Gold and Silver Stocks Best Performers

Bank of Japan's Masaaki Shirakawa joined Mario Draghi and Ben Bernanke as the latest to announce expansionary monetary policy.

The Bank of Japan followed suit today and eased monetary policy by boosting its asset-buying program. Prospects of a near-term recovery in the world’s third largest economy faded due to weakening exports and what appears to be a prolonged slowdown in Chinese growth.

“Japan’s domestic demand is still firm,” Bank of Japan governor Masaaki Shirakawa told a news conference today. “However, exports and output look weak, and a decline in oil prices is weighing on Japan’s consumer prices.”

Masaaki also said, “We judged that further monetary easing was necessary now to ensure that Japan’s economy does not slip from a path towards sustained growth with price stability.”

Gold is currently trading at US$1,771.65 an ounce up $2.95 while silver is trading at US$34.64 down slightly on the day. Monetary easing from the world’s largest central banks has helped drive up the price of gold and silver since mid-August. Some analysts see the trend continuing into the fall.

“It seems that the stars are now aligned for gold to move higher,” says Anne-Laure Tremblay, analyst at BNP Paribas. “The next hurdle to overcome will be the $1800 an ounce level, which we expect to be breached decisively in the fourth quarter.”

How has the rally in precious metals affected gold and silver stocks?

Since May 15th, 2012 the MiningFeeds Gold Stock Index has moved from 813.71 to 1,967.70 (+141.8%) and the MiningFeeds Silver Stock Index has moved from 812.92 to 2,050.34 (+152.21%). These moves have outperformed other MiningFeeds stock indexes making gold and silver stocks the best performers by far.

  • To learn more about the MiningFeeds stock indexes – CLICK HERE.

The indexes are based on comprehensive lists of publicly traded mining companies in Canada, U.S., Australia and the U.K.

  • For the MiningFeeds list of publicly traded gold stocks – CLICK HERE.
  • For the MiningFeeds list of publicly traded silver stocks – CLICK HERE.

This week, gold and silver stocks continue to shine and we take a quick look at some recent events and developments in the precious metals sector.

Today, B2Gold (Stock Profile – TSX:BTO & OTCQX:BGLPF) said it is buying CGA Mining (Stock Profile – TSXV:CGA & ASX:CGX) in a deal valued at about CDN$1.1 billion. CGA Mining produces 200,000 ounce of gold per year at its Masbate Gold Mine in the Philippines. The Masbate Gold Project has total resources of approximately 7.7 million ounces and reserves of 3 million ounces. B2Gold’s stock sold off on the news and is currently trading at $4.00 (down 7%).

Goldcorp (Stock Profile – TSX:G & NYSE:GG) reduced its ownership in Primero Mining (Stock Profile – TSX:P & NYSE:PPP). Goldcorp entered into an engagement letter together with a syndicate of underwriters whereby the underwriters have agreed to purchase 8,422,460 common shares of Primero from Goldcorp on a bought-deal basis at an offering price of CDN$5.25 per share. Primero is a Canadian-based precious metals producer with operations in Mexico. Primero’s stock is currently trading at CDN$5.15 down $0.34 on the news.

Sandstorm Gold (Stock Profile – TSXV:SSL & NYSE MKT:SAND) continued its run after completing a $150 million bought deal financing at CDN$10 per unit. Each unit consists of one common share of Sandstorm and one-third of one common share purchase warrant. Each whole common share purchase warrant entitles the holder to acquire one common share of Sandstorm at a price of $14 (U.S.) at any time prior to Sept. 7, 2017.

The company has already started to put its cash to work announcing a CDN$60 million investment to buy precious metals (gold and platinum) from Colossus Minerals (Stock Profile – TSX:CSI) produced from their Serra Pelada mine located in Para, Brazil. Shares of Colossus rallied on the news and are currently trading at $5.92 up 10.9% on the day.

As part of the agreement, Sandstorm will pay the lesser of $400 (U.S.) per ounce of gold and the prevailing market price of gold, and the lesser of $200 (U.S.) per ounce of platinum and the prevailing market price of platinum. Shares of Sandstorm Gold hit new highs today reaching CDN$11.50 on the news.

Another stock hitting new highs is Mexican miner MAG Silver (Stock Profile – TSX:MAG & NYSE MKT:MVG). Today, the company’s shares touched CDN$12.00. Earlier this month MAG closed a $33.1 million financing at $9.40 per share.

Disclosure: at publication date MAG Silver is a client of MiningFeeds.

Mike Luft

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