Peru goes to the Polls: 10 Mining Stocks to Watch

Peru, famous around the world for Mach Picchu and the mining of silver, copper, zinc and gold.

A cursory look at Peruvian mining will show you that many of the world’s senior mining companies have operations there. The list of majors in the South American county includes Barrick Gold (TSX: ABX), Newmont Mining (TSX: NMC), BHP Billiton (NYSE: BHP), Freeport-McMoRan Copper & Gold (NYSE: FCX), and Teck Resources (TSX: TCK.B).

These major producers have solidified Peru’s status as the world’s largest producer of silver, second largest producer of copper, third largest producer of zinc and fifth largest producer of gold. Peru also produces molybdenum, tin, lead, iron ore and other industrial minerals.

On April 10th Ollanta Humala, a leftist nationalist, won the first round of Peru’s 2011 elections with 31.7% of the vote. The results set the stage for a runoff election this Sunday, June 5th, against Keiko Fujimori, the daughter of former President Alberto Fujimori.

Humala’s election success in Peru caught the financial markets off guard.  The cost of insuring Peru’s debt against default jumped to a five-year high relative to neighboring Colombia, and the market value of Peru’s stock index plunged by roughly $18 billion in less than three weeks. The sell-off in Peruvian equities effected mining stocks around the world.

After the first round, Eduardo Suarez, a strategist at RBC Capital Markets in Toronto said the market may be overreacting and predicted Humala will lose in a second-round ballot as voters who dislike Humala will rally around his opponent. There was a precedence for Suarez’s hypothesis. During Peru’s 2006 elections, Ollanta Humala received 30.6% of the first round votes. A runoff was held between Humala and Alan García of the Peruvian Aprista Party and Humala narrowly lost with 47.4% of the votes versus 52.6% for García.

On May 12th, 2011, Reuters reported that Fujimori was leading a poll with a narrow 2.7-point lead, getting 40.6% of decided voter support to Humala’s 37.9%, which stabilized the Peruvian financial markets and resulted in a modest 1.1% recover in the benchmark stock index. One June 1st,  research company Eurasia Group reported that the race had tightened considerably and was a “statistical tie“. And today, just three days before the election, Reuters reported that Fujimori’s was holding a slight lead over Humula (51% to 49%) based on the results from pollster Ipsos Apoyo. The news of the poll sent the Lima General Index up 7.2%.

Erasto Almeida, an analyst at  Eurasia Group said, “Despite the tight race, the risk of serious post-election political instability is low, even though a slow counting of votes could generate significant noise in the weeks following the election.”

With an outcome that is too close to call the mining world will undoubtedly be watching the Peru election on Sunday with bated breath. MiningFeeds.com offers up 10 Peruvian mining stocks that could be real rollercoaster-rides over the next few days and weeks. We list these issuers in alphabetical order, note their minerals of interest and the percentage change in their share price since the possibility of a Humala victory has been overshadowing the markets.

1. Andean American Gold (TSX-V:AAG)

Minerals: gold & copper.
Closing price on April 8th, 2011:   $0.79
Closing price on June 2nd, 2011:  $0.64
Percent change:  – 19.0 %

2. Bear Creek Mining (TSX-V:BCM)

Minerals: silver.
Closing price on April 8th, 2011:   $10.67
Closing price on June 2nd, 2011:  $6.44
Percent change:  – 39.6 %

3. Candente Copper (TSX:DNT)

Minerals: copper, gold & silver.
Closing price on April 8th, 2011:   $1.81
Closing price on June 2nd, 2011:  $1.59
Percent change:  – 12.2 %

4. Dorato Resources (TSX-V:DRI)

Minerals: gold & copper.
Closing price on April 8th, 2011:   $0.57
Closing price on June 2nd, 2011:  $0.315
Percent change: – 44.7 %

5. Duran Ventures (TSX-V:DRV)

Minerals: gold, silver, zinc, lead, molybdenum.
Closing price on April 8th, 2011:   $0.40
Closing price on June 2nd, 2011:  $0.37
Percent change:  – 7.5 %

6. Fortuna Silver (TSX:FVI)

Minerals: silver.
Closing price on April 8th, 2011:   $6.43
Closing price on June 2nd, 2011:  $4.79
Percent change:  – 25.5 %

7. Panoro Minerals (TSX-V:PML)

Minerals: copper & gold.
Closing price on April 8th, 2011:   $0.46
Closing price on June 2nd, 2011:  $0.49
Percent change:  + 6.5 %

8. Rio Alto Mining (TSX-V:RIO)

Minerals: gold & copper.
Closing price on April 8th, 2011:   $2.22
Closing price on June 2nd, 2011:  $2.33
Percent change:  + 5.0 %

9. Tinka Resources (TSX-V:TK)

Minerals: gold, silver, zinc & lead.
Closing price on April 8th, 2011:   $0.64
Closing price on June 2nd, 2011:  $0.53
Percent change:  – 17.2 %

10. Trevali Resources (TSX:TV)

Minerals: zinc, lead, copper & silver.
Closing price on April 8th, 2011:   $2.23
Closing price on June 2nd, 2011:  $1.45
Percent change:  – 35.0 %

Disclosure: at publication date Dorato Resources is a client of MiningFeeds.com.

If you would like to receive our free newsletter via email, simply enter your email address below & click subscribe.

MOST ACTIVE MINING STOCKS

 Daily Gainers

 Lincoln Minerals Limited LML.AX +125.00%
 Golden Cross Resources Ltd. GCR.AX +33.33%
 Casa Minerals Inc. CASA.V +30.00%
 Astro Resources NL ARO.AX +25.00%
 Athena Resources Ltd. AHN.AX +22.22%
 Adavale Resources Limited ADD.AX +22.22%
 Azimut Exploration Inc. AZM.V +21.98%
 New Stratus Energy Inc. NSE.V +21.05%
 Dynasty Gold Corp. DYG.V +18.42%
 Azincourt Energy Corp. AAZ.V +18.18%

Download the latest Solaris Resources (SLSSF) Investor Kit

You have successfully subscribed to the newsletter

There was an error while trying to send your request. Please try again.

MiningFeeds will use the information you provide on this form to be in touch with you and to provide updates and marketing.