Metals and Mining: Winners & Losers
03/28/11 - 01:36 PM EDT
NEW YORK (TheStreet
) -- Mines Management (MGN)
, Harmony Gold Mining (HMY)
, U.S. Gold (UXG)
and International Coal Group (ICO)
rallied higher, whereas Penn Virginia Resource Partners (PVR)
, Golden Star Resources (GSS)
and Cloud Peak Energy (CLD)
ended the week in red. This compares to a 2.7% increase registered by the S&P 500
Most metal and mining winners last week comprised of precious metal stocks in the U.S. Both gold and silver touched all-time highs last week. Concerns that Portugal may need a bailout coupled with the political turmoil in Libya and events in Japan triggered investment demand for the yellow metal. Gold touched an all-time high of $1,448.60 an ounce on March 23 before closing at $1,430 on March 25. Gold miners, such as Minera Andes
and U.S. Gold, are forecasting gold price at $5,000 per ounce in the next three to four years.
Silver, on the other hand, experienced the longest rally since early December. The white metal touched $38.18 an ounce, the highest since February 1980, before closing at $37.33 on March 25. The metal gained 5.9% during the past week.
Leading the advancers' list at the back of this rally was Mines Management, which gained 21.2% last week. The stock had erased an identical percentage during the week ended March 21. Gold producers Harmony Gold Mining and U.S. Gold accumulated 18.8% and 13.2%, respectively. Last week, Royal Bank of Canada upgraded its rating on Harmony Gold to outperform from sector perform and noted that the company's Papua New Guinea mine could be a takeover target.
International Coal Group gained 10.5% on reports that it may be the most attractive takeover target in the eastern U.S. coal belt. The report said that the acquirer could pay $13 per share, implying a premium of 17% over current levels. Australia-based miner Alumina (AWC)
and U.S.-based gold and silver producer Coeur d'Alene Mines (CDE)
accumulated 9.9% each last week.
Another coal producer, Massey Energy (MEE)
, advanced 9.8% on concerns of a nuclear crisis at Japan's Fukushima Nuclear Power Plant and the safety of nuclear energy. These concerns sparked a rally in alternative energy producers. Walter Energy (WLT)
gained 8.6% during the past week.
Silver producer Silver Wheaton (SLW)
and palladium/platinum miner Stillwater Mining (SWC)
rose 9.8% and 9.7%, respectively. Silver Wheaton reported a 9% increase in its proven and probable reserves in 2010, largely attributable to an increase of 80 million ounces of silver and 23,000 ounces of gold, to a record 954 million silver equivalent ounces.
Other movers among silver producers include MAG Silver (MVG)
, Hecla Mining (HL)
, Silver Standard Resources (SSRI)
and Pan American Silver (PAAS)
, gaining anywhere between 7%-9% during the past week.
Although relatively insignificant, a few miners closed the week in red. While Penn Virginia Resource Partners (PVR)
and Golden Star Resources (GSS)
dropped 1% each, Cloud Peak Energy (CLD)
shed 1.1% last week.