The Speculator

PORTFOLIO POINT: Viralytics expands its cancer cure targets to attack bladder cancer.

Viralytics to attack bladder cancer

Until now our cancer-cure hopeful Viralytics (VLA) has concentrated its efforts on increasingly successful advanced trials on destroying malignant skin cancers, or melanomas.

This week, however, Viralytics announced a new international collaboration to attack bladder cancer in conjunction with Professor Hardev Pandha’s research team at the University of Surrey, England.

Prof. Pandha, head of oncology at the University of Surrey, is an internationally recognised researcher and opinion-leader in the field of virotherapy, having published extensively regarding the pre-clinical and clinical activity of oncolytic viruses. He has undertaken numerous Phase 1 and Phase11 clinical evaluations of various oncolytic viruses.

The collaboration will initially focus on the laboratory-based use of Viralytics’ trademark-protected CATAVAK, derived from the naturally-occuring coxsakievirus and initially developed by Viralytics chief science officer, Prof. Darren Shaffren, of the University of Newcastle, NSW. (The University retains a 4% equity in Viralytics.)

Pointing to the potential of this initial trial, Viralytics’ managing-director, Bryan Dulhunty, said in the United States alone, it’s estimated that in 2012 there will be approximately 70,000 new cases and 15,000 deaths from bladder cancer.

As pointed out in this column last week, Viralytics aims to progress beyond treating melanomas to a wider range of advanced applications, such as colorectal, prostate, head and neck cancers.

Despite this week’s announced extension of its trials, Viralytic shares remained unchanged this week, maintaining the company’s market capitalisation at around $25 million (equivalent to 8.5c a share) – sufficient to carry through its programs until at least the end of the year.

Image Resources expansion plans still awaited

Last week’s column reported Image Resources (IMA) had sought a trading halt on July 9 pending the announcement of a planned share placement expected on the morning of July 11.

As readers will now realise, the announcement was still to come at the time of writing today but Image director George Sakalidis arrived in Sydney from Perth this morning to possibly tie up any loose ends about the fund raiser.

I’m still expecting positive news to advance the company to producer status following its June 19 update of the feasibility study on its extensive tenements on the North Perth Basin. That update reported “an increasing degree of confidence” in a high value minerals inventory to support a 3.3 million tonnes /year multi-pit operation over more than 12 years mine life, with further significant exploration potential.

The company, of course, has not recruited its high-profile managing-director, Peter Davies, for a non-productive project. As previously pointed out, Davies has extensive operational experience in the mineral sands extractive industry, having been general manager of TiWest’s mineral sands processing and synthetic rutile production. He was also previously director of European operations for Kerr-McGee Chemicals/Tronex for titanium deioxide pigment manufacturing.

Davies was initially engaged in February as project manager to complete a feasibility study following a promising scoping study. On May 25 he was elevated to managing-director of Image, succeeding the founding managing-director and geophysicist George Sakalidis, who remains executive director exploration.

Image shares closed ahead of the self-sought trading halt at 30c – less than half their high a year ago of 63.5c. At the lower price the company carries a market capitalisation of just $30 million.

Austpac says it’s still on target with its Newcastle plant

We added technology developer Austpac Resources (APG) to our portfolio at 6c in March 2011 and like so many stocks this year they’ve wilted to reach a new year’s low of 2.8c last week.

At that price the stock carries a market capitalisation of barely $30 million. Yet its major shareholders include BHP-Billiton (5%) and the New York Stock Exchange-listed multinational Kronos International Inc. (7.5%). Kronos put up $12.5 million last year to become a shareholder and fund the building and initial operations of the plant.

Those companies became involved with Austpac and its patented technology to recycle waste products from the production of steel and other metals such as titanium and with other likely customers will pay for access to the technology.

This week, Austpac’s managing-director Mike Turbott produced an update on the building of its Newcastle Iron Recovery Plant on Kooragang Island. The plant, when it’s operational probably early next year, will recycle mill scale and spent pickle liquor from steel mills to produce iron ore chips or briquettes and strong hydrochloric acid.

All is going to plan, according to Turbott and, as he pointed out in the company’s last quarterly report, Auspac and Kronos were in discussions regarding project completion and financing terms.

He promises a fuller update with Austpac’s June quarterly report due at the end of this month. With such substantial shareholders this has got to be regarded as a potential recovery stock, particularly since the latest update reveals some significant expansion in the scale and size of the plant’s capacity.

-The Speculator portfolio, as at July 18
Company	Code	No of shares	Bought	Purchase price	Current price	Current value
Image Resources	IMA*	15,000	31/12/2010*	0.362 av	$0.300	$4,500
Viralytics	VLA	19,995	20/12/2011	$0.308	$0.285	$5,699
Robust Resources	ROL	6,000	31/12/2010*	$1.49 av	$0.760	$4,560
Scotgold Resources	SGZ	27,500	31/12/2010*	5.5 av	$0.060	$1,650
GoConnect Ltd	GCN	250,000	31/12/2010*	0.034 av	$0.017	$4,250
Minemakers	MAK	20,000	25/01/2011*	0.425 av	$0.145	$2,900
Platsearch	PTS	20,000	8/02/2011*	$0.130	$0.071	$1,420
Broken Hill Prospecting	BPL	30,000	22/02/2011*	$0.132	$0.092	$2,760
Austpac Resources	APG	40,000	2/03/2011*	$0.060	$0.031	$1,240
Potash West	PWN	11,050	30/03/2011*	$0.200	$0.220	$2,431
Cortona Resources	CRC	25,000	13/04/2011*	0.146 av	$0.093	$2,325
Golden Gate Petroleum	GGP	408,500	20/04/2011*	0.0145 av	$0.011	$4,494
TNT Mines	TNT	4,440	22/07/2011*	$0.000	$0.250	$1,110
Quickstep Holdings	QHL	20,000	23/11/2011*	$0.185	$0.175	$3,500
Orpheus Energy	OEG	19,250	17/08/2011*	0.164 av	$0.095	$1,829
Black Mountain Resources	BMZ	10,000	17/04/2012	$0.300	$0.250	$2,500
Gullewa	GUL	40,000	22/05/2012	$0.063	0.081	$3,240
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Total value of portfolio						$50,407
Cash at bank						-$7,530
Total						$42,877
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Portfolio change since January 3, 2012 (started with $50,000)						-14.25%
All Ordinaries change since January 3, 2012 (then 4155.22)						0.48%
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*Shares held from previous year, carried at their December 30, 2011 closing price.

David Haselhurst writes a monthly column for Money magazine. Please note that he is not able to provide personal replies to emails.