Mining Journal > Finance > Stockpile: Commodity improvement pushes London market ahead

Finance

Miners made strong gains in London this week as enthusiasm surrounding commodity prices returned after a poor recent run.

In particular, base metals have been on the rise this week, with copper on the verge of making its first weekly advance for nearly two months.

An improvement in base-metal prices was reflected in the diversified miners. Rio Tinto plc, which also said at its annual general meeting this week that it expected demand from China to continue its rise, was amongst the top performers with an 11% improvement.

Anglo American and Xstrata plc grew by around 9%, and BHP Billiton by more than 6%.

Gold is one metal that hasn't suffered in recent times, moving almost 3% higher through May to hover above US$1,200/oz.

According to Seymour Pierce Research, investment in the precious metal will remain strong “as external economic and geopolitical events continue to provide robust support”.

Gold miners have also maintained their solid performance, including African Barrick Gold plc (a recent addition to the main market), which was the week's biggest riser with a gain of almost 16%.

African Barrick's strong week was complemented by news that its wholly-owned subsidiary BUK Holdco has completed the acquisition of the formerly ASX-listed Tusker Gold.

Of the other gold miners, Hochschild Mining plc added almost 14% while announcing it had increased its stake in Gold Resource Corp to nearly 30%.

Jersey-based Randgold Resources Ltd edged back above the £60 mark with a 7% gain, and Centamin Egypt Ltd moved ahead by a similar amount.

In iron ore, Ferrexpo plc looks to have turned the corner with a 15% jump after holding an optimistic AGM on Thursday. The Ukrainian producer's value had fallen by more than a third since early April, but with a positive outlook and rumours circling about interest from Rio Tinto it has rebounded.

Of the small caps, Mariana Resources Ltd ended the week as top gainer, although Bellzone Mining plc was earlier pushing for top spot after announcing a transport agreement with China International Fund Ltd for the financing of port and rail infrastructure to transport iron ore from a planned development in Guinea.

The company's share price was up by more than 50% earlier in the week but had softened to be 'only' 22% up by Friday afternoon.

Meanwhile, Mariana's share price added nearly 31% in the week as the company announced some bonanza grades from intersections at its Calandria Norte deposit on the Las Calandrias gold project in southern Argentina. Highlights included a 4.5m hole at 98g/t Au and 72g/t Ag from 81.5m, including 0.75m at 443g/t Au and 307g/t Ag.

Chromex Mining plc added nearly a fifth to its market value after securing US$5 million in funding for a Dense Media Separation (DMS) circuit and plant improvements at its Stellite opencast chrome mine in South Africa.

Angel Mining plc fell by the most amongst the monitored AIM stocks after defaulting on its latest quarterly loan repayment (due to delays in gold production and in securing finance for a project). The company is in ongoing discussions with the financing agent, Cyrus Capital Partners, and has already agreed a two-week reprieve to find a solution.