Metals News
Most Mining Shares Post Declines Taking Cues From Gold Price
industry news
Sep 8,2015

By  Paul Ploumis 08 Sep 2015  Last updated at  03:50:27 GMT

(Kitco News) - Shares of precious-metals mining companies traded in North America were mostly lower during the first four days of the week.

As of Thursday’s close, Comex December gold futures were down 0.8% since last Friday’s close. The contract’s official close Thursday was $1,124.50 an ounce, a loss of $9.50 for the week.

During that same time span, the NYSE Arca Gold Bugs index (HUI) was down 6.9578 points, or 6%, to 109.1586. The Market Vectors Gold Miners exchange-traded fund (GDX), which consists of stocks of gold-mining companies, fell 87 cents to $13.38, a decline of 6.1%.

In the run-up to the long Labor Day weekend in the U.S. and Canada, there was a dearth of news in the mining sector this week. As a result, much of the weakness in mining shares very well may have been linked to the softer tone in gold, with analyst ratings having an impact in some instances.

One company in the news fared better than most miners. OceanaGold Corp. (TSX: OGC) lost 12 cents, or 5%. The company announced production and guidance for the second half of the year for a mine that it is acquiring - the Waihi Gold Mine in New Zealand. Waihi production guidance range is seen in a range of 65,000 to 70,000 ounces for the second half of 2015. Waihi cash cost guidance was put in a range of $490 to $520 per ounce sold, with all-in sustaining costs put in a range of $650 to $680 per ounce sold.

Three companies lost 16%, including Primero Mining Corp. (NYSE: PPP), down 48 cents; Harmony Gold Mining Co. Ltd. (NYSE: HMY), down 14.98 cents; and Coeur Mining, Inc. (NYSE: CDE), down 56 cents.

Fortuna Silver Mines (TSX: FVI) lost 50 cents, or 15%. First Majestic Silver Corp. (NYSE: AG) fell 48 cents or 14%. Yamana Gold Inc. (NYSE: AUY) lost 25 cents, or 13%.

Iamgold Corp. (NYSE: IAG) fell 24 cents, or 11%. At the start of the week, Standard & Poor’s cut the company’s credit rating.

One of the biggest winners of the week in the mining sector was Eco Oro Minerals Corp. (TSX: EOM), up 13.5 cents, or 31%. The company announced in late August that it has closed a previously announced non-brokered private placement with gross proceeds of $3.3 million, with plans to use this for general working capital purposes.  Eco Oro Minerals Corp. is a publicly-traded precious metals exploration and development company with a portfolio of projects in Colombia.

Imperial Metals Corp. (TSX: III) added 46 cents, or 6%. In late August, the exploration, mine development and operating company announce the closing of its previously announced non-brokered convertible debenture private placement financing for gross proceeds of $30 million.

Alamos Gold (NYSE: AGI) gained 19 cents, or 5%. On Monday, the company announced the purchase of 8 million common shares of AuRico Metals Inc., representing approximately 6.34% of the outstanding common shares of AuRico. The shares are being acquired by Alamos by way of private placement at a price of 70 Canadian cents per share.

Despite the soft performance for shares of mining companies this week, one famed economist said he would place his bets on these stocks, particularly precious metals miners. Marc Faber, editor of the Gloom, Boom & Doom Report, told Bloomberg TV that he likes Freeport-McMoRan, Barrick Gold Corp. and Newmont Mining Corp.

Courtesy: Kitco News

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