Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
A cracking two months has seen Randgold Resources Limited (GOLD) rise to top $100 per share putting in a stunning performance over both the long term and more recently it has certainly come life.
Taking a quick look at the chart we can see that the technicals indicators are on the high side which suggests that a breather could be on the cards. However, the precious metals are in a bullish mood and we do expect them to finish the year on a high note. We did acquire this stock when it was in the thirty dollar range and later disposed of it for a good profit. We also generated good profits from a few well timed option trades. Trying to buy it back proved a tad too difficult for us as the ‘dips’ still appeared to be expensive. So, there we go, thats what happens when we are too stingy with our bids. We still watch it, green with envy and hopefully we might spot a good entry point or a short term, in and out options trade, so stay tuned. If you still hold Randgold Resources then give yourself a pat on the back as you have done very well indeed.
This is a comment from Smartrend who comment from time to time on the action of various stocks:
Shares of Randgold Resources (NASDAQ:GOLD) are trading 1% higher today, recently trading at $102.18. The stock has been drifting higher over the past ten trading days and is currently trading in a technical uptrend.
The put volume today was 2,480 contracts, which is 1.9x the average daily volume of 1,311. Usually high put volume is an indicator that many investors are looking for lower prices in the near future.
We would just like to remind you that although the PUT volume might be high there is a trader on the other side of this trade who is equally as confident that the stock will rise and that is why they sold the PUTs. The point is that we need to take care in the way in which we use any data and not be reliant on just one factor or indicator, no matter how much we love them.
Anyway, moving on we have this snippet from Randgold’s web site as background information if you are a new comer to this site:
Major discoveries to date include the 7.5 million ounce Morila deposit in southern Mali, the 7 million ounce Yalea deposit and the 3 million ounce Gounkoto deposit, both in western Mali, the 4 million ounce Tongon deposit in the Côte d’Ivoire and the 3 million ounce Massawa deposit in eastern Senegal. Randgold financed and built the Morila mine which since October 2000 has produced more than 5.5 million ounces of gold and distributed more than US$1.5 billion to stakeholders. It also financed and built the Loulo operation which started as two open pit mines in November 2005. Since then, an underground mine has been developed at the Yalea deposit and construction of a second underground operation is underway at the Gara deposit. First gold production from the company’s new mine being developed at Tongon is scheduled for the fourth quarter of 2010.
Randgold’s current major projects are Gounkoto on the Loulo permit in Mali, Massawa in Senegal and Kibali in the Democratic Republic of the Congo. In 2009 the company acquired a 45% interest in the Kibali project, which now stands at 9.2 million ounces of reserves and is one of the largest undeveloped gold deposits in Africa. Randgold also has an extensive portfolio of organic growth prospects, which is constantly replenished by intensive exploration programmes in Burkina Faso, Côte d’Ivoire, DRC, Mali and Senegal.
Randgold has a market capitalisation of $9.20 billion. The average volume of shares traded is 420,000 to 600,000 per day. This stock has a 52 week high of $103.45 and a 52 week low of $67.57.
Randgold Resources Limited trades on the NASDAQ under the symbol of GOLD and on the London Stock Exchange under the symbol of RRS.
Over in our options trading den they have updated the chart to show all the closed trades as of today, so you can see exactly how it is going, please click this link.
Stay on your toes and have a good one.
Got a comment then please add it to this article, all opinions are welcome and very much appreciated by both our readership and the team here.
On Friday, 27th August 2010, we closed another successful trade banking a profit of 79.46% on Call Options on Silver Wheaton.
The latest trade from our options team was slightly more sophisticated in that we shorted a PUT as follows:
On Friday 7th May our premium options trading service OPTIONTRADER opened a speculative short term trade on GLD Puts, signalling to short sell the $105 May-10 Puts series at $0.09. On Tuesday the 11th May we bought back the puts for just $0.05, making a 44.44% profit in just 4 days, with more positions opened yesterday. Drop by and take a look.
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