GOLD STOCKS NEWS - Gold stocks rallied Thursday, with the Market Vectors Gold Miners ETF (GDX) rising $0.56 to $53.41 this afternoon. The S&P/TSX Global Gold Index, a basket of gold stocks in Canada, was higher by 1.2% at 393.05. Gold stocks climbed behind gold bullion, which rose to within 1% of its $1,265 record high.
The advance in the gold stocks ETF extended the GDX’s year-to-date gain to 15.6%, as gold stocks have significantly outperformed the broader market in 2010. One particular gold company that has posted returns surpassing that of the GDX is Colossus Minerals (CSI.TSX), whose shares have climbed 39.8% this year.
This afternoon, Colossus reported that the shareholders of Cooperativa de Mineracao dos Garimpeiros de Serra Pelada (COOMIGASP) approved, by acclamation, the transfer of the mineral rights related to Mining License DNPM Nr. 850.425/1990 from COOMIGASP to Serra Pelada Companhia de Desenvolvimento Mineral (SPC). Colossus holds a 75% interest in SPC by way of Colossus Geologia e Participacoes Ltda, its Brazilian subsidiary. COOMIGASP is the joint venture partner with Colossus in the Serra Pelada Project, a world-class high-grade gold-platinum-palladium deposit in Para State, Brazil.
Commenting on the approval, Ari Sussman, Colossus Minerals’ CEO, stated that it “reaffirms the cooperative’s commitment to developing the project with Colossus. It is an exciting time at Serra Pelada with start of development happening in conjunction with continued drilling of the Central Mineralised Zone extension, the Western Mineralised Zone and target generation on potentially other outlying zones.”
In afternoon trading, shares of CSI.TSX were higher alongside the gold stocks sector, rising 0.2% to C$8.11 per share. The Canadian-based gold company also announced the beginning of development of a 3,500 meter underground decline at Serra Pelada. The decline will provide access for underground exploration and definition drilling and allow extraction of a bulk sample to evaluate the geostatistics of the bonanza-grade zones to facilitate a better understanding of the potential resource. The decline, which Colossus expects to cost C$15 million and take 12-18 months to complete, will also provide access for eventual underground production.
Colossus did note that underground drilling will begin in early 2011, substantially ahead of the completion of the decline. The company further reported the start of earthworks on other site infrastructure - including a future plant site, camp site, maintenance facilities, offices, and the tailings impoundment and has already completed earthworks for the underground portal and upgrades to the road into Serra Pelada.
Other notable advancers in the gold stocks sector Thursday included Agnico-Eagle Mines (AEM), Goldcorp (GG), and Kinross Gold (KGC). In afternoon trading shares of AEM, GG, and KGC were higher by 1.0%, 0.5%, and 0.9%, respectively.
