Mining Monthly: June Edition
What you need to know:• Following back-to-back positive months and new all-time highs, gold closed down slightly in June, while the gold equities sold off more dramatically.
• Silver fell more sharply than gold (down 9%) following the strong outperformance in May (up 14%), and silver equities followed suit.
• Copper also dropped significantly in June, down 9% to $4.4/lb while the copper equities outperformed the metal slightly, down 7%.
• After two months of several all-time highs for gold and copper and 12-year highs for silver, we believe a month of consolidation like June is warranted and healthy as we continue through this bull market.
Sentiment Update
The metals and mining sector fell sharply in June with all 17 metals in our coverage down except palladium up just 1%. This comes on the back of a handful of positive months, and in our opinion, is a healthy retracement and period of consolidation. Gold was one of the most resilient metals in this sell-off, down just 0.6% in June, while silver and copper were down 9.2% and 8.7% respectively. The gold equities sold off more than the metal with the GDX down 3.8% and the GDXJ down 6.5%. We note the outperformance of the GDX vs. the GDXJ as the larger names are finally attracting stronger hands and being rewarded for consistency. The silver and copper equities sold off significantly alongside their respective metal, with the SIL and COPX down 10.0% and 6.3%, respectively. As expected in a month of consolidation, the mining equities underperformed broader markets with the TSX down 1.9% and the S&P500 up a sizeable 3.4%.
Despite June’s performance, we remain bullish on the metals and mining sector and see this recent sell-off as a buying opportunity, specifically around the silver and copper metals and equities. Gold remains attractive, however, we believe that other metals have more upside when this trend turns around. We remind readers of our commentary in the May Mining Monthly note where we wrote about the continued outperformance and accelerating momentum of the mining sector finally appearing to attract new eyeballs and generalist investors to the space.
Agnico-Eagle Mines is a gold mining company with mining operations in Canada, Mexico and Finland. Co. earns a proportion of its revenues from the production and sale of gold in both dore bar and concentrate form. The remainder of revenue and cash flow is generated by the production and sale of byproduct metals. The revenue from byproduct metals is mainly generated by production at the LaRonde mine in Canada (silver, zinc, copper and lead) and the Pinos Altos mine in Mexico (silver).
B2Gold is a Vancouver-based gold producer with three operating mines (two in Nicaragua and one in the Philippines), a fourth mine which has entered into the commissioning and testing phase in Namibia and a portfolio of development and exploration assets in Mali, Colombia, Burkina Faso and Nicaragua. Co.'s reportable operating segments include its mining operations and development projects. The Other Mineral Properties segment consists of Co.'s interests in mineral properties which are at various stages of exploration. The Corporate and Other segment includes corporate operations and the Bellavista property in Costa Rica which is classified as held for sale.
Tempo Gold is in the exploration stage and is engaged in the acquisition, exploration and development of gold resource properties in Tanzania, East Africa.
Atrium Research provides institutional quality issuer paid research on North American public equities using deep fundamental analysis. Our research reports are disseminated through Bloomberg, FactSet, Capital IQ, Reuters and many more, as well as through our social media and email distribution lists.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.