As required by the rules of the Johannesburg bourse, mid-tier diversified miner Metorex has alerted investors to an emphasis of matter in its just-published 2008 annual report. It will come as little, if any, surprise that auditors Deloitte & Touché have emphasised the issue of a going concern in and around Metorex, which recently completed capital raising of ZAR 922m, comprising ZAR 744m by way of a heavily dilutive fresh shares issue, and ZAR 178m by way of bank debt.At Metorex, with core copper and cobalt operations at Chibuluma in Zambia, Ruashi in the Democratic Republic of the Congo, and with fluorspar at Vergenoeg in South Africa, the capital raising has simply not been enough. The company's directors have indicated that capital expenditure is set to run to around ZAR 1.4bn during 2009, with about ZAR 1bn of that being absorbed during the first half of the year. (One rand is currently worth just more than 10 US cents).Beyond the damage that sharply lower commodity prices have occasioned, Metorex ran badly behind schedule building its Ruashi operation in the DRC. It is now anticipated that Ruashi II will be at full production by the end of the year. This means that for the meantime, Metorex is more of a play on copper, and to some extent cobalt, than anything else.Copper may have turned; the price collapsed from a record USD 4.08/lb in mid-2008 to USD 1.28/lb in December and has since traded as high as USD 1.80/lb. Cobalt, which trades in an opaque market, may also be recovering after sharp cutbacks by a number of miners. BHP Billiton has stopped publishing cobalt prices on a website it deployed to promote greater transparency in cobalt pricing.The directors state in the latest Metorex annual report that the group has continued with its largest capital project Ruashi II and has incurred capital development costs at its Kinsenda Mine development (CRC). These projects have placed Metorex in a severe liquidity situation which has resulted in the board of directors approving both the equity placement and fresh bank debt to ensure the successful finalisation and commissioning of the Ruashi project.A bullish point for Metorex is that it has completed the DRC's mining review process. Metorex needs good luck on a number of commodity prices, and, barring miracles, further funding. Metorex recently put it this way: A programme to dispose of non-core assets, to raise project-specific funds to develop the group's high-grade DRC copper assets and reduce debt at project level and to progress corporate transactions with entities with synergistic cash-flow, growth and commodity/geographic portfolios has commenced and is making encouraging progress.Non core assets may include the 55% Metorex holds in listed Pan African, an African gold outfit; the company's current market value is around USD 60m. Then there is Consolidated Murchison, an antimony and gold miner in South Africa, which has run into losses and been placed on care-and-maintenance.Sentiment toward copper miners has been improving since the metal price touched (apparent) lows in December. Earlier this year, Freeport-McMoRan, the world's biggest publicly traded copper name, completed the raising of USD 750m in fresh equity, without a significant dilution, given its current market value of USD 17.3bn. A number of other copper names have recently also raised fresh equity, not least Quadra and First Quantum, which, significantly, ranks as an African copper and gold miner, with operations, like Metorex, in Zambia and the DRC.First Quantum ranks as one of the world's top performing copper stocks. First Quantum also holds 20% of Equinox, now commissioning one of Africa's biggest copper mines, in Zambia. Equinox recently announced an effective cut of USD 45m in its 2009 debt repayments, from USD 183m to USD 138m. On the liabilities side, Equinox has project and fleet debt facilities outstanding of USD 640m.There have been mixed fortunes on the Zambian and DRC copperbelts; two names that remain in a rut are to be found in the form of Camec and Katanga Mining. Listed stock prices for Metorex, Camec and Katanga Mining have each fallen by more than 90% from peak levels seen during 2008.Selected copper stocks

