.00.

 

Sandfire Resources’ Degrussa project. Source: Company web site.

If you had access to a Delorean during the Global Financial Crisis I am sure we all would have loved to have gone back in time and scooped up all those sub 20c shares in Ivanhoe Australia, which despite listing at $2.00 found itself a penny dreadful shortly thereafter.

The Merlin discovery did not hurt its cause and propelled the company’s share price through $4.00 in November 2009.

What I have found with the benefit of hindsight it is that almost every financial panic and severe market correction provides the best buying opportunities and odds of nailing a ten-bagger.

I have also learnt that when you are being bombarded with negativity and find yourself glued to CNBC at all hours it is often hard to think rationally about the fundamentals of some of the junior resource companies you know you should be buying.

I have also discovered that being a stock picker – no matter how hard the going gets – actually pays off in the long run and keeps you in the game until the next bubble arrives.

Here are some “rational thinking” exercises I apply to some of the junior resource companies I am holding. I will not name the companies; however, you should get the idea:

–    Market capitalisation is $14m and they have $7.5m in the bank. A good start!

–    They have a gold plant ready to produce gold and JORC resources.

–    They are building their ground holdings in areas that are in viable carting distance from their plant.

–    The stock is very tightly held and management seem enthusiastic, passionate and experienced.

Now surely something must be wrong here?

What could happen once the market improves and others start to see the value?

What if they actually succeeded and how great is the upside potential?

Here is another one:

–    Market capitalisation of $13.9m with cash/investments around $8m.

–    Management team responsible for one of Australia’s largest mineral discoveries in 2001.

–    A high quality industrial metal project, with a pending iron ore resource and a gold project that has the potential to be revitalised.

–    An excellent flow of high risk/high reward projects that offer shareholders multiple upside potential.

I could apply this to a number of other companies; however, it is apparent that what we are experiencing is an abnormal market where fundamentally undervalued juniors are suffering from broader economic issues.

Whilst it is terribly difficult to be on the buy side during market meltdowns, I have noticed that fundamentals have a habit of coming to the fore and regardless of what happens in Greece stock pickers are still going to be eventually rewarded if their research stacks up.

If you are game enough to look at a top 40 music chart you will struggle to see many songs created only using guitars, bass and drums.

It does not mean there will never be another decent rock album released, it just shows that trends and fads will emerge but deep down all of us forty something’s know what real music is.

The art of stock picking has been around for hundreds of years and the strategy of buying low and selling high will remain constant as long as stock markets are allowed to operate.

Looking back, what we are experiencing now feels similar to the fantastic buying opportunities that presented themselves in 2004.

The key for stock pickers is to be able to think rationally during irrational periods and not to be scared out of sound investments.

Out of the current malaise there will be a number of major discoveries and once fear is replaced with the “fear of missing out” we may even witness the return of the speculative bubble.

Stock picking in every bear market will be tested as a viable strategy. However, it is far from dead.

Tony J Locantro
Email: tony@locantro.com

About the Author: Tony Locantro is the Managing Director of Gold Australia Pty Ltd, the publisher of Locantro’s Life.

This article was sourced from the December 2011 edition of

While we were at the Greenland Day conference The Roadhouse took the opportunity to catch up with Ram Resources managing director Mike Drew.

Ram Resources was one of the earlier Australian miners to head to Greenland. When did you arrive and what attracted you to go?

We acquired the Motzfeldt project in early 2010. What attracted us was first off, the potential of the project, which is always important. The second was that we really liked Greenland as a mining jurisdiction.

Could you give us a quick snapshot of the Motzfeldt project?

Motzfeldt is very much a true multi-element project in that it contains tantalum, niobium, zironian and rare earths.

It’s one of those projects that from which we could potentially produce three or four different products.

Each one of those would contribute individually to the project’s operating costs, and importantly each one, with the exception of zircon, is on the critical materials list.

