Silverado Gold Mines Ltd. (fka SLGLF)

[MUSHROOMKING]

For global mining stocks the bear is dead?
The world's 100 hottest mining stocks have bounced by 345% from lows seen around five months ago, completely outpacing any other global equities subsector.

Author: Barry Sergeant
Posted: Friday , 17 Apr 2009

JOHANNESBURG -


In a note to clients on Friday, an Australian resources analyst was forthright: "Forget the bear market; that has been washed out of the system. The rally over the past two weeks has escalated to become a boom in the resource stocks.

"How else can you view the movements of stocks that were absolute dogs a month ago, when they have performed like they have since then? A month ago an advisor told me the private client market was dead. Well, they were famous last words. The private client market is back as a force and the hunger for trading profits is ravenous".

The 100 "hottest" mining stocks have "bounced" from stock price lows, mostly seen during November 2008, by a monumental 345%, on average, measured on a weighted basis. At the same time, it should be pointed out that this selection of stocks is, on average, 65% below highs, seen earlier during 2008.

These numbers appear to indicate both that mining stocks were taken into completely overheated territory during 2008, and, equally, were brutally sold down to way below any kind of "fair" value, however individual investors choose to define that. The world's biggest 100 mining companies, measured by value, have bounced by just over 100%, on average, and lead the world's attempted stock market recovery.

The MSCI Barra dollar world equities index, a very broad benchmark, has advanced by a modest 28% from its recent multi-year lows; the dollar index for emerging market equities has recovered by 45%, so far. Among country stock markets, the Micex Russia shows the sharpest recovery, from an insanely oversold level, followed by the CSI 300, which measures the weighted performance of hundreds of stocks listed in China.

The surge of investment flows into Chinese and Russian listed stocks has also benefited mining stocks; VorkutauGol, a coal miner, has bounced by more than 600% from its lows; JSC Polymetal, a silver-gold miner, by 548%, while Zhaojin, a Chinese gold miner, has advanced by more than 400%. Among the world's 100 biggest mining stocks, there have been strong recent contributions from stocks such as Sichuan Hongda, Shanxi Lu'an, Shanxi Xishan, SDIC Xinji, Jiangxi Copper, Yunnan Copper, and Tongling.

SELECTED INDICES, SPOTS AND GROUPS




From
From


Points
high*
low*

MSCI world equities USD
875.59
-44.1%
28.0%

MSCI emerging markets USD
648.39
-48.2%
45.4%

Dow Jones Industrial
8125.43
-38.1%
25.6%

S+P 500
865.30
-39.9%
29.8%

DJ Stoxx 600
194.68
-41.5%
25.3%

CSI 300
2650.69
-35.0%
65.0%

Shanghai Composite
2503.94
-33.9%
50.4%

Micex Russia
929.80
-52.7%
88.4%

Reuters/Jefferies CRB
225.08
-52.5%
12.5%

Dow Jones AIG Commodity
113.27
-52.5%
11.6%

Baltic Dry Shipping
1604.00
-86.4%
141.9%

Baltic Capesize Shipping
2140.00
-89.1%
157.8%

Dollar Index Spot
85.75
-4.3%
20.5%

Gold spot USD/oz
871.28
-13.4%
27.7%

KBW banks
35.96
-59.4%
102.6%

* 12-month





While there is no question that the shine has moved away from listed gold and silver stocks generally, given the recent strong resurgence of base metal prices, gold and silver names continue to heavily populate the hottest performing mining names list. Stock prices have bounced by at least 600% for Century Mining, La Mancha Resources, Azteca Gold, Australian Solomons, San Anton Resources, and Marum Resources, all within the gold classification.

For months, listed gold (and silver) stocks held up best, supported by the world's best performing commodity, relatively speaking. But the past few weeks has seen distinct profit taking, as investors switched out of gold stocks and into selected miners of base metals. Listed zinc stocks, led by the likes of CBH Resources, with a bounce of 425% from lows, currently show the best bounce from lows among mining subsectors. Copper (led by the likes of Chariot), nickel (Minara Resources and Jien Nickel) and tin stocks (Yunnan Tin) are also outperforming their gold peers at this stage.

STOCK GROUPS
Value
From
From


USD bn
high*
low*

Dow Jones Industrial
2610.62
-40.1%
33.3%

Top 100 global miners
1041.73
-58.2%
103.6%

Oil stocks
2001.95
-48.0%
40.1%

S + P 500 Energy
976.43
-49.1%
31.0%

Zinc stocks
31.15
-55.7%
171.7%

Copper stocks
75.87
-56.6%
162.3%

Gold stocks
228.27
-45.3%
120.0%

100 hottest miners
40.75
-65.2%
345.3%

Gold ETFs
41.66
-18.0%
29.6%

Uranium stocks
19.16
-48.8%
105.7%

Paper stocks (60)
44.39
-55.6%
66.6%

Shipping stocks (32)
29.83
-70.4%
75.5%

World banks (80)
2139.73
-54.9%
77.6%

* 12-month




Source: market data; analysis by Barry Sergeant



Listed oil stocks remain adrift, and while the uranium price remains weak, there has been significant ongoing buying of listed uranium names, as seen in the cases of First Uranium, Niger Uranium, Mega Uranium, and a good number of others. There has also been strong recent interest in selected diamond stocks, from among one of the most damaged mining subsectors of all, as seen in the cases of Kopane Diamonds (with a magnificent 800% bounce from lows), Tsodilo Resources, Pangea Diamondfields, and others.

