Gold stocks explode higher – Barrick up 11%

Futures contracts in New York with December delivery dates jumped 2% to a high of $1,156 an ounce – gold’s best level in a month.

After weeks of lacklustre trade ahead of the US Federal Reserve interest rate decision, volumes on Comex shot up to twice the daily average on Thursday with just under 20 million ounces traded.

With fundamentals pointing to further upside potential for the metal, gold investors piled into mining stocks in massive volumes. The world’s top gold mining stocks gained steadily during the day and traded at their highs at the close on Thursday.

Barrick Gold Corp (NYSE:ABX, TSE:ABX) jumped 10.8% with more than 33 million shares changing hands, 12 million more than already high post-Fed interest. The counter was the sixth most actively traded stock on the New York Stock Exchange, attracting more buying interest than the likes of Ford Motor and Citigroup.

After falling to its its lowest since 1989 yesterday, today’s surge restores the world’s top producer of the metal’s market worth to $7 billion in New York. Barrick is still trading nearly 40% below its opening levels for the year as the Toronto-based company attempts to get rid of assets in a down market to tackle crippling debt. 

Barrick’s gold production is expected to fall to between 6.1m – 6.4m ounces this year and the company announced last month that it has completed scenario planning to withstand a $900 an ounce gold price.

The world’s most valuable gold stock, Goldcorp (TSE:G, NYSE:GG) advanced nearly 7% lifting the company’s market capitalization back above $10 billion in New York after more than 11 million shares changed hands.

The year-to-date decline for the Vancouver-based firm is a relatively modest 17% in Canadian dollar terms thanks to the falling loonie which hit fresh 11-year lows today. After a record second quarter Goldcorp is forecasting a whopping 20% production increase this year at the high end of its forecast range of between 3.3m – 3.6m ounces.

Agnico Eagle’s Meadowbank open-pit gold mine in the Nunavut Territory of Canada

World number two in terms of production Newmont Mining Corp (NYSE:NEM) surged 7%. Denver-based Newmont, the only gold company that forms part of the S&P500 index, is having a good 2015 so far, with only 12% decline this year. While others are disposing of mines, Newmont is building its portfolio and in June acquired the Cripple Creek & Victor gold mine in Colorado for $820 million in cash from AngloGold Ashanti.

American Depository Receipts of AngloGold Ashanti (NYSE:AU), the world’s third largest gold producer in terms of output, surged 7.5% for a market value of $3.3 billion on the NYSE. AngloGold Ashanti is up a stunning 49% since hitting a 16-year low August 5.

The Johannesburg-based company is expected to produce some 4m ounces in 2015, and last week announced plans to  revive its Obuasi gold mine in Ghana in partnership with Randgold Resources.

ADRs of fellow South African miner Gold Fields (NYSE:GFI) soared 6.8% while South African peer Sibanye Gold (NYSE:SBGL) appreciated a much more modest 3.8%. Gold Fields and Sibanye are the seventh and ninth largest gold miners worldwide in terms of ounces, but rank further down the field in terms of market value.

Gold Fields is worth a shade under $2 billion in New York while investors lifted Sibanye to just over $1.1 billion in market value today. Sibanye was formed in 2012 after Gold Fields unbundled its three Witwatersrand gold mine and the Johannesburg company recently announced a deal to buy Angloplat’s Rustenburg platinum mine in the northwest of the country.

Agnico Eagle Mines (TSE:AEM, NYSE:AEM) was a one of the day’s top performers leaping 12% and swelling its market capitalization to $7.5 billion in Toronto and $5.1 billion in New York.

The stock is the only major gold producer in positive territory for the year – up 3.5% on the NYSE and a healthy 18% increase in Toronto as it makes the most of currency depreciation at its nine mines located in Canada, Finland and Mexico. Agnico’s Meadowbank mine in Canada and 50%-owned Canadian Malartic mine are ramping up production helping it to raise 2015 output guidance to 1.6 million ounces.

Randgold Resources Kibali mine on track for 600,000oz per year

Randgold Resources ADR’s trading on the Nasdaq (LON:RSS, NASDAQ:GOLD) also caught fire trading 7% higher at the close. The Africa-focused miner with a $5.4 billion valuation has kept market losses to only single digits this year. Randgold has been piling on the ounces at its mines in West and Central Africa, and in its most recent quarter topped 300,000 ounces for the first time, up 7% from 2014.

Australia’s Newcrest Mining Limited (OTCMKTS:NCMGY, ASX:NCM) joined the party, jumping 7.3% for a $6.4 billion market cap. Sixth in the output ratings Newcrest produced 2.4 million ounces in its financial year to end June. Newcrest mines copper and gold in Australia, Indonesia, Africa and Papua New Guinea and is a joint owner with South Africa’s Harmony Gold of the giant Wafi-Golpu project in PNG.

Toronto’s Kinross Gold (TSE:K) with mines in Russia reaping the rewards of a weak rouble,  matched its peers moving up in excess of 7% bringing its market worth to $2.6 billion. Kinross is on track to end 2015 at the higher end of its guidance for the year of 2.4 – 2.6 million ounces which means on ounce for ounce basis it’s one of the cheapest of the major gold companies.

Fellow Canadian miner Eldorado Gold Corp (TSE:ELD) ran up 10.1%. The miner worth $3 billion in Toronto is still down 40% since the start of the year as its mines and projects in Greece run into trouble.

Image of Meadowbank mine by Jason Pineau