Mining Journal > Focus > Stockpile: Stronger dollar knocks miners

A strong dollar and unease due to the military action taken by North Korea saw commodities soften in the week bringing share prices down with them. In addition, Europe’s sovereign debt crisis resurfaced, with Ireland being forced to accept bail-out funds from its peers.

By Friday morning in London only four of the main board’s miners were showing gains in the week.

Silver producer plc was top of the pile with a 2% gain. The stock itself is only a shade off its 52-week high of £14.80/share, which is also the highest price traded since the company listed back in May 2008.

No surprise then that fellow silver producer Hochschild Mining plc was also not far off its 52-week high despite shedding just under 3% in a week.

International Ferro Metals Ltd was up almost 2% following a positive address from chairman Anthony Grey at the annual general meeting this week. He pointed out the chrome producers successful application for mining rights to the Sky Chrome property adjacent to its existing mine. The project ensures the company will remain self sufficient in ore for over four decades.

Speaking on the overall market, Mr Grey said the world’s stainless steel industry was “moving ahead strongly”.

Gem Diamonds added nearly 2%. The Lesotho diamond miner sold two large rough diamonds measuring 196ct and 184ct for US$22.7 million. In addition a 4.68ct blue stone was sold at a unit value of US$155,000/ct, the highest value ever for a stone from the Letseng kimberlite mine.

African Barrick Gold plc, Lonmin plc, New World Resources NV and Vedanta Resources plc all fell by over 5% in the week.

On AIM, Thor Mining plc, which is also listed in Australia, was the week’s biggest mover with a 57% gain despite not making a notable announcement.
The company received a query regarding the sudden movement to its highest value since 2008. Thor replied with: “The company is not aware of any information that has been announced to the market which explains the movement in the recent trading of securities of the company. Further the company is not in possession of any information requiring an announcement.”

A recent increase in the price of gold and tungsten, and encouraging exploration activities at the Dundas gold project in Australia may have helped, Thor added.

Elsewhere, base metals miner Weatherly International plc jumped 30% on news it has raised £4.45 million (US$7 million) that will be used to accelerate the company’s development plans.

South American miner Patagonia Gold received approval of the biannual environmental impact report for the El Tranquilo property from Argentina’s state secretary of mining, pushing the company up 27%.

Condor Resources plc, which operates in Central America, added 26% after reporting that the latest assay results for the Andrea vein on the El Rodeo concession (La India region) had returned the highest ever gold-grade intersection.

Others to make significant gains included Greatland Gold plc and Stratex International plc, which rose 28% and 25%, respectively.

Alexander Mining plc was one of the week’s biggest fallers, dropping almost 12% after being advised that RPT Resources is giving notice terminating the consultancy with its subsidiary, MetaLeach. Alexander and RPT have a commercial agreement to develop mining projects with MetaLeach technology.

Vancouver-based Eastern Platinum Ltd shed 10% despite announcing plans of a C$300 million (US$294 million) raising to fund its Eastern Limb development plan in the Bushveld Complex of South Africa.

The companies that took the most significant hits were Oxus Gold plc and Niger Uranium Ltd, both losing about 16%.