Monday mad rush for gold stocks

Chicago Board of Trade, circa 1980s. File image.

Swirling speculation about the possible outcome of a special gathering of the US Federal Reserve and chair Janet Yellen’s meeting with the President Barack Obama helped to lift gold to a three-week high on Monday.

Traders in gold futures in New York pushed gold for delivery in June, the most active contract, to above $1,260 an ounce in morning dealings before settling back $1,258 an ounce, up 1.2% or $15 from Friday’s close. Gold hit a 13-month high of $1,274 an ounce March 10 and is up 18.7% in 2016.

Renewed optimism about the outlook for gold saw investors pile back into gold stocks, pushing many stock to 52-week highs in heavy volumes.

After falling to its its lowest since 1989 six months ago, today’s surge brings Barrick’s gains since the start of the year to 121%

Barrick Gold Corp (NYSE:ABX, TSE:ABX), which produced 6.1 million ounces of gold in 2015,  jumped 7.5% with more 20 million shares changing hands in afternoon dealings pushing the shares to 18-month highs.

After falling to its its lowest since 1989 in September, today’s surge brings the world’s top producer of the metal’s gains since the start of the year to 121%. At a market value of $19.92 billion in New York, the Toronto-based company is the most valuable gold mining company in the world.

World number two in terms of production Newmont Mining Corp (NYSE:NEM) climbed 6.5% in afternoon trade, near its highs for the day and the best level since August 2013. Denver-based Newmont, the only gold company that forms part of the S&P500 index, is having a monster 2016, with a 72% rise since the beginning of the year.

While others are disposing of mines, Newmont is building its portfolio and last year acquired the Cripple Creek & Victor gold mine in Colorado. Newmont also has five key projects that are in execution stage including the Turf Vent project in Nevada and Merian mine in South America expected to start production late in 2016.

Goldcorp (TSE:G, NYSE:GG) advanced more than 4% in early morning traded and held onto its gains through the trading day for market capitalization of $15.5 billion in New York. The year-to-date increase for the Vancouver-based firm which recently saw a top management overhauls is 54%. Goldcorp recently lowered its production forecast for to 2.8 – 3.1 million ounces from 2016 to 2018 from about 3.5 million ounces in 2015 driven by production declines at older mines.

Yamana was the 11th most traded counter on the NYSE with volumes of 32 million shares, outpacing the likes of General Electric and Ford Motor

Up 5.5% on the day Agnico Eagle Mines (TSE:AEM, NYSE:AEM) market capitalization rose to $9.1 billion in New York, making it the fifth most valuable gold company. Year-to-date the Toronto company’s stock has gained more than 54% making it on an ounce for ounce basis one of the more expensive stocks in the sector.

The company  recently predicted payable production from its nine mines located in Canada, Finland and Mexico to reach 1.52 – 1.56 million ounces, below previous guidance, and at all-in costs of between $850 – $890 an ounce. Lower output is due to Agnico’s Meadowbank mine in northern Canada deferring ounces into 2017 and 2018 for an extended mine life.

Yamana Gold (TSE:YRI, NYSE:AUY) was the standout performer on the day, soaring 10.5% for a market value of $4.4 billion in New York. The stock was the 11th most traded counter on the NYSE with volumes of 32 million shares, outpacing the likes of General Electric and Ford Motor in a hectic day of trading.

Yamana and Agnico Eagle's Malartic mine in Quebec

Yamana and Agnico Eagle’s Malartic mine in Quebec is one of Canada’s largest

The company produced 1.27 million ounces in 2015 and announced on Monday higher production guidance for this year of 1.26 – 1.33 million ounces, boosted by its recent acquisition of the Riacho Dos Machados gold mine and its joint venture with Agnico, the Malartic mine in Quebec. At full capacity, the Brazilian mine is expected to begin operating at an annualized production rate of nearly 100,000 ounces per year beginning in 2017 according to Yamana.

Toronto’s Kinross Gold (TSE:K, NYSE:KGC) climbed 5.9% in New York. The company recently  lifted its output guidance from mines in Russia for the year to 2.7 – 2.9 million ounces. The stock is worth $6.8 billion in New York after more than doubling in value in 2016 and rising 172% since its multi-year low hit in January.

Fellow Canadian miner Eldorado Gold Corp (TSE:ELD) ran up 7.3%. The miner worth C$3.5 billion in Toronto is up a modest 14.9% since the start of the year as investors struggle to value the company’s mines and projects in troubled Greece.

American Depository Receipts of AngloGold Ashanti (NYSE:AU), the world’s third largest gold producer in terms of output, surged 6.8% for a market value of $6.3 billion on the NYSE. AngloGold Ashanti is up 119% since the start of the year and trading at its highest since September 2014.

ADRs of Gold Fields (NYSE:GFI) added 3.7% while its South African peer Sibanye Gold (NYSE:SBGL) jumped 8.4% higher. 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.

Sibanye is the best performer among the top producers with an astonishing 166% jump this year.

Gold Fields is worth a shade under $3.6 billion in New York while investors lifted Johannesburg-based 1.5m ounces per year Sibanye to $3.5 billion in market value today. Sibanye, which was formed in 2012 after Gold Fields unbundled its three Witwatersrand gold mines, is the best performer among the top producers with an astonishing 166% jump this year.

Australia’s Newcrest Mining Limited (OTCMKTS:NCMGY, ASX:NCM) joined the party, adding 4.9% for a $10.3 billion market cap. Sixth in the output ratings Newcrest is on course to produce 2.4 – 2.6 million ounces in its financial year. 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.

Randgold Resources ADR’s trading on the Nasdaq (LON:RSS, NASDAQ:GOLD) enjoyed a more modest trading day, ending 2.3% higher. The Africa-focused miner with a $9.1 billion valuation is up 55% this year. Production from its mines in West and Central Africa, reached record levels last year at  all-in cash costs of just $600 per ounce.

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