By Our Man in Oz
Minews. Good morning Australia, your gold stocks seem to have had a good week.
Oz. It’s more a case of a good two weeks to best see the recent performance of ASX-listed gold producers with last week’s 11.9 per cent rise in the gold index coming on top of a 7 per cent rise in the previous week.
Minews. An index increase of almost 19 per cent is impressive given that the gold price has risen by about 3 per cent over the same time. What’s the explanation?
Oz. There are two possibilities, with the correct answer probably being a combination. Firstly, Australian gold stocks were heavily sold down last year so there’s a bit of repair work underway, and secondly the deteriorating outlook for the Australian dollar is making gold an appealing hedge against the next currency leg down, or perhaps it’s an easy way for local to get exposure to the U.S. dollar.
Minews. Will your dollar fall further, it’s already down by around 30 per cent over the past 12-months against the U.S. dollar?
Oz. You can never tip currencies moves with confidence but Australia is heavily exposed to the oil price thanks to our status as a major energy exporter with coal, gas and uranium among our major traded items, and they’re all being hit by the oil crash.
Minews. It’s time to look at the markets, starting with the key indices and any eye-catching moves before we trawl through the sectors.
Oz. The gold index has already been mentioned because it was easily the stand-out performer especially when compared with the all ordinaries index which crept up by 0.5 per cent, and the metals and mining index which was absolutely flat.
Newcrest (NCM), the local gold sector leader, was in strong demand, adding A$1.22 (11 per cent) to close at A$12.18, after trading up to A$12.23 on Friday, its highest since last March.
Troy (TRY) was another solid gold stock, rising by A7 cents (14.5 per cent) to A55 cents, meaning it has now put on A20 cents (57 per cent) over the past four weeks.
BC Iron (BCI), the iron ore producer slammed hardest during the sell-off in that sector, gained another A9 cents (14 per cent) last week to close at A71 cents, which means it has effectively doubled over the past five weeks.
Talga (TLG) was the pick of the graphite stocks, rising by A6.5 cents (27 per cent) to A30.5 cents, its highest since early last month.
Terramin (TZN) was the pick of the zinc stocks with a rise of A3 cents (27 per cent) to A14 cents, meaning it has doubled since October.
Minews. Interesting moves, now for the sectors, continuing with the gold story.
Oz. All up, bar a few stocks which were steady. Best of the rises, after Newcrest and Troy, were Northern Star (NST), up A19 cents to A$1.70. Evolution (EVN), up A15 cents to A80 cents. Gold Road (GOR), up A2.5 cents to A27.5 cents. Medusa (MML), up A8.5 cents to A79.5 cents. Regis (RRL), up A20 cents to A$2.14. Kingsrose (KRM), up A4 cents to A30 cents, and Mutiny (MYG), up A0.7 of a cent to A5.3 cents, though that relatively modest move took Mutiny to a 12-month high.
Minews. Iron ore next to see if the recovery we discussed a week ago has continued.
Oz. It did, but only just. BC Iron’s move, mentioned earlier, was the best among the iron ore stocks, most other moves were modest either way. Fortescue (FMG) slipped A5 cents lower to A$2.78, and Mt Gibson (MGX) lost half-a-cent to A27.5 cents. Stocks to gain ground included Atlas (AGO), up A3.5 cents to A26.5 cents. Sundance (SDL), up A1.4 cents to A3.9 cents, and Mineral Resources (MIN), up A20 cents to A$8.06.
Minews. The base metals next, please.
Oz. Nickel stocks did best among the base metals. Copper stocks were mixed, as were zinc stocks.
Best of the nickel sector were Western Areas (WSA), up A37 cents to A$4.20. Panoramic (PAN), up A6.5 cents to A40 cents. Sirius (SIR), up A13 cents to A$2.71, and Cassini (CZI), up A3 cents to A14.5 cents.
OZ Minerals (OZL) was the best of the copper producers with a rise of A17 cents to A$3.71. CuDeco (CDU) was the worst, losing A30 cents to A$1.65 after shelving a plan to list on the Hong Kong stock exchange. Other copper moves included: Rex (RXM), up A2 cents to A12.5 cents. Stavely (SVY), down A3.5 cents to A21.5 cents, and King River (KRC), down A0.6 of a cent to A2.8 cents.
Terramin, mentioned earlier, led a very quiet zinc sector. Other moves included Red River (RVR), up A2.5 cents to A15.4 cents, and Mungana (MUX) down half-a-cent to A12 cents.
Minews. Uranium, coal and graphite next, please.
Oz. Uranium stocks performed reasonably well. Most coal stocks were sold off in line with the oil price, while graphite stocks were mixed.
Vimy (VMY), the old Energy and Minerals, continued its recovery to be one of the better uranium stocks with a rise of A2.5 cents to A45 cents. Paladin (PDN) also gained ground despite reporting more problems at its Malawi mine, adding half-a-cent to A37.5 cents. Other U-moves, either way, included Berkeley (BKY), down half-a-cent to A26 cents, and Toro (TOE) up two-tenths of a cent to A7.2 cents.
Whitehaven (WHC) led the coal retreat, shedding A16 cents to A$1.29. New Hope (NHC) lost A15 cents to A$2.43, while Atrum (ATU) went against the trend with a rise of A8 cents to A$1.16.
Talga, mentioned earlier, was the best in the graphite sector. Other moves included Syrah (SYR), down A13 cents to A$3.06. Magnis (MNS), up half-a-cent to A23 cents, and Valence (VXL), down A7 cents to A48.5 cents.
Minews. The minor metals to close, please.
Oz. Mineral Deposits (MDL), one of the leading titanium sands miners, was a surprise packet last week with a rise of A17 cents to A92 cents. That move was almost matched by another titanium sands miner, MZI (MZI), which put on A10 cents to A35 cents. Other titanium stocks were more subdued with Base (BSE) slipped A1 cent lower to A18 cents.
Rare earth stocks lost ground after China said it was lifting export restrictions. Lynas (LYC) lost A0.8 of a cent to A6.4 cents, and Alkane (ALK) was A2 cents weaker at A21 cents.
Tungsten and tin stocks were mixed. Wolf (WLF) was A1.5 cents weaker at A25 cents, while King Island (KIS) added A1.5 cents to A13.5 cents.
Minews. Thanks Oz.