GOLD STOCKS NEWS - Gold stocks advanced in spite of the tepid action in the gold price, as the Market Vectors Gold Miners ETF (GDX) climbed $0.62, or 1.4% to $44.33 per share. With today’s rally in gold stocks, the GDX has posted a two-day gain of 3.3%, its best in nearly a month. The rise in gold stocks exceeded that of the gold price, which reached an intra-day high of nearly $1,116 but later retreated to close lower by $0.57 at $1,108.73 per ounce.
One of the largest gainers in the gold stocks sector today was Claude Resources (CGR), whose shares surged 10.7% after completing the sale of a stake in the Amisk Lake Gold Project in Saskatchewan, Canada to St. Eugene Mining (SEM.TSX). The Amisk deal was the second part of a dual-project transaction with St. Eugene that also included the sale of the Tartan Lake Gold mine. Claude holds a 17% stake in St. Eugene’s issued and outstanding common equity shares. Shares of Claude Resources finished the day higher by $0.11 to $1.14.
Late Friday, San Gold released its financial and operating results for the fourth quarter and full year 2009. The Canadian-based gold company, which is focused on gold mining and exploration in the Rice Lake Greenstone Belt, generated record revenue of $27.8 million in 2009 and delivered its second straight quarter of record gold production. Fourth quarter gold production came in at 11,984 ounces, with 97% recoveries achieved at the Rice Lake Mill. The level of gold in process inventory rose to $8.6 million from $4.7 million at December 31, 2008 as a result of greater gold production activity. San Gold shares rallied C$0.06 to C$3.26 on the day.
Canadian-based Alamos Gold (AGI.TSX) reported findings from the base case scenario of a preliminary economic assessment technical report for its 100%-owned Agi Dagi and Kirazli gold projects in northwestern Turkey. Highlights from the report included total gold production of 1.139 million ounces at an average total cash cost of $314 per ounce, with silver treated as a by-product credit. Over the first eight years of production, annual production is expected to average approximately 135,000 ounces of gold and 621,600 ounces of silver, or 145,500 gold-equivalent ounces. At a gold price of $800 per ounce, a silver price of $13.50 per ounce, and a discount rate of 5%, the two projects have a combined after-tax internal rate of return of 18% and a net present value of $134 million. Shares of Alamos closed higher by $C0.09 at C$13.99.
BMO Capital Markets upgraded shares of Franco-Nevada (FNV.TSX) from “Market Perform” to “Outperform.” The firm set a target price for the Canadian-based gold royalty company of C$36.00 - a 32.9% premium to Friday’s closing price of C$27.09 per share. Franco-Nevada shares finished stronger by C$0.35 to C$27.44.
Another standout in the gold stocks sector was Fronteer Development Group (FRG), which rallied 3.4% after the company announced financial results for the fourth quarter and full year 2009. The Vancouver, Canada-based gold explorer earned $0.07 per share for the quarter and $0.14 per share for the year. Fronteer also provided an overview of highlights from the past year, including the sale of their 40% interest in the Agi Dagi and Kirazli gold deposits in Turkey to Alamos Gold (AGI.TSX) for $16.0 million and 1.6 million common shares of Alamos. Shares of Fronteer rose $0.17 to $5.19.
