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Australia - A Selection of Mining Stocks

Technical Analyst & Author

September 8, 2003

Introduction

While the great gold bull market has been slowly gathering pace, and silver has been completing its base ready for its bull market, many mining stocks, especially in the Canadian and US markets, have been putting in a fine performance. Not so the Australian mining stocks, which have been blighted by currency considerations resulting from the strong Australian dollar. The result of this is that many Australian mining stocks are ridiculously cheap, a fact which has not escaped the notice of the smart money who, after quietly accumulating these stocks in a dignified manner earlier in the year, have been falling over themselves to pile into them over the past 6 weeks or so. They are clearly voting that the currency aspect has been taken account of already, and has been overdone, and are also voting that these underpriced stocks are going to go up substantially. I am happy to follow the footprints of the smart money, and, as I am not from Missouri, I don't always have to know the reasons why they are doing what they are doing.

What matters to me is the charts, and the charts are saying that Australian mining stocks are very undervalued, are being bought up aggressively by the smart money and are going to go up a lot. If you are a manager of an Australian mining company reading this, I'd like to tell you it's time to stop firing people and selling off equipment - the light at the end of the tunnel is growing.

There follows a selection of strong stocks, which have been brought to my attention by Australian and New Zealand readers. There are, presumably, many other strong stocks, which I don't yet know about.

The Stocks

Bolnisi Gold NI

Bolnisi has silver interests as well as gold. This is a very bullish chart, although the stock is short-term overbought, having risen from about $0.20 to over $0.30 over the past five weeks. There were very positive volume indications on this advance. Rose to a 9-year plus high over the past week or two, and, with no overhead resistance this is considered to have great upside potential in the gold and silver bull market. A buy on any reaction. The spike on the long-term chart in 1994 is a chart aberration.

BSG (Sydney ASX) AU:BSG in Bigcharts, closed $0.315 on Friday, 5^th September 2003

Giants Reef Mining

Marvellous chart. Very powerful breakout in July and August from long low base to kick off a major bullmarket. Considered a strong buy on the current reaction, and a very good investment for the medium and long-term. Very large upside potential.

GTM (Sydney ASX) AU:GTM in Bigcharts, closed $0.08 on Friday, 5^th September 2003

Macmin Silver

An Australian silver play. Macmin is lifting out of a long, low base, the lows of 1999 and 2001 comprising a large double-bottom formation. Now looking strong with positive volume indications. Expected to really get moving once it clears $0.15. With a big rise in the price of silver expected, this should prove to be a very worthwhile investment.

MMN (Sydney ASX) AU:MMN in Bigcharts, closed $0.12 on Friday, 5^th September 2003

Pan Australian Res

Superb chart. Very powerful breakout in July and into August. Nice entry point now with it having reacted back from approx. $0.13 to about $0.09. Huge upside potential.

PNA (Sydney ASX) AU:PNA in Bigcharts, closed $0.095 on Friday, 5^th September 2003

St Barbara Mines

Another great chart. Turned the corner in July and August with a high-volume breakout above the 200-day moving average. Is now consolidating the breakout and allowing the 50-day moving average to catch up. Given the bullish look of many Australian mining stocks, I don't think this will hang around too long before it advances anew. Good entry point now. Huge upside potential with very favourable risk-reward ratio.

SBM (Sydney ASX) AU:SBM in Bigcharts, closed $0.083 on Friday, 5^th September 2003

Yamarni Goldfields

Strong chart. A very powerful breakout in July has turned the 200-day moving average up. Although a very low-priced stock it is clear from the volume figures that there is a large amount of stock in issue - it would be worth knowing to what extent the quantity of stock in issue has grown over the past four years.

YAM (Sydney ASX) AU:YAM in Bigcharts, closed $0.014 on Friday, 5^th September 2003

Clive Maund

Clive P. Maund’s interest in markets started when, as an aimless youth searching for direction in his mid-20’s, he inherited some money. Unfortunately it was not enough to live a utopian lifestyle as a playboy or retire very young. Therefore on the advice of his brother, he bought a load of British Petroleum stock, which promptly went up 20% in the space of a few weeks. Clive sold them at the top…which really fired his imagination. The prospect of being able to buy securities and sell them later at a higher price, and make money for doing little or no work was most attractive – and so the quest began, especially as he had been further stoked up by watching from the sidelines with a mixture of fascination and envy as fortunes were made in the roaring gold and silver bull market of the late 70’s.

Clive furthered his education in Technical Analysis or charting by ordering various good books from the US and by applying what he learned at work on an everyday basis. He also obtained the UK Society of Technical Analysts’ Diploma.

The years following 2005 saw the boom phase of the Gold and Silver bull market, until they peaked in late 2011. While there is ongoing debate about whether that was the final high, it is not believed to be because of the continuing global debasement of fiat currency. The bear market since 2011 is viewed as being very similar to the 2-year reaction in the mid-70’s, which was preceded by a powerful advance and was followed by a gigantic parabolic price ramp. Moreover, Precious Metals should come back into their own when the various asset bubbles elsewhere burst, which looks set to happen anytime soon.

Visit Clive at his website: CliveMaund.com