Fiji opening lifts Newcrest hopes
NEWCREST stands to be the big winner among Australian companies should the lifting of emergency powers by Fiji's military dictator, Frank Bainimarama, prove to be the first step to the restoration of full-blown democracy in the Pacific nation.
NEWCREST stands to be the big winner among Australian companies should the lifting of emergency powers by Fiji's military dictator, Frank Bainimarama, prove to be the first step to the restoration of full-blown democracy in the Pacific nation.The Melbourne company is the manager and 69.94 per cent owner of the Namosi joint venture, 30 kilometres west of the capital, Suva. Namosi is home to the Waisoi deposit and other copper/gold targets that are being evaluated.The Waisoi deposit ranks as one of the world's biggest undeveloped copper/gold deposits, with Newcrest last estimating a total resource of 7.9 million tonnes of copper and 7.7 million ounces of gold. Had it not been for Fiji's political turmoil, stronger copper and gold prices would by now have made the deposit a real development candidate.Hopes that development may proceed have risen since a new year address by Commodore Bainimarama in which he said that emergency powers would be rescinded and a new constitution was in the works.Commodore Bainimarama seized power in a 2006 coup, the fourth since 1987. The fallout from the 2006 coup did not scare Newcrest away from pursuing Namosi's big-time potential: its entry into the joint venture with Japanese partners occurred in July 2007.When Newcrest picked up the running at Namosi, the Waisoi deposit was about half the size of the present resource estimate. Recent work has been focused on finding higher-grade ore positions that could sweeten the economics of what would be a multibillion-dollar development.In its September-quarter report, Newcrest said drilling in an area six kilometres from Waisoi had confirmed higher-grade mineralisation over a distance of 200 metres and 500 metres in vertical extent.Newcrest would not comment yesterday on the latest political shift in Fiji. It has said previously it plans to complete a feasibility study into development options at Namosi by June.Despite the world-class size of the known resource, analysts at present give little, if any, value to the asset in their valuations of Newcrest.Newcrest shares climbed $1.10 yesterday to $30.70. The strong gain was in line with other gold stocks, which were buoyed by the gold price rise.