Each also has a different economic driver. Tantalum is electronics and alloys, niobium is high-strength low-alloy steels and rare earths is electronics, alloys, chemical catalysts etcetera.

So, hopefully we could be in the situation where steel is down so niobium is down but electronics and catalysts are going strong, therefore so are rare earths.

Source: Company presentation

Greenland is obviously a mining-friendly country, so is that an advantage for a foreign mining company coming in to work there?

We think so. The BMP (Bureau of Minerals and Petroleum) does a lot of work directly promoting the industry. It’s always encouraging when people genuinely want you to operate within their borders.

Also, from a mining perspective, in Greenland you only need to deal with the BMP while here in Australia for example, it is possible that you have to deal with a number of different government departments.

You basically only have one rubber stamp process to move through?

Exactly, it is nice too, compared to larger mining jurisdictions, that these people know everybody’s exploration licence area, they virtually know all the miners individually, you can approach them whenever you need to seeking advice that they freely give.

You are waiting on some assay results at the moment to come back from the lab. Where did that drilling take place and what news do you hope, or expect, to recieve?

We drilled seven holes this year. That was all conducted on our Aries prospect, which is the main target at Motzfeldt.

What we are hoping is that enough information will come from that to enable us to put the first JORC complaint Inferred resource on the table.

That’s a big leap forward as that confirms the project’s viability. What it won’t do is close the project off. It won’t restrict it as we still have plenty of drilling to be done along strike.

So Aries is the main prospect. You have identified another two in Voskop and Drysdale, what’s happening with them?

We are hoping, in 2012, to go back to both those targets to get a drill rig in there and drill a few scout holes.

What would you hope to be able to tell us at Greenland Day next year?

By Greenland Day next year we would like to be in the situation of being able to have our first resource on the table and have done some basic metallurgy that suggests we can recover a product.

That would allow us to also look at what the economic driver metal is. That might sound strange, not yet knowing what the economic driver metal is, but our preliminary view, at this stage, is that the tantalum, niobium and the rare earths will all contribute around 30 per cent to 40 per cent each, so there won’t be a dominant mineral.

That potentially means we may be able to have an economic project of tantalum or niobium on its own, because they occur together, or the rare earths on their own.

We’d like to prove that basic economics and get a rough scoping concept around the project, follow it up and then potentially, at the next Greenland Day be talking about Voskop and Drysdale  in the same manner that we are now talking about Aries.

THE DRILL SERGEANT: Kula Gold has struck further intersections of gold mineralisation under thin limestone cover adjacent to the 685,000 ounce Kulumadau Resource at the company’s 100 per cent-owned Woodlark Island gold project in Papua New Guinea.

 

Woodlark Island Gold Project, PNG. Source: Company announcement

 

Highlights from recently received assay results include:

–    9 metres at 40 grams per tonne gold from 134 metres, including 1 metre at 284 grams per tonne gold.
 
–    10m at 3g/t gold from 85m.

–    16m at 2.6g/t gold from 28m; and

–    10m at 3g/t gold from 139m.

Kula Gold said step out drilling recently completed between the existing Kulumadau Resource, which is now known as Kulumadau West, and the recently announced Kulumadau East mineralisation has confirmed an additional two new mineralised zones of significance.

The company said the latest mineralisation is reasonably shallow, which could result in all of the Kulumadau zones of mineralisation being included in a single openpit.

“These recent assays and the discovery of additional zones of mineralisation at Kulumadau confirm our belief that Kulumadau represents a significant mineralised system with the potential to add further shallow resources,” Kula Gold managing director Lee Spencer said in the company’s announcement to the Australian Securities Exchange.

“While continuing to add additional resources, Kula Gold is focused on delivering a Feasibility Study and advancing the project into the permitting stage in 2012.”

Gold prices are weaker, but ETF and bullion demand continues to grow – go figure?

The contradictions of markets (particularly resource markets), never cease to amaze me.

