Precious Metals Shares Climb, XAU Eyes Best Week Since October

Friday, January 27, 2012, 12:48pm EST Written by GoldAlert Staff.

Gold and silver shares continued their recent march higher on Friday, as the Philadelphia Gold & Silver Index (XAU) rose 1.7% to 203.36 in early afternoon trading.

With today’s advance, the XAU is now higher by 8.7% this week – putting it on pace for its best such stretch since a 12.5% advance from October 24-28, 2011.

Among gold mining companies, Harmony Gold (HMY) climbed 3.1% to $12.18 per share and Yamana Gold (AUY) rose 3.0% to $17.57 per share. Silver Wheaton (SLW) and Silver Standard Resources (SSRI), two of the most widely-held silver stocks, advanced 3.3% and 5.4%, respectively.

The strength in gold and silver shares was driven by further gains in precious metals. COMEX gold futures – per the February contract – initially slipped below $1,720 per ounce this morning, but later rebounded to $1,732. Silver moved higher by $0.30, or 0.9%, to $33.72 per ounce.

Weakness in the U.S. dollar helped propel gold and silver higher, as the U.S. Dollar Index slid 0.5% to 78.986 against a composite of foreign currencies.

Mines Management Expands into Peru

Mines Management (MGN) announced it has signed a letter of intent (LOI) with Estrella Gold Corp. for an option to acquire up to 75% of the La Estrella gold and silver project. La Estrella is located in central Peru approximately 230 kilometers southeast of Lima and contains approximately 2,500 hectares of land within the Central Peru polymetallic belt. It is also 130 km south of Huancayo in the Department of Huancavelica, a region with a history of silver mining dating to the 1500's.

La Estrella is in an area of established infrastructure, with roads and electricity, and lies within 30 km of Minera Buenaventura's historic Julcani Silver Mine which began operation in 1955. Estrella Gold has established and maintained constructive community agreements with all stakeholder communities, and the property is already fully permitted for additional drilling. Full Mines Manegement Press Release.

HIGHLIGHTS:

The terms of the LOI allow Mines Management through its subsidiary, Minera Montanore Peru, SAC, to earn 75% of the La Estrella project by expending $5 million over four years on exploration activities
The LOI allows MGN to conduct a period of additional exclusive due diligence until March 1, 2012, during which time definitive agreements are expected to be negotiated and executed
La Estrella is an advanced exploration stage project which contains an epithermal, volcanic-hosted gold-silver system with associated base-metal mineralization extending over a strike length of at least 1,200 meters

Glenn Dobbs, President and CEO of Mines Management:

"The La Estrella exploration project represents Mines Management's step into one of the most prolific silver and gold regions in the world. The Project is in a favorable district, and possesses a number of very positive attributes including previous exploration success, and a permitted drilling program which may afford us the ability to move forward expeditiously."

Roth Capital:

Buy rating and $5.00 price target on MGN

Mines Management Interactive News:

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Precious Metals Shares Climb, XAU Eyes Best Week Since October

Mines Management Expands into Peru