The venue and weather were perfect and numbers were up on 2001, however it was evident that there is significant growth potential in terms of attendance.

• Despite the movements to date in the POG, only one company provided a rough forecast of $400oz by December 2003.
• At the conclusion of the conference it was apparent that activity surrounding nickel sulphide developments is set to increase at a frantic pace in order to cash in on the anticipated weakness, which was forecast by some to extend into 2006-2007.
• The major focus was for juniors to acquire operations held by majors and other parties where infrastructure was already in place (operations on care and maintenance). These were to be funded mainly by share issues and a smaller cash component.
• Those with existing nickel operations concentrated on increasing their respective resource bases and the likely impacts of a rising nickel price to their bottom line.
• The IPO market remains depressed in line with general market sentiment. The majority of those seeking an ASX listing are being forced to extend or shelve their issues due to a severe lack of investor interest. Those able to raise the minimum level required have possessed an edge over their competition in terms of resources, management and track record.
• The focus on zinc, copper and other commodities was limited to a handful of presentations. Those that were primarily focussed on zinc had somewhat of a "contrarian" feel about them. Despite the strength in Platinum there was very little discussion on the PGM sector.
• The focus has switched from gold production towards exploration. A number of the gold producers are running on limited resource/reserve bases and are mounting considerable drilling efforts to replenish rapidly depleting resources. Some have planned considerable expenditure relative to their current market capitalisations. New share issues have been undertaken to fund some of these campaigns.
• The market is now "risk adverse" and any disappointments or uncertainty regarding future guidance is resulting in severe selling pressure regardless of the sector. The market has harshly treated those gold companies that have failed to meet expectations in terms of production and/or exploration.
• The Australian gold sector has been decimated through corporate activity (Abelle is now the subject of a takeover offer by Harmony and depletes the ranks even further).
• Despite the recent strength in the $A gold price there was limited discussion in relation to gold call option sales by the mid-cap producers. Hedging issues were based on protection of low-grade stockpiles and funding requirements.
• The companies with projects in Laos, Indonesia and the Philippines focussed on addressing "market perceptions" of the associated political risk issues. The companies that have been able to develop projects in countries with perceived political risk have successfully captured market attention and reasonable capitalisations thus far.
• One presenter produced articles and a newspaper listing of the Poseidon share price at $270, and stated, "Times have changed and were unlikely to see that type of movement again". For some it was difficult to put forward catalysts that could see a return of the speculative mining boom of 1986/1987.
• Apart from limited discussion on potential multi-million ounce deposits there was a notable shortage of rumours and tips doing the rounds.
• On Sunday 6th April 2003, there is an investor day in Perth (Australian Gold Week and Conference) being held at the Sheraton Hotel. (Free). Previous weekend seminars in Perth have been well attended regardless of gold/commodity prices and underlying sentiment.

With the POG fluctuating and unable to put together a steady flow of gains (or losses for that matter) the Australian gold stocks have held reasonably well. The mid-week announcement concerning a takeover of Abelle Ltd by Harmony at 75c per share could well have signalled a new bout of rationalisation in the industry, however with a number of companies running low on resources/reserves and treating low-grade ore barriers exist towards further activity in the near-short term.

The silver sector has received a boost from Barrick's announcement regarding their silver short positions and a resumption of drilling by Macmin at their Texas Silver Project in the near-term. The explorers in the New England Fold Belt are undergoing their own rationalisation to an extent with Director movements and stakes/alliances announced between the companies with tenements in the area.

With a number of key industrial stocks suffering from relentless selling pressure the confidence of retail investors has been battered and as a result many are reluctant to allocate new funds to the market regardless of the sectors prospects. At a time where new capital is urgently required to fund further exploration, economic and political events have had a severe impact and forced some to batten down the hatches somewhat when they should be at their most active.

Trading activity has recently centred on "catching falling knives" where those stocks that have been belted are being targeted in terms of speculation of a near-term bounce. The vast majority have continued their share price slides and a result confidence has been eroded further.

Whilst the POG increase over the last 12-18 months has resulted in significant re-ratings for the majors and a select group of mid-caps, the fact remains its impact has been limited and a major mineral discovery in Australia is sorely required.

From sitting through the 26 presentations at the conference, it is apparent that the majority are not going to simply "roll over and die wondering".

Tony Locantro
locantro@iinet.net.au

4 March 2003

Tony Locantro is a client advisor in Perth, Australia, and the author of "The Green Room", A Guide To Speculating on the Australian Stock Market. Tony was previously a major contributor to Australian Internet forums under the nick "Budfox" from 1998-2001. Stocks mentioned in this article are for illustration purposes only and do not represent investment advice. The author has both direct and indirect interests in stocks mentioned in the article and these may change without notice.