Eastern Europe the new field of dreams

THE mining boom means that competition for prospective ground is tighter than ever. Add in soaring labour costs and the increasing difficulty explorers experience in passing through native title and environmental clearance hoops, and it is a wonder that anyone explores here at all.

There is an alternative go overseas. That's just what an ever-increasing band of ASX-listed explorers have been doing in recent years. The Australian industry's presence across Africa, and to a lesser extent south-east Asia and Latin America, reflects just how tough the competition here has become.

The next exodus could well be to eastern Europe. Apart from there being much less competition there for prospective ground, an operator at a mine over there driving a truck or working in the treatment plant thinks himself lucky if he gets take-home pay of $500 a month.

Compare that to the Pilbara and the Queensland coal fields where a broom pusher can score a pay packet of $6000 a month. Good luck to them, too. Working as much as two weeks on before having a week off is a job description that can convince most people that there is more to life than money.

But back to eastern Europe where the race to live like the rest of us is on in earnest. And when it comes to opportunities waiting for some Aussie know-how in exploration and mining, the place is ripe for the picking.

A little Perth-based thing called Sultan Corporation (ASX: SSC) found that out during the week when it struck a deal to pick up an exploration project in south-west Poland, hard up gainst the world-class copper mining operations of the 30 per cent state-owned KGHM.

Sultan's Bogdan exploration project covers an area of 42 square kilometres. Despite its location near the KGHM operations and their current annual copper output of more than 500,000 tonnes, the Bogdan tenements have seen precious little exploration one hole in fact.

The previous owner was more interested in its coal potential. But the single hole that was drilled did punch through the coal seam to hit some promising KGHM-type mineralisation from about 300 metres depth.

It is early days but expect Sultan to be moving quickly to firstly twin that hole and then to punch in some more to confirm that Bogdan is worth pursuing.

What is known as this stage is that Bogdan has been picked up for a song compared to what would have been required had it been sitting in Australia.

Bogdan follows Sultan's earlier eastern Europe push with the acquisition of the Monty polymetallic deposit in Montenegro, again at a knockdown price and in a country where the corporate tax rate is all of 9 per cent. Expect more moves by the company into eastern Europe.

Sultan last traded at the princely price of 1.9? a share. It has 1.73 billion shares on issue, so its market cap is not as small as you might think at $33 million.

THE tongues were wagging on Friday about what might be going on at Tiger Resources (ASX: TGS), the Perth-based group that recently became a copper producer from its high-grade Kipoi project in the Democratic Republic of Congo (DRC).

Unlike the rest of the copper stocks, which have been retreating in response to the red metal's fall to less than $US4 a pound, Tiger put on 3.5? or 7.7 per cent to close off Friday at 48.5? a share, giving it a market capitalisation of $325 million.

What's more, volume in the stock was unusually strong at more than 13 million shares. No need for a "please explain" from the ASX just yet, but you can bet the stock is going to be closely watched in the days ahead.

Now Tiger did earn a new stripe recently by being added to the S&P/ASX 300 index, making it a stock that the index-hugging fund managers out there can now buy. But the bet is that there is more to the sudden interest.

Tiger last updated the market on Kipoi's performance in August when it said that in the month of July the operation did pretty much as was expected, renewing confidence that there would be a super quick payback of its $US33 million capital cost.

That's all well and good, but again does not explain the sudden burst of interest in the stock. A more likely explanation is the expectation that Tiger's major shareholder, the commodities trader Trafigura with 28 per cent (fully diluted), could look to exit its position, putting Tiger into takeover mode.

Trafigura has already done much the same at ASX-listed Anvil Mining (ASX: AVM), the long-time DRC copper producer/developer that has a market capitalisation of $1 billion. While Trafigura has not said anything on its Tiger stake, it has told Anvil that it no longer considers its 39 per cent stake (fully diluted) in the company to be a core asset, which sort of means it is for sale at the right price. The potential to put Anvil/Tiger together is clearly on. Such a combination would create a powerhouse in the DRC copper belt, if that's your fancy. If not, it is bound to attract the interest of any number of Chinese groups and the more adventurous of the Western world miners looking for some immediate growth ahead of copper, which according to just about any analyst you speak to is going into supply shortage for the next five years or so.

IT WAS a pity that the shakedown in copper equities in response to the metal's price retreat came when it did for David Sargeant's Empire Resources (ASX: ERL).

Its release of some impressive hits from its A Zone prospect near its flagship Just Desserts deposit some 80 kilometres south-west of Sandstone in Western Australia were ignored by the market. Its shares remained in a holding pattern around 9.1? a share for a market cap of about $12 million.

That is despite the four metres grading 4.68 per cent copper and 0.5 grams a tonne gold from A Zone, confirming the company is on to a region with the potential to host a number of decent-sized volcanogenic massive sulphide ore deposits, decent sized for a company of its size at any rate.

As it is, A Zone and Just Desserts (1.07 million tonnes grading 1.82 per cent copper and 0.78 g/tonne gold) VMS form part of the group's Yuinmery project, which sits in the middle of the Golden Grove and Jaguar VMS operations owned by others. More assay results are on the way for A Zone.