Stocks Of Producers Of Silver, Other Industrial Metals Lead Mining Shares HigherBy Allen Sykora of Kitco News
Friday April 15, 2016 10:48
(Kitco News) - Shares of mining companies that trade in North America were mostly stronger this week, with producers of silver and other industrial metals tending to be among the best-performing companies.
As of late Thursday, Comex June gold futures were at $1,229.30 an ounce, a loss of $10.80, or 0.9 %, for the week so far. However, Comex May silver was up 82.5 cents, or 5.4%, for the first four days of the week to $16.185. Copper and iron also climbed.
During that same time span, the NYSE Arca Gold Bugs index (HUI) was down 0.824 point, or 0.4%, to 193.2425. The Market Vectors Gold Miners exchange-traded fund (GDX), which consists of stocks of gold-mining companies, rose 16 cents, or 0.7%, to $21.60 per share.
Golden Star Resources Ltd. (NYSE MKT: GSS) was among the stronger gold stocks, climbing 9.59 cents, or 19%. The company said that first-quarter production of approximately 53,000 ounces of gold exceeded its expectations. Preliminary cash operating costs were estimated at below $750 per ounce, lower than forecast. The company also received a $20 million payment from a subsidiary of Royal Gold, Inc., under an amended streaming agreement, with Golden Star saying the funds are earmarked for the Prestea underground project.
“Balance sheet issues remain, but efforts to reposition the business have already resulted in better performance while the underground projects advance to deliver further improvements,” said BMO Capital Markets. CIBC “fine tuned” its price target for Golden Star to 40 cents from 38 cents.
Golden Star Resources Ltd - Delayed Quote
Companies mainly thought of as copper miners – although they also produce other metals – rose alongside the red metal copper during the week. Comex May copper gained 8.2 cents, or 3.9%, to $2.1680 per pound as of late Thursday. Against this backdrop, Freeport-McMoRan Inc. (NYSE: FCX) gained $1.40, or 15%. First Quantum Minerals (TSX: FM), added 90 cents, or 14%. Imperial Metals Corp. (TSX: III) climbed 65 cents, or 16%.
Silver Standard Resources (NASDAQ: SSRI) added 85 cents, or 14%. The company reported lower first-quarter gold production but still in line with guidance at its Marigold mine, along with a rise in silver output at the Pirquitas mine. "Once again we delivered strong operating results at both mines with slightly higher quarter-on-quarter production at Pirquitas and increased ore tonnes stacked at Marigold, setting up the mine for solid production in the second quarter,” said Paul Benson , president and chief executive officer.
CIBC listed a price target of $7.50, up from $7.
Great Panther Silver Ltd. (NYSE MKT: GPL) rose 12 cents, or 12%. The company’s first-quarter production from its two Mexican mines totaled 1,009,828 silver-equivalent ounces, within guidance and an increase of 2% from the same period a year earlier. Gold output was up 19%, while silver output was down 10%.
Rodman & Renshaw reiterated its “buy” rating for Great Panther and upped its price target to $1.50 from $1.10 per share. Rodman & Renshaw pointed out that Great Panther’s output was stable compared to the fourth quarter even though throughput decreased, which means the upcoming earnings report could show that costs fell quarter-on-quarter. “Our updated price target is primarily a reflection of our expectation of the lower costs achieved towards the end of 2015 continuing into 2016,” Rodman & Renshaw said.
First Majestic Silver Corp. (NYSE: AG) added 69 cents, or 10%. Higher silver prices helped, plus the company reported that production in the first quarter from its six operating silver mines hit a record of 5.1 million silver-equivalent ounces, a year-on-year increase of 30%.
Fortuna Silver Mines Inc. (TSX: FVI) was up 56 cents, or 10%. The company said first-quarter output from its two operating mines in Latin America exceeded its expectations. Fortuna produced 1.6 million ounces of silver, 9,264 ounces of gold plus base metal by-products. The gold and silver output were down year-on-year but base-metals output was higher.
Meanwhile, shares of Pacific Booker Minerals (TSXV: BKM) led the decliners, dropping 15 cents, or 18%.The company’s shares frequently make big moves in either direction. Pacific Booker is in the advanced stage of developing a copper/gold/molybdenum deposit on the Morrison property in British Columbia.
A number of South African gold-mining companies – who have been strong for most of the year as they were helped by not only rising gold prices but weakness in their own currency which meant still-higher rand-denominated prices of gold – were on the defensive. This occurred as the rand strengthened against the U.S. dollar through late Thursday. Harmony Gold Mining Co. Ltd. (NYSE: HMY) lost 35 cents, or 9%, even though the company maintained its 2016 guidance and said it aims to pay off all debt by year-end. Gold Fields Ltd. (NYSE: GFI) shed 25 cents, or 6%. Randgold Resources Ltd. (Nasdaq: GOLD) lost $1.85, or 2%.