Mining Journal > Finance > Stockpile: ENRC rises on corporate review outcomes

Eurasian Natural Resources Corp plc (ENRC) was the top gainer of the mining stocks on the London market this week following  the outcome of a corporate governance review at the company.

The diversified miner, one of just two companies to finish in positive territory for the period, added more than 3%. Dr Johannes Sittard will stay on as chairman, while Felix Vulis has withdrawn his resignation as chief executive.

ENRC’s new board will comprise 11 directors, six of whom will be independent non-executives.

However, ENRC has fallen more than 45% in the year to date, with much of that drop occurring after independent directors Sir Richard Sykes and Kenneth Olisa were controversially voted of the company’s board at its annual general meeting.

The only other company to record a gain was South African producer International Ferro Metals Ltd (IFM), which added almost 3%.

Earlier this month, IFM reported a full-year loss of R214 million (US$28 million) owing to lower ferrochrome sales volumes and a stronger rand.

Precious-metals miners struggled again this week as gold and silver prices maintained lower levels following a sharp fall at the end of the previous week.

Gold’s five-day trading value leading up to September 29 was US$1,646/oz, while the spot silver price fell to around US$30/oz.

The hardest-hit precious metals miner was Central Rand Gold Ltd, although that was not primarily to do with the weaker value of gold.

Shares in Central Rand Gold fell by more than 62% after South Africa’s Department of Mineral Resources (DMR) cancelled its mining right after it was deemed the company had contravened regulations.

Other gold producers to record significant losses included Petropavlovsk (12.5%), African Barrick Gold plc (11.5%) and Allied Gold plc (10.8%), while on the silver front, Hochschild Mining plc (11%) and Fresnillo plc (4%) both had notable falls.

Xstrata plc was the top performing major resources group, closing the week steady. Anglo American plc (1.4%) and BHP Billiton (1.8%) suffered losses, while Rio Tinto was down 3%.

Afferro Mining Inc was one of the top gainers on AIM this week, with a 16.7% increase in shareprice.

The African iron-ore company, announced exploration news regarding its Nkout iron-ore project in the week.

Drilling had intersected “significant widths” of “high-grade material” according to an announcement. Results included 51m at 63.4% Fe, 30m at 60.4% Fe and 48m at 58.6% Fe.

The company said: “These results support the existence of a high-grade cap overlaying a BIF (banded iron formation) deposit.” A scoping study is expected by the end of October.

GMA Resources plc was down over 50% for the week after it said its board was “reviewing with its advisers the sustainability of operations in Algeria”, its principle assets.

The company said it expected its loss for the six months ended 30 June to be 166% higher than a year earlier at £2.66 million.(US$4.1 million).

Gold sales were more than half the previous amount, at 5,984oz, while the strip ratio had increased from 7.37 to 13.36 reflecting the increasing depth of existing mining zones, according to the company.

Hambledon Mining plc also released a half-year report during the week. The company’s shares were down 18%.

The Kazakh-focused gold producer said: “Although the year started relatively well with a much better first quarter than in 2010, the second quarter proved difficult as we began to remove excess waste from the open pit at Sekisovskoye.”

An operating loss of £1.43 million was recorded for the six months to end-June. Production from the Sekisovskoye gold mine totalled 9,769oz.