Lead continues to lead the recovery in metals prices, followed by copper, platinum, and others. Gold prices remain out with a speeding ticket, while aluminium prices remain under pressure from a persistent stubbornness by big producers to fully amend supply to fit new demand dynamics.

METAL PRICES





Industrial, USD/lb
Low*
High*
Current
From low

Copper
1.28
4.06
2.15
67.9%

Aluminium
0.58
1.53
0.67
15.9%

Lead
0.39
1.32
0.68
76.7%

Tin
4.40
11.57
5.24
19.1%

Nickel
4.01
13.70
5.65
40.7%

Zinc
0.47
1.08
0.68
44.2%

Precious, USD/oz





Gold
682.41
1006.29
871.28
27.7%

Platinum
744.25
2225.50
1211.50
62.8%

Palladium
160.75
478.50
234.25
45.7%

Silver
8.46
19.48
12.08
42.8%

* 12-month






The Australian analyst sums it up, for now: "It is amazing how quickly sentiment can turn around. We are now in a market that appears balanced, though maybe somewhat overdone in the short term - but that might just be a corollary to the ridiculous doomsday prices of a couple of months ago. Money is flowing again and the resource stocks will bounce (have bounced) better than industrials. We should be watching for further rises on good economic news, but equally there may be pullbacks on disappointments".



