Mining Journal > Finance > Stockpile: Global worries weigh on market

Markets fell in the week as negative global economic sentiment continued to weigh on share prices.

Mining stocks were not spared although gold stocks, driven by a strong metal price and other company specific news, did prevent some share prices from falling further.

On Thursday, US President, Barrick Obama, announced a new US$447 billion package aimed at increasing growth and employment. However the news failed to lift the S&P500, which was down another 1.3% by Friday afternoon.

Allied Gold plc was the top performer of the FTSE main board miners in the week, adding 18.56%. The spot gold price hit a record close of US$1,900/oz on Monday pushing most other precious metals miners higher with Fresnillo plc and Randgold Resources plc showing positive gains of 8% and nearly 6% respectively.

Namakwa Diamonds Ltd was up 18% having fallen in the previous week on funding concerns. The company has announced that it has secured alternative financing to replace the US$30 million facility that was withdrawn.

Glencore International plc was up by 8% to £4.21/share by Friday afternoon. Earlier in the week, private investment firm, First Reserve Corp, sold its US$800 million 5% convertible bonds and bought about 2% of equity in the company with the proceeds at a value of approximately £4.25/share.

On AIM, the top mover for the week was Solomon Gold plc, which surged 38% higher. A report from investment bank Fairfax talked up the company’s promise because of its exploration strategy.

Solomon owns or has interests in copper and gold exploration tenements in Solomon Islands and Australia.

Cluff Gold plc moved 18% ahead after reporting a 46% increase to the mineral resource at the Baomahun gold project in Sierra Leone.

The company said indicated resources at the project had increased to 2.1Moz of gold, while inferred resources now stood at 0.9Moz.

Peter Spivey, Cluff’s chief executive officer, said: “The new resources underline the opportunity for Cluff to achieve its objective of developing an open-pit gold mine at Baomahun, which has the potential to produce over 150,000oz/y.”

Churchill Mining plc, which is locked in a dispute over coal mining licences in Indonesia, added 16%. The company was informed late last month that an appeal on the balance of two mining licences had been dismissed by an Indonesian court.

Canadian company Rambler Metals and Mining plc was 11% ahead as it continues to move through the construction phase towards production at the Ming gold-copper mine in Newfoundland and Labrador.

Other miners to make notable gains included Connemara Mining Co plc and Alexander Mining plc, which added 11% each.

Recent lower than expected results have left Norseman Gold plc losing value, with the company this week finishing more than 12% down.

The Australian-focused miner reported a pre-tax loss of A$27.2 million and lower revenues of A$65.93 million for the year to end-June.

The biggest faller of the week was GMA Resources plc, which dropped 21.5%, while Irish miner Minco plc lost 12.5% in value.