To set the scene briefly: Monday was murderous for miners. A rout in Asia and renewed bearishness regarding China’s slowing economy served as a double whammy, especially in bulks and base metals.
Spot copper flirted with $2.20/lb and there were eye-popping sell-offs in the world’s biggest miners on all the world’s major exchanges. The sell-off spared no major category: diversified, base metal miner, gold miner – all were slaughtered. Indeed, it didn’t matter what the metal price did on the day.
Taking a look at the 100 worst performances of miners (excluding microcaps) on the NSYE, LSE, TSX and ASX on Monday confirms the view.
The top ten of the losers on Monday were a broad slice of the mining sector.
Glencore – a diversified miner – was down 13%, putting in the worst performance among the largest miners. Gabriel Resources – a gold developer sitting on the controversial Rosia Montana project in Romania – was down 15%.
First Quantum Minerals, the copper miner, had a 13% loss. A slew of gold and silver miners were among the worst losers: McEwen Mining (down 14%), GoGold (14%), Kinross Gold (13%), Centerra Gold down (12%) and Coeur d’Alene Mines (11%).
And this “100 worst” list was not top heavy. The median loser on it – just to give a sense of the distribution here – was down 7.8%. The average was down 8%. The range was -4.3% to -16.4% encompassing all the big names like BHP, Rio, Cameco, Barrick, Goldcorp. So yes, it was a very bad day.
Interesting too, as the sell-off was agnostic.
It punished pretty well any kind of miner regardless of what they mined, where they mined, or who they primarily sold their products too. (Fertilser miners were notably absent.) The sellers were not interested in the fact that the miners have had an awful few years and now trade at, in many cases, near or at historic lows.
The conspicuous presence of the gold miners was perhaps most notable.
For on the day, gold held steady, more or less, and this after a string of gains that has brought at least a smidgen of optimism back to the sector. But the gold companies withered along with the rest anyway. Indeed, they posted among the worst performances – strange, perhaps, given that the sell-off in miners was ostensibly due, in part, to an emerging bearishness on China and largely, a slowdown, in its need for mostly industrial metals like copper. Hence copper flirting with $2.20/lb from closer to $2.30/lb within the day, building on a multi-year decline.
In this respect – for the gold companies – you can reasonably wonder if a rebound is inevitable, at least in the short term. Otherwise put, was there really a good reason to hit down the likes of Barrick or Goldcorp 9% (and you could likely insert any number of other gold mining names here)? If not quite right on the day, Kerry Smith, over at Haywood Securities, was thinking that way. In an email to Mineweb he wrote, “Initially the reaction by everyone is just sell everything, especially when you get the Dow down 1 000 points.
ut after a bit, the smarter ones look at the metal price (up) and start to buy gold stocks. I expect gold shares generally will be up today.”
The rebound was largely absent Monday – so maybe Tuesday?
Indeed, the same argument might be deployed for other metals where the storyline of the day – China’s market meltdown, China’s slowing industrial economy – doesn’t have an obvious direct or heavily bearish effect. Uranium comes to mind.
The top 100 losing miners on Monday included many a uranium name, from developer to miner. Yet it’s hard to argue that any news recently from China negates a growth story, ultimately, of reactors and demand for uranium oxide to, the hope is, tip the balance in favour of the miners. Cameco, the top uranium miner, was down 5%; Paladin, another miner, was down 8%; and NexGen, a leading junior, was down 9%, for some examples.
It will be tempting to take this view more broadly of course and include the big guns like BHP, Rio, Teck, and so on, the many other names among the withering base and bulk miners on Monday. If there is a rebound it may be longer in the coming, however. You wonder, with the fall of base metals still in process and some of the negative views growing on China, if the market will be less willing to flock back to them.
Sure – it seems to me – there’s been over zealous selling of names that otherwise might jump back for strong cash flows.
That as always will be hard to ignore. Ray Goldie noted over the phone that surely the market went too far among the base metal miners Monday. Indeed, he noted that recently China imports of copper and other metals ticked up (June over July), suggesting healthy or at least not falling copper demand. Still, back over at Haywood, Smith advised staying out of the way of base metal miners.
Was there overreaction on the market? Smith answer:, “Nope – copper going to $2/lb I think… so stocks still a bit expensive.”
