GOLD STOCKS NEWS - Gold stocks were mixed in mid-day trading Friday, with the Market Vectors Gold Miners ETF (GDX) slightly higher, by $0.11 at $50.77 per share. For the past several days the gold stocks sector has followed the path of the broader market considerably moreso than that of the gold price - a rare occurrence this year as gold stocks and the gold price have significantly outperformed the S&P 500. Yesterday the GDX rallied 0.9%, while the price of gold sunk $16.20 to $1,216.26 per ounce. Today has been more of the same, with the gold price climbing $10.40 to $1,226.65 per ounce and the GDX showing a muted response.
Gold stocks in the news Friday included:
Barrick Gold (ABX), which announced that Patrick Garver, EVP and General Counsel, has decided to take early retirement effective July 31, 2010. Vince Borg, EVP Corporate Communications, will be leaving the company effective July 31 as well, but will continue to provide strategic communications counsel. Mr. Borg will be working with Peter Munk, Barrick’s Founder and Chairman, in other business and philanthropic endeavors.
Barrick Gold was also mentioned, along with AngloGold Ashanti (AU) and Kinross Gold (KGC), in a report by Societe Generale and metals consultancy firm GFMS which discussed the continued de-hedging amongst many of the world’s largest gold mining companies. The report stated that gold miners unwound 780,000 ounces worth of forward sales in the first quarter of 2010, which lowered the global gold hedge book to 6.75 million ounces. AngloGold and Kinross were the two largest de-hedgers in the quarter, following Barrick’s 3 million ounces that were bought back during the fourth quarter of 2009. Shares of ABX, and KGC were higher by 0.5% and 0.3%, respectively, while AU fell 0.9% in mid-day trading.
Raymond James raised its target price on shares of Canadian-based gold miner San Gold (SGR.TSXV) from C$4.75 to C$5.20 - 16.1% above yesterday’s closing price of C$4.48 per share. The firm also reiterated its “Outperform” rating on shares of San Gold, following the company’s announcement yesterday that drill results confirmed surface exploration drilling has significantly expanded the vertical dimensions of its 007 zone in both the up and down directions. In mid-day trading San Gold advanced 0.7% to C$4.51 per share.
As for silver stocks, Jeffries initiated coverage of three of the world’s largest silver companies - Coeur d’Alene Mines (CDE), Hecla Mining (HL), and Pan American Silver (PAAS). Coeur d’Alene and Hecla were started with “Buy” ratings, and price targets of $20.00 and $7.00, respectively. Pan American Silver (PAAS) was started with a “Hold” rating and a price target of $28.00. Shares of CDE, HL, and PAAS were higher by 1.5%, 0.2%, and 0.1%, respectively in mid-day trading.