The situation with gold at the present time is a perfect case in point.

The price of spot gold has dropped below US$1,700 per ounce on the back of renewed debt woes in the United States.

US investors have flocked to the perceived safety of cash, treasuries and bonds. Even the ailing US dollar has managed a rally.

Now, as we’ve discussed previously, there’s no logical, sane reason in the known universe to own the US currency.

It’s on a slippery slope (and has been for some time) and ‘rallies’ like we’ve seen recently in the currency underline the absurdity of some investors in financial markets.

The ailing currency is reflective of an ailing economy that’s going to take an age to remedy.

In this vein, an article that a colleague recently sent me made me chuckle.

According to Bloomberg, the US has demanded a “commitment of significant resources” from Europe to stem its debt crisis.

Now forgive me if this isn’t a classic case of the pot calling the kettle black.

My colleague also directed me to an interesting analogy on the US debt situation, which helps make the picture a little clearer for ordinary folk like myself.

To understand the US financial position, just remove eight zeros and pretend it’s a household budget:

Annual family income:                                              $21,700
Money the family spent:                                            $38,200
New debt on the credit card:                                   $16,500

Outstanding balance on the credit card:              $142,710

At the current rate of saving, which is negligible, it will take the US 370 years to pay off the current debt. And the Americans think Europe has a problem!

As I highlighted a few months back when there were joyous celebrations at the apparent resolution of the US debt impasse, it was only going to be a temporary measure.

The reality was the situation was likely to be repeated again in early 2012, given that the debt ‘solution’ really only bought the US time – not an end to the problem.

And here we are still in 2011 and the nightmare is already reoccurring.

The craziest thing of all is that it’s gold that’s been sold off amongst all of this madness.

This is partly explained by the fact that investors tend to sell their most profitable assets in order to raise cash in times of crisis.

Therefore, gold’s recent decline during another yet another ‘de-leveraging phase’ is normal.

The important thing about the recent price correction and that following the GFC in late 2008 is that gold has been sold because it is a profitable asset.

It’s been used to fund losses on declining assets elsewhere in investors’ portfolios, like equities.

This means gold has undergone a large degree of forced selling.

Historically, the gold price performs best once this phase of a financial crisis has passed.

In the medium-term, continued low real interest rates, sovereign debt concerns, and growing emerging market/official sector gold demand, mean gold prices will continue to rise.

In light of the recent price correction from US$1,920/oz I have previously commented that gold would likely form a base around US$1,600/oz (which is the metal’s long-term trend-line).

You can see this clearly on the longer-term gold price chart below.

What we’ve also discussed recently is that gold has been consolidating over recent weeks between US$1,700 and US$1,750/oz, with support at US$1,680/oz and resistance at $1,750/oz.

Given the ongoing scale of European, US and global credit uncertainty, the next step for gold in my view appears to be comfortably back above US$1,800/oz over the next few months and to record highs during 2012.

The evidence is based on the latest data from the World Gold Council (WGC), which says official net gold purchases are outstripping even the most optimistic of expectations, with a five-fold annual surge now expected by year’s end.

Accordingly, the WGC has revised upward its forecast official purchases for 2011 to 450 tonnes; equivalent to 10% of 2010 total global gold demand.

This compares with just 73 tonnes of purchases in 2010 and an average 387 tonnes of annual sales in the decade 2001-2010.

According to the WGC, purchases have been spearheaded by countries with budget-surpluses in emerging markets, particularly Latin America and Asia.

 

On top of all this, China is rapidly closing the gap on India to become the world’s largest gold market.

Latest WGC forecasts released last week show that Chinese demand has continued to grow rapidly during 2011, with estimated demand rising by 25 per cent to 750 tonnes this year, equivalent to 17 per cent of total global demand in 2010.

 

Gavin Wendt is the founder of MineLife, publisher of the MineLife Weekly Resource Report