Xstrata Dismisses Resource Pacific Target

123jump.com Staff
08 Jan, 2008
New York City

Australian stocks declined for the second day in a row on the weak international metals prices. Xstrata dismissed Resource Pacific Holdings Ltd 8 million metric tons a year coal production target and sad it lacked technical credibility. The Australian dollar closed stronger today, buoyed by stronger than expected building approval data. GrainCorp rose 7.5% on recent rains in the region. Centro Retail Group fell 11%.

[R]4:00AM New York, 6:00PM Sydney- ASX 200 index declined 0.5% after a fall in commodity prices.[/R]

ASX 200 index lost 0.5% or 33.5 to close at 6,128.10.

The Preliminary market turnover was 1.8 billion worth $4.8 billion, with 509 stocks moving up, 755 moving down, and 347 unchanged.

The most actively traded stock was Gondwana Resources with 229 million shares worth $12.7 million.


Novogen Ltd stock rose 3.7% today after its U.S. unit won approval from the U.S. Food and Drug Administration to proceed with the second round of patient studies on its treatment for burn wounds.

Novogen announced today that its 81 per cent owned US subsidiary company Glycotex, Inc., obtained an active Investigational New Drug Application from the Food and Drug Administration for the start of a phase IIa clinical trial of its lead product candidate GLYC-101, administered topically for the treatment of burn wounds.

The phase IIa human clinical trial to be conducted in the US is randomized double-blind, placebo controlled clinical trial designed to investigate the safety and clinical outcomes of topically applied GLYC-101 compared to placebo in subjects undergoing carbon dioxide laser skin resurfacing.

GLYC-101 has already completed a phase II human clinical trial in Australia for the treatment of chronic venous skin ulcers. Glycotex Inc intends to develop GLYC-101 for a wide range of human wound healing and tissue repair applications including burn wounds, post surgical wounds, diabetic ulcers and chronic venous ulcers.


Xstrata Plc today announced that the 8 million metric tons a year coal production target set by Resource Pacific Holdings Ltd, its target, last week was unattainable and were overly optimistic and lacked technical credibility.

Xstrata cited Resource Pacific''s failure to meet three deadlines for resuming mining at Newpac in New South Wales State.

Resource Pacific last week turned down Xstrata''s $960 million ($846 million) bid for Newpac mine. The same mine is where Resource plans to triple coking coal output.

Xstrata''s offer at $2.85 a share is at 85% premium to last 30-day average price. Resource Pacific last week said the offer was unreasonable and valued its share between $3.56 and $4.09. The coking coal is used in steelmaking. Resource Pacific rose 0.4%.

GrainCorp Ltd''s share rose by 7.5% on the back of expectation of an improvement in crop production following recent rains.

GrainCorp last month indicated that this year''s sorghum crop might be the best in more than five years. GrainCorp controls nearly 50% domestic market in sorghum, used for feeding livestock.

Rival grain companies, AWB Ltd rose 2.7% and ABB Grain Ltd added 2.4%. Australian farmers produced a record harvest of 26.1 million metric tons in fiscal 2004, making the nation the world''s second-largest shipper of the grain.

The Australian dollar closed higher today, buoyed by stronger than expected building approval data.

The Australian dollar traded at $0.8763/70, up from yesterday''s close of $0.8730/35.

Of the ASX 200 index shares, Duet Group led the gainers with a rise of 4.4% followed by increases in Babcock & Brown of 4.3%, in Futuris Corporation limited of 3.8%, in Coca Cola Amatil of 3.3%, and in Queensland Gas of 2.9%.

Of the ASX 200 index stocks Centro Retail Group led the decliners with a fall of 11.2% followed by losses in Sundance Resource of 9.9%, in Perilya Limited of 8%, in Sally Malay Mini of 6.5% and in Emeco Holdings of 4.8%.