News

May 05, 2009

It’s Only A Matter Of Time Before Cashed Up Eleckra Mines Returns To The Spotlight

By Our Man in Oz

Hunting for anomalies is what geologists do for a living - looking for that little something different which might lead to a mineralised structure. Oddly enough, it’s also what investors ought to be doing, because it’s the undetected anomaly which can sometimes lead to a substantial windfall. Because most markets have been horrible for the past year the game of anomaly hunting, for geologists and investors, has been a pretty barren affair, which is why most of us tend to look the other way when something unusual pops up, like, for example, the current valuation of a small Australian explorer called Eleckra Mines. On the market, Eleckra is capitalised at a very lazy A$2 million which, in the boom, was considered a round of drinks in a West End, or Kalgoorlie, bar. The reason that number looks so odd is that the company can demonstrate ownership of minerals in the ground worth A$1.2 billion.

The value gap, or the anomaly, is so wide that a casual observer might be inclined to do exactly what was suggested in the opening paragraph, look the other way. How, it might be asked, could there be a such a wide value disparity at a time when metal markets are re-awakening, courtesy of the economic green shoots sprouting in China, the US, and elsewhere? The answer is that Eleckra remains trapped in a time warp, where most investors, although not the professionals, continue to look at small...