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.
Gold eked out small gains not far above 11-month lows on Friday in thin pre-Christmas holiday trade as it attempts to build a base above the $1,130 an ounce level.
The price of gold has lost $200 an ounce since the election of Donald Trump (against almost universal consensus that a victory for the property tycoon would lead to a surge in the price).
After enjoying its best start to the year since 1979 with prices coming within sight of $1,400 in July, gold’s gains in 2016 have now been trimmed to 6.8% or an underwhelming $70 an ounce.
Gold stocks made the most of Friday’s lift in the gold price with gains for all major producers. Shares of top gold miners Toronto’s Barrick Gold and Denver-based Newmont Mining enjoyed 3% gains on the day. Further down the rankings the bump was greater with South Africa’s Sibanye Gold, a top ten producer, gaining 3.4% while Canada’s Iamgold advanced 3.6% and Novagold 3.8%.
Despite Friday’s positive movements, the damage to the sector since November 8 has been heavy with double digit losses for all the top producers (barring Moscow-based Polyus which is actually up 3.8% since then).
Together the top 12 listed gold mining companies in terms of output lost $18.8 billion in value since the US elections with Australia’s Newcrest losing $3.5 billion alone. In percentage terms Sibanye was hardest hit with a near 40% decline, a move exacerbated by its ill-timed acquisition of Stillwater Mining, the only PGM producer in the US.
6 Comments
Kenneth Viney
Gold production in Canada will benefit as the Canucklehead dollar keeps slipping. I have a lot more respect for the average Yank since the election of Trump while the Yanks have a competent leader we Canadians have a snow board instructor running the country and members of the House of Commons are no better chanting ” FOUR MORE YEARS, FOUR MORE YEARS” last time Obama was in Ottawa. The only reason the Canuckleheads buy into the progressive liberal socialism is because they watch too much U.S. TV especially CNN and NBC, I believe these producers are trying to corrupt free market capitalism. CUT THE CORD.
mijanko
I find it bizarre that in your headline you’ve concluded a man who has not even taken office yet is responsible for the current change in value.
Had I jumped from the 38th story of a building citing “TRUMP is coming!”, would he be convicted?
I have enjoyed your writings until this. Please do not reduce your establishment to tabloid status. This is anything but professional journalism.
derprof
I agree, wholeheartedly.
SanPas
I’d agree with the sentiment; but, for the fact that you’re missing a big point. Markets are adjusting in anticipation to Trump’s pending ascension to the office of president. Coal miners have enjoyed a bit of a boost since it became evident that Trump would win. A more visible effect has come by way of reaction to his Tweets — e.g. he bashed Boeing the stock goes down: He then Tweets about buying F-18’s, the stock goes up. And yeah, he is moving markets and causing nation’s to rethink policies despite still being citizen Trump.
SanPas
Miners had expected Trump to boost their fortunes. Well, perhaps they can enjoy their tax increases whilst standing in the unemployment line.
Sunshine Johnston
this takes the cake for the dumbest thing ive ever seen posted on this site Frik Els should go work frikn elswhere