Stock

From

From

Value

price

high*

low*

USD bn

Freeport-McMoRan

USD 42.12

-66.9%

168.3%

17.339

Southern Copper

USD 18.61

-55.6%

104.1%

15.890

Antofagasta

GBP 5.00

-40.1%

105.1%

6.959

KGHM Polska Miedź

PLN 43.80

-61.4%

118.1%

2.448

Jiangxi Copper

CNY 23.44

-35.7%

183.4%

5.607

Yunnan Copper

CNY 21.65

-39.8%

217.9%

3.980

Tongling

CNY 13.45

-25.2%

146.3%

2.546

First Quantum

CAD 37.00

-61.2%

190.2%

2.034

Equinox

CAD 2.08

-59.6%

173.7%

0.993

Philex

PHP 5.80

-25.6%

50.6%

0.464

Camec

GBP 0.051

-91.8%

168.4%

0.202

Katanga Mining

CAD 0.38

-97.6%

70.5%

0.062

Quadra

CAD 6.04

-77.6%

206.6%

0.319

Pan Australian

AUD 0.30

-76.0%

265.9%

0.359

Metorex

ZAR 1.70

-93.1%

47.8%

0.130

Palamin

ZAR 49.00

-69.8%

22.5%

0.244

Mercator

CAD 0.60

-95.4%

106.9%

0.052

Anvil

CAD 1.19

-91.9%

164.4%

0.068

Northern Dynasty

CAD 8.60

-18.9%

347.9%

0.636

Taseko

CAD 1.55

-73.5%

134.8%

0.190

Aditya Birla

AUD 0.14

-95.3%

45.8%

0.030

Corriente

CAD 6.24

-4.3%

149.6%

0.376

Fronteer

CAD 3.13

-47.3%

101.9%

0.284

CuDeco

AUD 1.95

-58.4%

108.6%

0.156

Chariot

CAD 0.25

-77.5%

308.3%

0.064

Straits Resources

AUD 1.26

-84.5%

102.4%

0.199

Centenario

CAD 1.63

-73.9%

262.2%

0.067

Globestar Mining

CAD 0.61

-71.4%

110.3%

0.051

Frontera

CAD 0.74

-87.1%

236.4%

0.048

Amerigo

CAD 0.31

-87.0%

34.8%

0.033

Stingray Copper

CAD 0.26

-68.3%

100.0%

0.010

Tiger Resources

AUD 0.09

-83.3%

31.4%

0.016

Candente

CAD 0.37

-81.3%

184.6%

0.024

African Copper

GBP 0.02

-96.2%

167.9%

0.004

Monterrico

GBP 0.77

-70.2%

218.8%

0.028

Inca Pacific

CAD 0.32

-85.5%

166.7%

0.014

Exco Resources

AUD 0.10

-77.2%

54.0%

0.017

Coro

CAD 0.15

-92.8%

114.3%

0.010

Discovery Metals

AUD 0.21

-67.7%

100.0%

0.023

Africo

CAD 0.70

-74.1%

75.0%

0.041

Prairie Downs

AUD 0.09

-92.3%

102.4%

0.004

Red Dragon

CAD 0.13

-69.0%

160.0%

0.007

Polymet Mining

CAD 0.98

-78.2%

63.3%

0.108

African Eagle

GBP 0.03

-66.7%

155.6%

0.009

El Nino Ventures

CAD 0.08

-81.4%

128.6%

0.003

Simberi

CAD 0.01

-90.9%

0.0%

0.001

Augusta Resources

USD 1.35

-80.6%

246.2%

0.120

Rambler Metals

GBP 0.12

-78.6%

88.0%

0.010

Norsemont Mining

CAD 1.64

-62.8%

53.3%

0.071

Nevada Copper

CAD 0.31

-89.0%

87.9%

0.010

Capstone Mining

CAD 1.65

-63.1%

153.8%

0.217

Imperial Metals

CAD 3.40

-67.6%

265.6%

0.087

Pacific Booker

CAD 6.30

-36.2%

146.1%

0.051

Nevada Copper

CAD 0.31

-89.0%

87.9%

0.010

Avanco Resources

AUD 0.04

-87.4%

0.0%

0.002

Palabora

ZAR 49.00

-69.8%

22.5%

0.244

Kagara

AUD 0.42

-92.9%

40.7%

0.072

Stingray Copper

CAD 0.26

-68.3%

100.0%

0.010

Benguet

PHP 6.20

-69.8%

27.8%

0.012

Con't Mines

CAD 0.60

-57.1%

100.0%

0.062

Redbank Mines

AUD 0.01

-88.5%

0.0%

0.004

IMA Exploration

USD 0.22

-53.2%

37.5%

0.011

Cornerstone Capital

CAD 0.06

-85.9%

83.3%

0.003

Thundermin

CAD 0.10

-79.6%

66.7%

0.006

Western Copper

CAD 0.42

-73.8%

104.9%

0.024

Averages/total

-46.3%

67.5%

63.174

Weighted averages

-60.0%

137.7%

 

Diversifieds with copper

Stock

From

From

Value

price

high*

low*

USD bn

BHP Billiton

GBP 13.32

-39.6%

82.1%

115.596

Vale

USD 14.08

-68.1%

60.0%

68.992

Rio Tinto

GBP 23.89

-66.7%

140.1%

48.703

Anglo American

GBP 11.22

-69.5%

23.8%

21.272

Xstrata

GBP 4.41

-82.4%

52.7%

18.261

Norilsk

USD 5.99

-81.1%

70.7%

11.419

Teck

USD 6.32

-88.2%

143.1%

3.018

Vedanta

GBP 6.55

-76.5%

82.4%

2.578

Sterlite

USD 7.14

-69.0%

128.8%

5.058

Lundin

CAD 1.95

-78.7%

182.6%

0.760

Kazakhmys

GBP 3.57

-81.9%

109.0%

2.696

Ivanhoe

CAD 7.31

-42.0%

254.9%

2.210

Inmet

CAD 33.92

-65.9%

179.2%

1.309

Northgate

CAD 1.73

-50.4%

158.2%

0.354

Oz Minerals

AUD 0.56

-85.2%

38.8%

1.174

Polymet

CAD 0.98

-78.2%

63.3%

0.108

Mwana Africa

GBP 0.04

-93.1%

60.0%

0.022

EMED Mining

GBP 0.05

-84.6%

44.4%

0.016

Boliden

CAD 6.70

-48.5%

235.0%

1.465

Averages/total

 

-71.0%

111.0%

305.011

Weighted averages

-65.3%

77.6%

* 12-month

 

Source: market data; table compiled by Barry Sergeant