Mining Journal > Finance > Screens mostly green as metal prices gain

Finance

Most mining stocks listed on London's main board were up this week as copper had one of its best periods of the year so far. Sentiment was helped by an increase in the Euro Zone purchasing-managers index.

The main exceptions to this week's share price appreciation on the main board were UK Coal plc and Russian gold producer Petropavlovsk plc, which fell 5% and 6%, respectively. Both falls followed production and financial updates.

In its interim trading statement, UK Coal said that it expects to make an operating loss of around £52 million (US$80 million), compared with a loss of £37.7 in the year-earlier period.

At Petropavlovsk, lower than expected second-quarter production has resulted in an adjustment of management’s forecast to the lower end of its 670,000-700,000oz target for the year to end-December.

Copper producer Kazakhmys plc was the top gainer with a 16% movement. The Ukrainian iron-ore producer Ferrexpo plc was up 14% following an announcement that the company had cancelled a US dollar bond issue. This followed a survey to "gauge the market", but highlighted the company's "robust liquidity".

Vedanta plc group company Sesa Goa reported strong results, beating analyst estimates, and the share price was up 12% by lunchtime on Friday.

On AIM, shares in Karelian Diamond Resources plc surged on news it had established an information-sharing deal with Rio Tinto. The Dublin-based miner shot up more than 300% to be the exchange’s biggest riser for the week.

An all-share takeover offer from property developer Christian Candy’s pushed Metals Exploration plc almost 27% ahead. The deal values the Philippines-focused nickel and copper miner at about £36 million, a 27% premium on the day before the offer was made.

Petra Diamonds Ltd was up 20% after releasing a positive trading update. The London-based miner said diamond prices in the six months to end-June “had returned to the levels experienced” before the global financial crisis at US$195/ct.

Exploration and development company Uranium Resources gained more than 13% after an announcement that it had raised £0.8 million through a subscription of 40 million new ordinary shares.

The week’s biggest faller was Kefi Minerals plc with a 22% drop. The Turkey and Saudi Arabia operating company lost much of the 33% it gained last week when it said that its partner in the Artvin gold project, Centerra Gold, had pulled out of the joint venture.

Despite announcing it had made an all-share offer for Kopane Diamond Development plc, Firestone Diamonds plc fell over 17%. Technically a reverse takeover, the proposal would see Kopane’s shareholders own about 52% of the combined group, while Firestone’s directors would retain their current positions.

Others to record significant losses included Eurasia Mining plc and European Nickel plc, both of whom saw a share price fall of more than 14%.