GOLD STOCKS NEWS – Gold stocks held firm Monday as the Market Vectors Gold Miners ETF (GDX) rose $0.44 to $56.73 per share. The 0.8% rise in the GDX and strength in the gold stocks sector were fueled by a $10.70 advance in gold bullion to $1,554.90 per ounce. Canada’s leading gold stocks composite, the S&P/TSX Global Gold Index, climbed 1.2% alongside the GDX.
Investors moved into gold stocks and the GDX this morning amid growing fears that the European sovereign debt crisis is worsening in Italy, where financial markets were under considerable pressure on Monday. The euro fell 1.3% to 1.4034 against the U.S. dollar as a result, while the gold sector was one of the other few asset classes in positive territory.
In recent weeks gold stocks have begun to outperform the yellow metal, following several months of substantial underperformance. Since the GDX reached an 11-month low of $51.78 on June 16, the gold stocks ETF has climbed 9.6%. Over the same time frame, gold bullion has risen just 1.6%. However, on a year-to-date basis the GDX remains lower by 8.0%, compared to a 9.4% gain for the yellow metal.
Gold stocks in the news Monday included Polyus Gold, the largest gold miner in Russia. The company’s CEO, German Pikhoya, was quoted in the Financial Times as saying that the gold producer is on pace to complete its reverse takeover of UK-listed Kazakhgold by July 25. Pikhoya also stated that the combined company would then consider additional merger and acquisition transactions.
“We are talking about establishing one of the biggest gold mining companies, which basically means we are (looking at merging with) big, big players,” Pikhoya noted.
Russian billionaire Mikhail Prokhorov, Polyus’s co-owner and former CEO, stated in May that the company was seeking an international merger partner for Polyus and was hoping to complete a deal by the end of the year.
However, in June Polyus board member Evygeny Ivanov denied speculation in a Reuters interview that the company was in merger talks with Newmont Mining (NEM), AngloGold Ashanti (AU), or Newcrest Mining (NCM.ASX).
Back in the U.S., notable gold stocks moving higher on Monday included GDX components Barrick Gold (ABX), Agnico-Eagle Mines (AEM), and Goldcorp. ABX, AEM, and GG advanced 0.6%, 1.4%, and 1.6%, respectively.
Claude Resources Confirms Approach to St. Eugene Mining
Claude noted that as the largest shareholder of St. Eugene (with 9.7% of the basic shares outstanding), Claude is disappointed by the strategic direction of St. Eugene evidenced by the recent announcement, and subsequent suspension, of a highly dilutive private placement with Churchill Natural Resource Partners L.P. that would have resulted in loss of control of St. Eugene at a discount to its trading price. Full Claude Resources Press Release.
