News

January 12, 2009

Angus & Ross May Be In The Ninety Percent Club, But It’s Suddenly Attracting The Attention Of The Bulls

By Alastair Ford

Why did Angus & Ross shares jump by nearly 300 per cent last week, when all the company did was announce an off-take agreement on the future production of lead and zinc concentrates from its flagship Black Angel mine in Greenland? As you might expect, the agreement, with Swiss-based commodities trader MRI Trading, links the price of the concentrates in question to the LME price, with various provisos allowing for treatment charges. Well and good. But at the current prices for lead and zinc such an agreement, though it may well be valid for the life of the mine, looks all but academic. Nicholas Hall, Angus & Ross’s chief executive, fairly concedes that Black Angel needs a sustained zinc price of US$1,500 a tonne if it’s ever to get off the ground. At the current US$1,200 per tonne price Black Angel looks dead in the water.

But it turns out - to the surprise of some - that the market doesn’t quite see it in those terms. For one thing Angus & Ross is a fully paid up member of what’s become known as the 90 per cent club – those companies that have seen 90 per cent or more of their market values wiped out since the height of the recent boom. This club has a dispiritingly large number of members, the majority of whom are perfectly decent and respectable miners. Angus & Ross surely falls into this category. It may have...