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Thursday, August 10, 2006

Back to Basics

By William Trent, CFA of Stock Market Beat

The durable goods data confirms strength in the primary metals. Inventories are rising, but not nearly as fast as shipments or orders. It is likely some additional inventory is needed so product can be delivered on time.

Watch List news:

Silgan Holdings Inc. (SLGN), a consumer goods packaging company, reported higher quarterly profit, helped by cost reduction efforts and strong domestic volumes in its closures business.

While Freeport McMoRan Copper & Gold reported a strong second quarter, the company has ratcheted down its expectations for Grasberg copper and gold production through 2008. This, in part, caused Motley Fool to say it isn’t their kind of stock. However, the company is also paying a special dividend of $0.75 per share.
Glamis Gold Ltd. (GLG) reported record net income of $30.3 million, or $0.20 per share, for the quarter ended June 30, 2006. Second Quarter 2006 Highlights:

- Produced 138,637 ounces of gold at a total cash cost of $209 per ounce.

- Generated cash flow from operations of $40.4 million.

- Doubled gold reserves at Penasquito project and completed revised feasibility study.

- Received Board approval for construction of Penasquito.

- Doubled cash and equivalents since the start of 2006.

- Confirmed 2006 gold production forecast of 620,000 ounces at cash costs of approximately $190 per ounce.

Brazilian steelmaker Gerdau (GGB) said net profit climbed 9.3 percent in the second quarter from a year ago, helped by strong results at its subsidiaries outside Brazil.

Other news:

Inco now the target as its Falconbridge bid fails - both Phelps Dodge and Teck Cominco are interested in acquiring Inco. There could even end up being other bidders. Phelps rose on the news that the deal would not be three-way.

Barrick Reports Record Earnings and Cash Flow

Antofagasta Says Copper Production Falls 7 Percent

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