Australian Stocks Gain 1.2%; Newcrest Lifts Gold, Copper Estimate at PNG Mine

Marcus Jacob
04 Mar, 2011
New York City

Australian stocks closed higher following the increase in New York and London trading. Fletcher Building extended its offer for Crane by two weeks. Newcrest soared 5% after it doubled the estimate of copper and gold at its mine in Papua New Guinea.

[R]5:00 PM Sydney – Australian stocks closed higher following the increase in New York and London trading. Fletcher Building extended its offer for Crane by two weeks. Newcrest soared 5% after it doubled the estimate of copper and gold at its mine in Papua New Guinea.[/R]

The benchmark index in Australia closed higher tracking the gains in overnight trading in New York. Investors in New York and in Europe set aside worries in the Middle East and crude oil eased.

The ASX 200 index added 57.90 or 1.2% to 4,864.30 and broader All Ordinaries index added 55.80 to 4,958.60.

The Australian dollar increased to US$1.013 and crude oil declined 35 cents to US$101.90.

Fletcher Building extended for two weeks to March 25 its offer to acquire plumbing building supplies company Crane. Fletcher also said it controls now 43% of Crane and acceptance from 50% of Crane shareholders for the merger.

Ivanhoe Mines said in a statement that Oyu Tolgoi mine is expected to yield 3 million ounces of silver in addition to 0.544 million tons of copper and 650,000 ounces of gold a year in its first ten years mining life.

The miner also said that total cost of copper mining in the Gobi desert area is higher but still profitable.

Cost to mine copper is estimated at 45 U.S. cents a pound based on the assumption that silver trades at US$13.50 an ounce and gold at US$850 an ounce. The mining cost drops to 12 U.S. cents a pound.

Ivanhoe controls 66% stake in the joint venture project with Mongolian government and Rio Tinto holds 48.4% stake in Ivanhoe.

Stock Movers

Resource stocks closed higher after commodities gained. BHP Billiton increased 70 cents to $47.25 and Rio Tinto added $1.32 to $85.52.

Newcrest soared 5% or $1.79 to $40.02 after the gold miner doubled its exploration target in Papua New Guinea. The company revised the gold estimate to 30 million ounces from 16 million ounces and copper estimate of 8 million tons from 4.9 million tons.

Ramelius Resources increased 4 cents to $1.24 after the gold miner reported higher grade gold assay results at one of its mines in Western Australia.

Energy stocks closed lower as crude oil eased. Woodside Petroleum declined 33 cents to $42.85, Santos decreased 3 cents to $14.46 and Oil Search declined 4 cents to $6.86.

Banks closed higher. National Australian Bank increased 23 cents to $25.52, Commonwealth Bank increased 54 cents to $52.65 and Westpac added 37 cents to $23.48.