Listed gold and silver stocks may rank as top performing, relatively, in the global resources sector, and likely across all equity sectors, but strong contenders for the thrones can be seen in the form of, particularly, listed copper and uranium names. Listed gold stocks, with a global investible capitalisation of around USD 191bn, have bounced 112% from low prices seen four months ago, but remain 50% off price highs, measured on a globally weighted average. 

Within gold, the strongest relative performances have come from the Tier II grouping, with names such as Centerra, High River, Eldorado and Iamgold really standing out. In silver, the global investible capitalisation for primary producers is a modest USD 10.6bn; the performance of Fresnillo has totally dominated, both as to size with its market value at USD 3.8bn, and its huge stock price performance over the past few months. 

At this stage listed copper stocks have risen by 99% from lows, but remain 68% off highs, leaving the netted performance behind gold and silver stocks. Trends over the past few days show, however, that investors have made heavy switches out of gold and silver names, and into copper names, among other mining subsectors, with uranium favoured next. The global investible market value of “specialist” copper miners is in the order of USD 48.7bn. 

The world’s biggest copper miner, Chile’s Codelco, is unlisted, whilst third to fifth places are filled by diversified miners in the form of BHP Billiton, Xstrata, and Rio Tinto. The No 2 copper miner, Freeport-McMoRan, also ranks as something of a diversified miner, with substantial molybdenum output, in line with a number of copper miners, and also gold, where output of more than one millions ounces a year from Grasberg would, by itself, rank the stock as a Tier I global gold digger. According to Freeport-McMoRan itself, Grasberg “contains the largest recoverable reserves of copper and the largest single gold reserve in the world”. 

Another big name, Southern Copper, kicks out a good quantity of byproduct by way of molybdenum, zinc and precious metals. Antofagasta, an increasingly popular copper name, also operates transport and water divisions, and is a budding gold producer, while KGHM Polska Miedź ranks as the world’s No 2 silver producer, after BHP Billiton. Strongly rising African copperbelt king First Quantum is looking to produce well over 200,000 ounces of gold this year, giving its copper status a new meaning, and Equinox may yet produce uranium at its Lumwana operations in Zambia. 

Somehow, copper prevails. After the world’s two biggest gold deposits, the Witwatersrand Basin and Muruntau (which also contains silver), there are often strong ties between copper and gold among other giant deposits. These are Grasberg (primarily copper, owned by Freeport McMoRan), Olympic Dam (copper, BHP Billiton), Pebble (copper, Northern Dynasty, Anglo American, and Rio Tinto), Natalka (Polyus), Sukhoi Log (Polyus, maybe), Oyu Tolgoi (copper, Ivanhoe Mines, and Rio Tinto), Reko Diq (copper, Barrick), and Lihir. 

After gold, silver and copper stocks, investors have again been showing a good appetite, as mentioned, for uranium names, which have risen by 74% from price lows. The spot uranium price has not been doing much at all; after trading above USD 60/lb during the third quarter of 2008, spot prices fell to just above USD 40/lb, before bouncing above USD 50/lb late in 2008, and then falling back to current levels around USD 43.50/lb. 

The world’s three biggest uranium producers are listed under the names of Cameco, Areva, and Rio Tinto, but the latter two are involved in activities beyond uranium mining. KazAtomProm, TVEL and Navoi rank as the next biggest producers, but are not listed; BHP Billiton of course is; it operates Olympic Dam in Australia, which holds by far the biggest uranium resource in the world. 

Elkonsky Gorsk (Rosnedra) owns the second biggest resource, followed by Imouraren (Areva), McArthur River (Cameco), Inkai (Cameco), Viken (CPM), Streltsovskoye (TVEL), Jabiluka (ERA), and Mynkuduk (KazAtomProm). The net result is that the global investible market value of listed primary uranium names is just over USD 13bn, far closer to the number for silver than for gold. 

In terms of listed uranium stock action, First Uranium, an advanced developer on the brink of production, has produced among the best composite performance over the past year. Uranium One, which also has South African roots, is recovering well from the disastrous, but closed, Dominion mine. ERA has been performing well, just as much as Paladin has disappointed. There has been good price action from a number of stocks with interests in Namibia, assisted by some actual and perceived corporate activity. Some of the better performing names: Bannerman, Forsys (now experiencing a takeover), Extract Resources (where Rio Tinto has taken more than a good sniff) and Kalahari Minerals (which holds 40% of Extract Resources).

GLOBAL LISTED RESOURCES STOCKS

 

Composite weighted 12-month net price gains/losses

 

 

 

Main

Five day

IMC*

Stock

 

 

result

change

USD bn

sample

Tier II gold stocks**

110.0%

-20.4%

39.3

19

Silver stocks

63.9%

-6.1%

10.6

43

Gold stocks

61.7%

-9.1%

190.6

250

Tier I gold stocks**

49.9%

-6.2%

134.4

13

Copper stocks

30.3%

12.8%

48.7

85

Gold ETFs

23.6%

-6.9%

40.7

9

Uranium stocks

17.2%

10.7%

13.1

117

Zinc stocks

13.0%

1.3%

2.9

12

Tier I iron ore stocks**

11.7%

19.9%

71.1

3

Silver ETFs

9.8%

-9.3%

3.5

3

Uranium producer stocks**

5.7%

12.5%

9.6

5

Potash producers

-2.2%

14.5%

70.5

12

Tin stocks

-2.3%

-3.8%

1.8

13

Iron ore stocks

-2.6%

14.9%

110.1

84

Mining majors**

-7.6%

9.9%

485.2

20

Aluminium stocks

-9.4%

15.1%

21.3

12

Molybdenum stocks

-11.4%

1.9%

7.4

20

Oil sand stocks

-23.8%

10.7%

26.8

15

Tier I platinum stocks**

-27.5%

6.0%

20.3

3

Platinum stocks

-28.7%

5.0%

26.2

52

Oil stocks

-30.9%

11.2%

1578.9

47

Tier I coal stocks (non-Asia)**

-31.8%

4.5%

33.9

30

Tier I coal stocks (Asia)**

-32.4%

-2.5%

86.5

20

Coal stocks

-33.0%

0.1%

191.7

122

Tier II iron ore stocks**

-35.2%

6.7%

30.6

16

Nickel stocks

-35.5%

8.9%

20.0

32

Diamond stocks

-61.5%

5.5%

0.7

41

TOTALS

 

20.9%

 

2321.4

957

 

 

 

 

 

 

* Investable market capitalization

 

 

 

 

** IMC counted in other sub-sectors

 

 

 

Sample is 957 listed companies.

 

 

 

Source: Analysis by Barry Sergeant

 

 

 

Note: All samplings are operating companies, with the exception of ETFs

 

Note: the 12-month price gain/loss calculation assumes

 

 

1. A weighted amount of USDs are invested in each of 947 stocks

 

 

2. At the stock’s lowest price in the past 12 months, and

 

 

3. That each stock is still held at the current date.