SELECTED TOP 100 "HOTTEST" MINING STOCKS


Ranked on 12-month composite price performance




Stock
From
From
Value


price
high*
low*
USD bn

Century Mining
CAD 0.25
-10.7%
2400.0%
0.035

La Mancha Resources
CAD 0.41
-28.1%
925.0%
0.048

Ivanhoe Australia
AUD 1.50
-26.1%
900.0%
0.338

Azteca Gold
CAD 0.19
-19.6%
825.0%
0.027

Kopane Diamonds
GBP 0.11
-27.4%
800.0%
0.028

Australian Solomons
CAD 0.23
-63.7%
800.0%
0.019

San Anton Resources
CAD 0.26
-60.6%
766.7%
0.023

Marum Resources
CAD 0.19
-11.6%
660.0%
0.016

VorkutauGol
USD 3.01
-61.9%
652.5%
0.030

Tanami Gold
AUD 0.03
-43.3%
580.0%
0.087

Greystar
CAD 3.51
-36.2%
562.3%
0.152

JSC Polymetal
USD 6.48
-29.6%
548.0%
2.041

Aricom
GBP 0.35
-67.2%
578.7%
0.609

Yukon-Nevada Gold
CAD 0.14
-91.3%
600.0%
0.035

Regis Resources
AUD 0.39
-11.4%
519.0%
0.068

NWT Uranium
CAD 0.13
-59.4%
550.0%
0.014

First Uranium
CAD 6.20
-18.5%
507.8%
0.774

Tsodilo Resources
CAD 0.40
-22.5%
507.7%
0.005

Golden Goose
CAD 0.43
-55.3%
507.1%
0.017

African Minerals
GBP 0.56
-71.2%
522.2%
0.155

Novagold
CAD 2.95
-70.5%
521.1%
0.442

Brazauro
CAD 0.58
-35.6%
480.0%
0.041

Shoreham Resources
CAD 0.22
-17.0%
450.0%
0.009

Niger Uranium
GBP 0.21
-19.6%
446.7%
0.017

Mano River
CAD 0.06
-85.5%
500.0%
0.016

Mega Uranium
CAD 2.07
-21.9%
430.8%
0.319

US Gold Corp.
USD 2.05
-31.4%
439.5%
0.165

Keegan Resources
USD 2.02
-60.4%
460.6%
0.057

Centerra
CAD 5.00
-60.8%
455.6%
0.891

Colossus Minerals
CAD 2.30
-42.5%
434.9%
0.104

Pangea Diamondfields
GBP 0.02
-95.8%
486.7%
0.057

Coral Gold
CAD 0.54
-56.8%
440.0%
0.011

Zhaojin
HKD 9.60
-33.1%
416.1%
0.542

Pan Palladium
AUD 0.04
-58.3%
437.5%
0.009

African Queen
CAD 0.30
-25.0%
400.0%
0.009

Anooraq
CAD 1.17
-70.5%
431.8%
0.179

Extract Resources
AUD 3.65
-32.7%
386.7%
0.587

Silverstone
CAD 1.71
-42.0%
395.7%
0.173

CBH Resources
AUD 0.11
-73.8%
425.0%
0.067

Queenston Mining
CAD 3.50
-17.3%
360.5%
0.165

Fresnillo
GBP 4.33
-24.7%
365.9%
4.600

Uranium One
CAD 2.91
-43.8%
385.0%
1.126

Dynasty Metals
CAD 4.85
-27.1%
361.9%
0.142

Kalahari Minerals
GBP 1.14
-10.6%
342.7%
0.302

Chariot
CAD 0.30
-72.5%
400.0%
0.081

Archipelago
GBP 0.10
-64.2%
387.5%
0.044

Guyana Goldfields
CAD 2.89
-56.1%
373.8%
0.140

Paramount Gold
USD 1.03
-50.7%
368.2%
0.064

Aurizon
CAD 5.14
-17.6%
324.8%
0.628

Peregrine Diamonds
CAD 0.66
-19.5%
324.4%
0.044

Bannerman
AUD 1.04
-59.8%
362.2%
0.117

North Atlantic Resources
CAD 0.10
-76.3%
375.0%
0.002

Toledo Mining
GBP 0.37
-79.0%
377.4%
0.016

Homeland Energy
CAD 0.20
-90.5%
387.5%
0.042

Dragon Mining
AUD 0.06
-39.0%
335.7%
0.032

Caledon Resource
GBP 0.34
-78.8%
371.8%
0.104

Oceanagold
AUD 0.70
-70.8%
363.3%
0.081

Imperial Metals
CAD 4.19
-60.1%
350.5%
0.111

Claude Resources
USD 0.53
-51.8%
342.0%
0.051

Augusta Resources
USD 1.81
-74.0%
364.1%
0.160

Boliden
CAD 8.47
-34.8%
323.5%
1.908

Andean
AUD 1.69
-10.1%
297.6%
0.564

Adamus Resources
AUD 0.41
-24.1%
310.0%
0.046

Medusa
AUD 1.60
-12.8%
290.2%
0.192

Sichuan Hongda
CNY 16.39
-54.6%
330.2%
2.476

Catalpa Resources
AUD 0.08
-27.6%
300.0%
0.033

Perseus Mining
AUD 0.83
-46.1%
315.0%
0.118

Mantra Resources
AUD 2.30
-42.5%
310.7%
0.261

Moto Goldmines
CAD 2.71
-45.1%
310.6%
0.196

Gryphon Minerals
AUD 0.25
-51.5%
315.3%
0.020

Uranium Energy
USD 0.71
-79.1%
342.6%
0.033

S American Silver
CAD 0.40
-37.5%
300.0%
0.017

Mercator
CAD 1.31
-89.9%
351.7%
0.117

Northern Dynasty
CAD 7.50
-29.2%
290.6%
0.572

Bumi Resources
USD 0.09
-90.3%
350.0%
1.746

Osisko
CAD 5.22
-14.4%
272.9%
1.097

Nevsun
CAD 1.38
-37.3%
294.3%
0.146

Uralkali
USD 13.76
-83.0%
335.4%
5.846

Anatolia
CAD 2.55
-42.0%
292.3%
0.241

Hunan
HKD 1.61
-53.1%
302.5%
0.339

Ridge
GBP 0.82
-42.9%
290.5%
0.112

Monterrico
GBP 0.98
-62.1%
306.3%
0.038

Iamgold
USD 7.90
-12.2%
255.9%
2.884

Emmerson Resources
AUD 0.16
-46.7%
290.2%
0.023

Pan Australian
AUD 0.34
-72.8%
314.6%
0.432

Allied Nevada
CAD 7.25
-11.5%
251.9%
0.342

Jien Nickel
CNY 26.54
-40.7%
279.1%
1.977

Western Goldfields
CAD 1.90
-41.7%
280.0%
0.212

Braemore
GBP 0.04
-62.8%
300.0%
0.047

US Silver Corp
CAD 0.13
-80.5%
316.7%
0.022

Cline Mining
CAD 0.42
-84.6%
320.0%
0.029

Blue Sky Uranium
CAD 0.12
-69.2%
300.0%
0.004

Searchgold Resources
CAD 0.04
-74.2%
300.0%
0.004

Herald Resources
AUD 0.41
-86.3%
310.0%
0.060

Firestone Energy
AUD 0.04
-47.1%
270.0%
0.035

Ferrexpo
GBP 0.87
-82.0%
304.7%
0.758

Camec
GBP 0.078
-87.6%
307.9%
0.322

Hochschild Mining
GBP 2.37
-44.8%
265.0%
1.080

Lingbao
HKD 2.79
-30.9%
248.8%
0.107

Silvercrest
CAD 0.69
-45.7%
263.2%
0.026

Averages/total

-48.6%
427.9%
40.748

Weighted averages

-65.2%
345.3%


* 12-month





Source: market data; table compiled by Barry Sergeant




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