Mining Journal > Finance > Stockpile: Investors sell gold

After rising to a new high of US$1,364.77/oz this week, bullion had dropped back in value by Oct 8 as the US dollar added strength.

Still, gold has moved 21% higher this year and is on course for a 10th consecutive annual gain, a winning streak not matched since 1920.

On the London market, Petropavlovsk, Russia’s third largest gold producer, was the biggest faller this week with a 9% lower value. The company, formerly known as Peter Hambro Mining, said on Oct 8 that it was forced to reduce the value of its initial public offering of iron ore unit, IRC Ltd, on the Hong Kong exchange to about US$240 million.

Fellow gold producers Centamin Egypt and Randgold Resources, also suffered with 3% drops, while African Barrick Gold was marginally lower.

Another company in negative ground was Kazakhmys plc. The company was down 5.5% on news chairman Vladimir Kim had sold more than a quarter of his shares in the company for £838 million (US$1.33 billion), his first sale since the company listed in 2005.

The major diversified producers (BHP Billiton, Rio Tinto and Xstrata) all finished higher. BHPB returned the best performance of the three with a 3% gain as it continued its pursuit for Canada’s Potash Corp of Saskatchewan.

In the latest development of BHPB’s takeover attempt, the US$40 billion bid was backed by a report by The Conference Board of Canada, which concluded the offer had “few negative takeover effects”.

Nickel miner Talvivaara Mining Co was the top riser on the main market with a gain of almost 9%, while Aquarius Platinum also performed well, adding more than 8%.
On AIM, the top mover was gold-silver explorer Condor Resources which soared 85% on the week.

Creat Resources Holdings’s value jumped 56% after Galaxy Resources, of which it owns a 20% interest, announced it had started lithium concentrate production at the Mount Cattlin mine in Western Australia.

Resolving a dispute with the Government of Sierra Leone proved a good move for Titanium Resources Group, which was 30% higher. The agreement between the two parties left the government with a 23% holding in Titanium.

Others to make notable gains included Kefi Minerals and GMA Resources, which added 28% and 23% respectively.

News of low-grade results Greatland Gold’s Ernst Giles project in Western Australia has hurt the company as it shed 25% to be the week’s biggest faller. The company said the highest result returned was 0.7m at 0.44g/t of gold.

Altona Energy dropped 14% after saying a feasibility study into a A$3.2 billion (US$3.1 billion) Arckaringa project in South Australia will be started before the end of the year. The company, along with joint venture partner China Natinoal Offshore Oil Corp (CNOOC), announced details of a A$40 million bankable feasibility study this week.

Others to lose ground included Pan Pacific Aggregates and Solomon Gold, which both fell around 12%.