Gold Breached $1,900 For The First Time Since 2011
The moment that many have waited for came on July 24th. The price of gold broke above $1,900 for the first time since 2011. This historic move came as international tensions heated up between China and the United States.
On Friday, China ordered the United States to shut its consulate in the city of Chengdu. In a “you started it” move, China’s directive is a retaliatory show of power following the U.S. order closing China’s diplomatic post in Houston.
“The measure taken by China is a legitimate and necessary response to the unjustified act by the United States,” China’s Foreign Ministry said in a statement. “The current situation in Chinese-U.S. relations is not what China desires to see. The United States is responsible for all this. We once again urge the United States to immediately retract its wrong decision and create necessary conditions for bringing the bilateral relationship back on track.”
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In the stock market today, tech stocks were shelled during the early morning session. Intel lead the drop on concerns over its new chip. Specifically, the company said that its next generation of chips would be delayed and that it may seek a third-party manufacturer to make them. The sell-off buoyed by lunch but appeared to strengthen into the afternoon session. Meanwhile, the gold sector continued surging throughout the bulk of the session. Though gold prices consolidated from their $1,904 high of the day, mining and gold stocks didn’t stutter much at all.
Yamana Gold Stock Continues Shining
Shares of Yamana Gold stock (AUY Stock Report) continue their shine this week. The Gold producer saw AUY stock price reach new 52 week highs on Friday. Clocking in at $6.18 just as the afternoon session began, Yamana set a new 5-year high. The gold stock hasn’t traded above $6.17 since September of 2014.
At the end of Q2, Yamana Gold has more than $320 million in cash, while its net debt decreased by $100 million to less than $769 million, according to a news release. The company also said it expects to have its shares listed on the main market of the London Stock Exchange in the next few months.
Yamana announced its Q2 earnings results yesterday, after market close. For starters, the company announced it is increasing its annual dividend by a further 12% to $0.07 per share. From its earnings, adjusted net earnings of $63.3 million or $0.07 per share basic and diluted. That’s compared to adjusted net earnings of $19.8 million or $0.02 per share basic and diluted a year earlier. Net earnings were nil or nil per share basic and diluted compared to net earnings of $14.1 million or $0.01 per share basic and diluted a year earlier.
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Gold production came in at 164,141 ounces and was above plan, following strong performances from Jacobina, El Peñón, Minera Florida, and Canadian Malartic. All exceeded their production plan. Silver production came in at 2,007,809 ounces and was also above plan. That was following a strong performance from El Peñón. Gold equivalent ounce – GEO – production of 183,582 ounces exceeded plan. It was also at costs better than plan, despite the GEO ratio being higher at 105.14 than that guided at 98.85 according to Yamana.
Taseko Mines Hits New Milestones
Shares of Taseko Mines (TGB Stock Report) also saw new milestones reached on July 24. Shares of TGB stock hit a new 52-week high of $0.82. It was also one of its heaviest trading volume days in at least a year. The company operates the Gibraltar Mine. This is the second-largest copper mine in Canada according to the company. There’s a nearly 700 person workforce in place. It’s producing an average of 140 million pounds of copper and 2.5 million pounds of molybdenum per year. In a recent operational performance update, the company highlighted stronger performance earlier this year.
“Production guidance for 2020 remains unchanged at 130 million pounds (+/-5%) with the expectation of being at the higher end of the range after the strong first five months of the year. With the current price of copper at roughly US$2.50 per pound, the highest price since its rapid decline in mid-March, coupled with the weak Canadian dollar and Gibraltar ‘s low cost structure, we are generating a healthy operating margin,” said Russell Hallbauer, CEO of Taseko.
“Discussions regarding a joint venture with interested parties are ongoing and we are about to resume more in depth discussions with banks and other potential lenders regarding project financing,” concluded Mr. Hallbauer. Can TGB stock continue this trend?
Harmony Gold Stock Hits Another, New 52-Week High
After a new 52-week high during the first half of the week, Harmony Gold stock (HMY Stock Report) did it again. Shares of HMY stock came within 3 cents of hitting $7 during the early morning session. Harmony is a gold mining and exploration company having operations in South Africa and Papua New Guinea. Its projects include Bambanani, Joel, Masimong, Phakisa, Target 1, Tshepong, Unisel, Doornkop, and Kusasalethu.
The group’s segments are Tshepong Operations, Bambanani, Joel, Doornkop, Moab Khotsong, Hidden Valley, Target 1, Kusasalethu, Masimong, Unisel, and all other surface operations.
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The only big news that has come out recently is with regard to a capital raise. Harmony Gold Mining announced on June 24th that it plans to raise $200 million. However, it may be the use of funds that has brought some solace to investors. Harmony said it aims to use the money to finance its South African asset purchases. Earlier this year the company signed an agreement to buy up AngloGold Ashanti’s Mponeng and Mine Waste Solutions.
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