Silver-Mining Stocks Shine Brightest; Newmont Jumps After Earnings Beat
Friday April 22, 2016 10:21
(Kitco News) - Shares of most mining companies that trade in North America posted gains during the first four days of this week, with silver producers especially strong as the metal hit an 11-month high and gold-mining giant Newmont Mining Corp. aided by an earnings beat.
As of late Thursday, Comex June gold futures were at $1,249.50 an ounce, a gain of $13.70, or 1.1%, for the week to date. Comex May silver was up 74.5 cents, or 4.6%, for the first four days of the week at $17 an ounce.
During that same time span, the NYSE Arca Gold Bugs index (HUI) was up 9.3668 points, or 4.7%, to 207.5210. The Market Vectors Gold Miners exchange-traded fund (GDX), which consists of stocks of gold-mining companies, rose $1.05, or 4.7%, to $23.25 per share.
Shares of Newmont Mining Corp. (NYSE: NEM) rose $2.82, or 10%, as the company got lots of love from analysts after reporting first-quarter adjusted earnings that were down from a year ago but well above consensus expectations. Newmont’s stock jumped nearly 6% on Thursday, the session after the company listed adjusted net income of $182 million, or 34 cents per share.
CIBC raised its price target, calling Newmont “a solid operator with a good record of delivery on guidance,” also citing the miner’s lower cost guidance. “Newmont remains one of CIBC's preferred senior gold stocks,” the Canadian bank said. Credit Suisse called Newmont “one of our top picks in the gold sector for its operational consistency.”
Newmont Mining Corp - Delayed Quote
Newmont kicked off the earnings season for the major North American producers. Barrick Gold Corp. (NYSE: ABX), Goldcorp Inc. (NYSE: GG) and Agnico Eagle Mines Ltd. (NYSE: AEM) are all scheduled to report next week.
Collectively, the biggest gainers for the week were silver companies, as the rise in silver prices outpaced gold. Bear Creek Mining Corp. (TSXV: BCM) jumped 69 cents, or 37%. Early in the week, the company took the step of issuing a news release saying there “are no material corporate developments and the company is not aware of any undisclosed material developments” to affect its stock price.
Excellon Resources (TSX: EXN) jumped 29 cents, or 30%, during a week in which the company said first-quarter production was up from the fourth. "In late February, we accessed the Rodilla Manto, approximately seven months ahead of schedule as we encountered mineralization outside of the Platosa resource block model and dry mining conditions facilitated rapid development,” says Brendan Cahill, president and chief executive officer.
Numerous other silver producers also had heady gains. Endeavour Silver Corp. (NYSE: EXK) climbed 88 cents, or 29%. Avino Silver & Gold Mines Ltd. (NYSE MKT: ASM) added 32 cents, or 26%. Great Panther Silver Ltd. (NYSE MKT: GPL) jumped 28 cents, or 24%. Silvercorp Metals Inc. (TSX: SVM) climbed 51 cents, or 22%. Hecla Mining Co. (NYSE: HL) – which last week reported record silver-equivalent output in the first quarter -- jumped 58 cents, or 18%. And the list goes on.
Copper producers also had a good weak as the price rise in this metal also exceeded gold. Comex May copper rose 9.75 cents, or 4.5%, to $2.2515 per pound for the week through Thursday. Against this backdrop, Capstone Mining Corp. (TSX: CS) jumped 20 cents, or 36%, and First Quantum Minerals (TSX: FM) rose $1.46, or 20%.
Pacific Booker Minerals (TSXV: BKM) added 21 cents, or 33%. Shares of the company, which is in the advanced stage of developing a copper/gold/molybdenum deposit in British Columbia, tend to make huge swings on a weekly basis.
Meanwhile, Primero Mining Corp. (NYSE: PPP) was among the few decliners, falling 47 cents, or 23%. The company reduced its guidance for 2016 after first-quarter output fell below expectations during the implementation of safety measures at Sam Dimas that resulted in a deferral of some high-grade stopes, the company said. "Although production was well below our original expectations during this implementation period, we are committed to getting our operations up to full capacity as quickly as possible,” says Ernest Mast, president and chief executive officer.