London Stockpile: African Barrick lists, mid-cap pure plays show most gains

Finance

African Barrick Gold plc listed on Friday after raising £581 million (US$880 million) by selling 101 million shares at £5.75 each. They were marketed at a price range of between £5.50-6.50. The shares were down £0.05 each from the offer price just after opening.

Single product, mid-cap producers were the big gainers last week, with the likes of Talvivaara Mining plc, Aquarius Platinum Ltd and Petropavlovsk plc all showing the largest gains of the main board participants.

The price of nickel continued to rise this week, and according to Bloomberg is the best performing metal of 2010, up 23% since January to US$22,760/t. The price gained 58% in 2009.

Unsurprising then that Talvivaara, with its namesake nickel/zinc mine in Finland, reached a 52-week high of £4.53/share on Thursday, showing gains of over 8% in the week.

The share price did fall later on Thursday after the company announced that it had halted production following a leakage at the settlement ponds, but the company said it had been restarted on Friday, with no impact on production expected.

The platinum price has also been heading towards annual highs, pushing Aquarius Platinum up 7.66% this week, although at its current price of £4.23/share, still below the 52-week high of £4.53/share reached in January.

Russian gold producer Petropavlovsk gained 5.76% in the week to £11.39/share. The Financial Times recently speculated that talk of another unbundling of the company’s iron ore assets onto the Hong Kong bourse may be behind the recent share price strength. The group’s chairman, Peter Hambro fuelled the rumour by describing the speculation as “perfectly reasonable”.

The fallers included UK Coal plc, which gained last week after it was announced that talks were taking place with Hargreaves Services plc over a potential merger. Namakwa Diamonds Ltd shed 5% to trade at £0.32/share after announcing earlier in the week that it had sold a 5% strategic stake to Satya, a specialist African investor, at £0.35/share.

On AIM, shares in Energybuild Group plc and its parent Western Coal Corp were up 19% and 17% respectively, after the latter announced its intention to increase group coal sales in the next financial year by 75% to 6Mt, with 80% in coking coal. Energybuild alone is expecting a 180% sales increase.

African Eagle plc, another nickel play, announced positive drilling results from work in Tanzania, sending the share price up 16.7% in the week.

Mercator Gold plc shares fell 22% in the week after the company raised £50,000 by selling shares. The company also announced that it had injected its New Mexico copper asset into a TSX-listed vehicle to unlock value and develop that asset.

Beowulf Mining plc, announced a much larger £1 million raising, sending its shares down 13.8%.

No explanation behind the 12.87% drop in Caledon Resources plc shares, although the company had gained by as much as 37% since news of higher coking-coal prices hit the market earlier this month.