World's hottest mining stocks

Amid power buying, trends and patterns from the 100 most popular listed mining names.

JOHANNESBURG - 

Stock markets are flying just about everywhere; the MSCI world equities USD index is trading at 12-month highs, along with the MSCI emerging markets USD, as are the Dow Jones Industrial, S+P 500, and DJ Stoxx 600; some markets are lagging a little, as seen in China's CSI 300, and given general buoyancy there has been some profit-taking as seen in Russia's Micex Russia and the India Nifty.

Most equities subsectors are also doing very well; in general, buying has the air of indiscrimination about it, with value-seeking discernible at the margin. Any kind of positive sign or story, and chances are that a stock dressed in the fashions of the moment will fly. A year ago, of course, the world was cluttered to paralysis with almost universal predictions that the world would end under the weight of a Great Depression of fatal proportions.

So much for that; fast forward to today, and global mining stocks are cruising at healthy heights. The world's 100 most in-demand mining stocks are trading, on a weighted average, at less than 3% below 12-month highs. To a lesser extent as each month goes by, since troughs seen generally late in 2008, buying of mining stocks has become less discriminate relative to idiosyncratic underlying fundamentals.

Dollar commodity metal prices, with the exception of gold bullion, suffered markedly during the so-called global credit markets crisis. This has provided leeway for remarkable recoveries from lows; zinc, lead, copper and palladium have risen more than 100% from dollar troughs. Tin, a small market, has experienced the smallest "bounce", followed by aluminum, which continues to suffer from poor supply-demand fundamentals, followed by gold bullion, which fell the least. Silver bullion has risen just short of 100% from the bottom.

Silver stocks are some kind of a rage, in the positive sense. London-listed Fresnillo, the world's biggest primary silver digger, all of it in Mexico, has registered a price increase of nearly 900% in its stock price. Further specialised silver miners experiencing significant demand include S. Métallurgique d'Imiter, Silvercorp, JSC Polymetal, Silver Wheaton (a royalties entity), and Hecla Mining; even Cobar, something of an odd man out in Australia, is roaring along.

Among gold stocks, recent buying trends have tended to "revert to the mean", with stronger demand for standard bearers and increasing profit taking among juniors. There has been solid buying of Newmont and Barrick, which among gold majors produced the most encouraging of recent third-quarter cash flow and operating reports. Further global Tier I gold diggers in firm demand include Polyus, Goldcorp, Gold Fields, and Yamana, which published relatively unimpressive third quarter numbers.

Tier II gold names have also experienced good buying demand, as seen in pricing for Randgold Resources, Eldorado, Iamgold, Shandong Gold, Red Back, Eldorado and Petropavlovsk, now a diversified miner. Among the many listed smaller gold stocks, some very small, there have been good recent showings from the likes of Lucara, Peninsular Gold, Guyana Goldfields, Castle Gold, Avocet Mining, Sino Gold, and Royal Gold.

Profit taking has been seen among names such as Ventana Gold, which currently stands nearly thirty thousand percent above its price of a year ago, holding a current market value of USD 1bn. Among platinum stocks, demand remains subdued, with the exception of the thinly-traded Zimplats.

Beyond precious metals, there is excellent demand for diversified standard-bearers BHP Billiton, Vale, Rio Tinto, Anglo American, Xstrata; Teck and Oz Minerals, previously left for dead, are back with something of a vengeance.  

Demand for the world's biggest copper stocks continues unabated, featuring Freeport-McMoRan, Southern Copper, Antofagasta, KGHM Polska Miedź, Sterlite, and First Quantum, along with a good number of smaller names such as Philex, Pan Australian, Palamin, Taseko, and Citadel Resource.

Coal stocks outside China have risen in popularity in the past few months, suggesting that investors are increasingly ready to take on greater risk, and to look for greater recoveries, percentage-wise, in stock prices than may be available from more "stable" subsectors such as gold equities. Coal names currently in the spotlight include Raspadskaya, Peabody Energy, Felix Resources, Whitehaven Coal, Southgobi, Massey Energy, Mongolia Energy, Adaro Energy, and Banpu.

There is similarly good demand for iron ore stocks, especially towards the smaller end of the market capitalisation league: Iron Ore Holdings, Gippsland, African Minerals, Mount Gibson Iron, Aquila, and United Minerals.

Demand for uranium stocks remains relatively restrained, Niger Uranium can be mentioned, but for now at least, the excitement in and around Extract Resources has apparently gone on holiday. With the only real exception of Norilsk, investors remain cautious around nickel and related stocks. There is more positive interest in stocks associated with zinc, such as Hunan, Inmet, Oz Minerals, Griffin Mining, and Hudbay Minerals.

Investors are also indicating that convincing recovery is in sight for potash stocks, as seen particularly in the pricing for ICL, Silvinit, Sociedad Química, and Compass Minerals. Specialist molybdenum stocks such as Jinduicheng and Thompson Creek remain generally out of favour, along with tin stocks such as Yunnan Tin and Timah TBK PT. Interest in aluminium stocks is highly mixed, with solid demand for the likes of Kaiser Aluminium and National Aluminium standing in strong contrast to the relative indifference shown to the likes of Chalco, although Alcoa looks as if it may finally be on some kind of a comeback trail.

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MINEWEB is an interactive publication, with rolling deadlines through each day, commencing in the Sydney morning,  and concluding, 24 hours later,  in the Vancouver evening.  If you believe your side of an issue deserves inclusion, but has failed to meet one of our deadlines, you are invited to notify the Editor in Chief in Johannesburg, and we will include you in our editing and expanding on our stories. Email him at alechogg@gmail.com

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responses to this article

100 gold stocks Where is Harmony mining? by carl on November 12 2009, 17:55 Find this comment inappropriate? Report it

Carl Well ...it couldn't be that Minweb is not as uncompromisingly independent as all that could it? by Simon on November 13 2009, 03:27 Find this comment inappropriate? Report it

GOLD MINING STOCKS WHERE ON YOUR LIST IS NORTHERN DYNASTYMINERALS? by GENE SAUNDERS on November 13 2009, 12:53 Find this comment inappropriate? Report it

SIERRA GOLD CORP. SGCP PLEASE CHECK CHECK OUT ABOVE STOCK AND LET ME KNOW WHAT YOU THINK ABOUT IT. THANKS!!---jenkins_r@bellsouth.net by RICHARD JENKINS on November 13 2009, 15:35 Find this comment inappropriate? Report it

Lakeshore Gold LSG.TO I'm amazed not to see this one on the top 100, let alone the top 10! by mike on November 16 2009, 00:28 Find this comment inappropriate? Report it

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