Mining Journal > Finance > Stocks rise as underlying commodities rally

Finance

Commodity prices continued a strong week on Friday, heading for their biggest gain since the start of April according to newswires.

Growth prospects around the world improved, as the threat of a knock-on from Europe’s debt crises faded.

China imports of copper are also expected to exceed forecasts, pushing up the price of the base metal.

Unsurprising then that the biggest gainer with a 13% rise, this week, was pure copper producer, Antofagasta plc, which on Friday also happened to receive a Citigroup upgrade.

Of the precious metals producers, Fresnillo plc, the world’s largest silver producer, was the top gainer, adding 12% in the week.

Xstrata plc was the best performing major, gaining 9%. This week the company announced the approval of a US$1.47 billion copper expansion in Brazil and reinitiated certain capital projects in Australia after the new tax agreement with government was announced last week.

Central Rand Gold Ltd lost the most value in the week, falling by 11.8%. The company completed its open offer to raise £24 million (US$36 million), by receiving acceptances for 72% of the shares on offer. The raising was completely underwritten.

Aquarius Platinum Ltd also lost ground after announcing that five workers had died in an accident at its Marikana mine, following the slowing production at its Blue Ridge mine a week ago to review the operation’s safety plan.

On AIM, the biggest riser was GCM Resources plc, which almost doubled in value. Almost 30% of GCM’s shares are owned by another AIM-listed mining and investment company Polo Resources Ltd.

On July 9, Polo sold its 10% stake in Extract Resources Ltd to Japan’s ITOCHU Corp, pushing the company 9% higher on the news. This transaction left GCM and Caledon Resources plc as Polo’s lone investments, and A$157.9 million wealthier. Caledon was also 4% ahead for the week.

Greenland-focused Angel Mining plc jumped 19% after saying it was close to completing financing negotiations with various parties. The company had previously announced in May that it was in discussions over financing agreements that would ensure continued access to liquidity.

Coal of Africa Ltd gained 16.5% on AIM despite not reporting anything. The company was forced to respond to a query from the ASX on July 9 regarding a sharp increase in its share price. The coal developer told the ASX it was not aware of any information concerning it that had not already been announced.

Others to make gains included Thor Mining plc, which rebounded from recent losses to make up 17%, while Mercator Gold plc added 15.5%.

Connemara Mining plc was the week’s biggest faller, dropping almost 21% after announcing it had raised £1.06 million through a placing.

South Africa-focused Strategic Natural Resources plc was down 18.5% on news it had posted a £0.34 loss for the February year-end.

Others to record significant losses were Palmaris Capital plc and Pan Pacific Aggregates plc with falls of 16.5% and 11.5% respectively.