Mining Journal > Finance > Stockpile: Resources stocks on the up as commodities improve

Metals producers on London’s main market rallied this week following a decline caused by stumbling commodities.

After dropping steadily from a record on May 2, gold rose back above the US$1,500/oz level in response to the falling US dollar. Silver was steady above the US$30/oz mark after a rapid recent drop from its 30-year high.

Copper was also on target for its first weekly advance in close to a month owing to speculation that demand may increase because of lower stockpiles.

The improvements were reflected in many mining companies, including the majors, which all closed ahead of last week’s finish.

Xstrata plc was the best performer, in a week it announced plans to shut its Mt Isa copper-smelting and refining operations in north Queensland by the end of 2016. The Swiss-based miner gained 4% as it indicated focus would turn to developing more mines in the Australian region.

BHP Billiton, Rio Tinto and Anglo American plc all added around 2% in a relatively quiet news week by their standards.

African Barrick Gold plc didn’t benefit from gold's rebound after more problems surfaced at its operations in Tanzania.

Most notably, seven people were killed at the company’s North Mara when police were forced to repel 800 intruders who entered the mine site with the intent to steal ore.
The company also suffered a setback at its Buzwagi mine, where an estimated 10,000oz of gold production was lost after a malfunction in the SAG mill motor.

The top gainer on the main market was Central Rand Gold Ltd with a 36.5% rise, while International Ferro Metals Ltd was the biggest faller with a 10% drop.

Tanzanite One Ltd’s return to profitability did not go unnoticed by the market as the share was AIM’s top performer this week, up 22.5%.

The company’s earnings before interest, tax and depreciation were US$3.1 million for the year to end-December, compared with a loss of US$0.3 million a year earlier.

Grades, production and tanzanite prices all improved in the year, boosting the bottom line. The improved performance has carried on into the current year, with total sales in the three months to end-March up 48% compared with a year earlier.

Jubilee Platinum plc shares were also a notable gainer, up 11.2%, after the company announced Friday that it had received an approach regarding a possible offer for the company.

The South African based company owns its own smelting process and facilities, as well as the Tjate platinum group metals project.

Tertiary Minerals plc, up 10%, announced sampling results from archived drill core at a fluorspar project in Norway. The company also obtained an extensive archive of data from Norsk Hydro over the Lassedalen project which it says “reveals that evaluation of the project progressed further at that time than public records suggested”.

The share prices of Central Asia Metals plc (-16.8%) and Oxus Gold plc (-15.0%) fell the most over the week, although not on the back of any corporate news.

Platmin Ltd released results for the March quarter last Friday. The company reported a US$34.8 million loss in the period, and the share price fell 14.7% in the week.