|Company||Ticker||Change (Aug. 24)|
|1||Aureus Mining Inc||AUE.TO||-16.4%|
|2||Gabriel Resources, Ltd.||GBU.TO||-14.6%|
|3||Mcewen Mining Inc||MUX.TO||-13.9%|
|4||Gogold Resources Inc.||GGD.TO||-13.6%|
|5||Glencore Xstrata Plc||GLEN.L||-13.0%|
|6||First Quantum Minerals Ltd.||FQM.L||-12.7%|
|7||Kinross Gold Corporation||KGC||-12.6%|
|8||Centerra Gold Inc.||CG.TO||-11.9%|
|9||Peabody Energy Corp.||BTU||-11.8%|
|10||Coeur d`Alene Mines Corp.||CDE||-10.8%|
|11||ST Barbara Ltd.||SBM.AX||-10.8%|
|12||Yanzhou Coal Mining Co. Ltd.||YZC||-10.6%|
|14||Yamana Gold, Inc.||YRI.TO||-10.3%|
|15||Denison Mines Corp.||DNN||-10.2%|
|16||Dominion Diamond Corporation||DDC||-10.1%|
|17||Gold Fields Ltd.||GFI||-10.1%|
|18||Endeavour Silver Corp.||EDR.TO||-10.0%|
|19||Anglo American plc||AAL.L||-9.9%|
|20||Compania de Minas Buenaventura SA||BVN||-9.8%|
|21||Endeavour Mining Corporation||EDV.TO||-9.7%|
|22||Sibanye Gold Limited American D||SBGL||-9.6%|
|23||New Gold, Inc.||NGD||-9.5%|
|24||Freeport-McMoRan Copper & Gold Inc.||FCX||-9.4%|
|25||Fortuna Silver Mines Inc.||FVI.TO||-9.3%|
|26||Hecla Mining Co.||HL||-9.3%|
|27||Whitehaven Coal Limited||WHC.AX||-9.3%|
|28||BHP Billiton plc||BLT.L||-9.2%|
|29||Nexgen Energy Ltd||NXE.V||-9.2%|
|30||Torex Gold Resources Inc||TXG.TO||-9.2%|
|31||Barrick Gold Corporation||ABX.TO||-9.0%|
|32||Harmony Gold Mining Co. Ltd.||HMY||-9.0%|
|33||Lundin Mining Corporation||LUN.TO||-9.0%|
|34||Timmins Gold Corp||TMM.TO||-9.0%|
|36||Tahoe Resources Inc.||THO.TO||-8.8%|
|38||Capstone Mining Corp.||CS.TO||-8.6%|
|39||Syrah Resources Limited||SYR.AX||-8.5%|
|41||Metals X Limited||MLX.AX||-8.3%|
|42||Pan American Silver Corp.||PAA.TO||-8.1%|
|43||Silver Wheaton Corp.||SLW.TO||-8.1%|
|44||China Gold International Resources Corp Ltd||CGG.TO||-8.0%|
|45||Eldorado Gold Corp.||ELD.TO||-8.0%|
|46||HudBay Minerals, Inc.||HBM.TO||-8.0%|
|47||Nautilus Minerals Inc.||NUS.TO||-7.9%|
|48||Paladin Energy Ltd||PDN.AX||-7.9%|
|49||Perseus Mining Limited||PRU.AX||-7.9%|
|50||Primero Mining Corp.||PPP||-7.9%|
|51||Alamos Gold Inc.||AGI.TO||-7.7%|
|53||First Majestic Silver Corp.||FR.TO||-7.7%|
|54||Independence Group NL||IGO.AX||-7.6%|
|55||Teck Resources Limited||TCK-B.TO||-7.5%|
|56||NovaGold Resources Inc.||NG.TO||-7.4%|
|57||PH&N US Multi-Style All-Cap Equity Sr C||P.TO||-7.4%|
|58||Sirius Resources NL||SIR.AX||-7.4%|
|59||Royal Gold, Inc.||RGL.TO||-7.3%|
|60||Energy Fuels Inc.||EFR.TO||-7.2%|
|61||Ivanhoe Mines Ltd||IVN.TO||-7.1%|
|62||Asanko Gold Inc.||AKG.TO||-7.0%|
|64||Resolute Mining Limited||RSG.AX||-7.0%|
|65||Newmont Mining Corp.||NEM||-6.9%|
|66||Rio Tinto PLC||RIO.L||-6.9%|
|67||Romarco Minerals Inc.||R.TO||-6.9%|
|68||CONSOL Energy Inc.||CNX||-6.8%|
|69||Imperial Metals Corp.||III.TO||-6.8%|
|70||Suncoke Energy Partners L.P.||SXCP||-6.8%|
|71||Western Areas NL||WSA.AX||-6.8%|
|72||Gem Diamonds Limited||GEMD.L||-6.3%|
|74||Silver Standard Resources Inc.||SSO.TO||-6.2%|
|75||Hochschild Mining PLC||HOC.L||-6.1%|
|76||Mineral Resources Ltd||MIN.AX||-6.0%|
|77||OZ Minerals Limited||OZL.AX||-6.0%|
|78||Katanga Mining Ltd.||KAT.TO||-5.9%|
|80||Asanko Gold Inc||AKG||-5.8%|
|81||Dundee Precious Metals Inc.||DPM.TO||-5.7%|
|82||Aquarius Platinum Limited||AQP.AX||-5.6%|
|83||Natural Resource Partners LP||NRP||-5.6%|
|84||Richmont Mines Inc.||RIC.TO||-5.6%|
|86||Altius Minerals Corp.||ALS.TO||-5.4%|
|88||Seabridge Gold, Inc.||SEA.TO||-5.4%|
|90||Gold Road Resources Limited||GOR.AX||-5.3%|
|92||Iluka Resources Ltd.||ILU.AX||-5.2%|
|93||Lake Shore Gold Corp.||LSG.TO||-5.2%|
|94||New Hope Corporation Limited||NHC.AX||-5.2%|
|95||Rubicon Minerals Corporation||RMX.TO||-5.1%|
|96||Agnico-Eagle Mines Ltd.||AEM.TO||-5.0%|
|97||Pretium Resources Inc.||PVG.TO||-4.6%|
|99||Alacer Gold Corp||ASR.TO||-4.3%|
|100||Turquoise Hill Resources Ltd.||TRQ.TO||-4.3%|