Mining Journal > Finance > Stockpile:Majority of miners finish in positive territory

Finance

Lower base-metal prices late in the week dented another otherwise positive period for the FTSE miners in London.

Xstrata took the biggest hit, with a 4% drop in its share price on Thursday, pacing Kazakhyms, Eurasian Natural Resources, Rio Tinto, Vedanta Resources, Anglo American, Antofagasta and BHP Billiton for those shedding ground. Prices for copper, nickel and zinc all slid as the week progressed.
Despite the lower prices, Xstrata remains optimistic about the future of copper, which fell for three straight days amid concerns that Greece’s fiscal difficulties may curb European expansion, limiting demand.

Xstrata said on Friday that it expects China’s demand for copper to grow by 10% this year. China’s demand for the metal, used in power cables and electrical wire, is expected to drive worldwide demand by 2-3%.

Regardless of Thursday’s retreat, Xstrata still advanced by almost 4% for the week after making earlier gains.

Elsewhere, diamond miners Namakwa Diamonds Ltd and Gem Diamonds Ltd (the biggest riser of the miners) prospered with gains of almost 9% and 15%, respectively.

London-based Gem Diamonds, in particular, has been buoyed by a turnaround in the rough diamond market, and is closing on a 52-week high with this latest movement.

Overall, the main market held off the dip in commodity prices and performed well across the board for a second straight week.
Other significant gainers included Petropavlovsk plc and International Ferro Metals Ltd, which added 15% and over 12%, respectively. FTSE newcomer African Barrick Gold plc rose 7%

The major miners, Rio Tinto and BHPB, inched slightly higher as talks of shorter term iron-ore pricing contracts and a Western Australian merger of assets continued.

Only Anglo Pacific Group plc and Ferrexpo plc (both down around 1%) and UK Coal plc (0.5%) recorded losses on the main market.

On AIM, coal exploration company GCM Resources plc was up almost 80% in the week, following an article in The Times suggesting the company could finally get a permit to mine the Phulbari coal project in Bangladesh.

According to the newspaper, a major Indian power company was investigating the construction of a power station, which would pave the way for GCM getting mining approval. The shares traded as high as £3.10 on Friday morning before settling back to £2.95/share by the afternoon.

GoldStone Resources Ltd shares were also up strongly, with a 63% gain in the week despite the complete absence of any reported news. A company statement noted the share price, and then referred to recent announcement regarding an upcoming JORC compliant resource for a gold project in Ghana, and to a statement in February reporting discussions over a potential strategic alliance with an unnamed party.

Mariana Resources showed strong gains as the company announced that 14 holes of a 3,500m drill programme had been completed on the Las Calandrias project in Argentina, with all holes intersecting the same type of mineralisation as a successful drilling programme last year.

Chaarat Gold Holdings Ltd lost nearly 13% in the week as news of an uprising and overthrowing of the government in the Kyrgyz Republic hit the markets. The company has a 100% interest in a 604km2 exploration licence within the Tien Shan Gold Belt (the Chaarat gold project) in the western part of the country.

African Diamonds fell 17% to £0.40/share after the company announced a £9.6 million fund raising (US$17.7 million) at that price level. The funds will be used to increase the company’s stake in the AK6 kimberlite in Botswana to 40%.