Author: Kip Keen
Posted: Wednesday , 03 Apr 2013
EXPLORATION
HALIFAX, NS (MINEWEB) -
Walloped.
As the price of precious metals sank Wednesday – gold down 1.4 percent and silver down 1.5 percent at presstime – explorers with sizeable gold and silver deposits and junior gold and/or silver producers took outsized beatings.
“The sentiment is just not there,” said Haywood analyst Stefan Ioannou, speaking to the market hit juniors were taking today.
“Things are already cheap,” he said. And could, by his measure, get cheaper.
“But then there’s no rush to pile back in.”
Ioannou noted that financing continues to be hard to come by, making what were already high risk assets, “super, super high risk”, he said.
“Bank’s aren’t picking up the phones, either,” Ioannou said, making it harder for some would-be mine developers to advance mine developments.
Indeed, 2013 has been an awful year so far for gold juniors and explorers in particular. A typical stock chart ramps down. Today such charts fell off a sizeable ledge.
No scientific poll, here, but a quick perusal of top gold and silver project developers and leading gold and silver juniors on the TSX Venture and the main board told the same story late in the trading day Wednesday.
Take some explorers with multimillion ounce gold deposits: Torex, Pretium and Seabridge. Each were respectively down 12 percent, 9 percent and 5 percent at presstime.
The take some junior gold producers: Detour Gold, Brigus Gold, B2Gold and Osisko. All were down as well, respectively 9 percent, 8 percent, 5 percent and 5 percent at presstime.
It was the same story for larger silver explorers and junior producers.
Meantime the TSX Venture headed to new multi-year lows.
It’s a volatile sector where wide swings are the norm. But today was particularly brutal and reflected a lack of optimism in – and high sensitivity to – the price of gold and silver and the prospects of those companies that need to raise cash to keep projects going.
It didn’t matter where your project was. It didn’t matter how much cash you had in the bank or how nice your gold deposit may be or whether you had arranged financing already or had good prospects of doing so.
All the mattered – for this trading day at least – was to sell, at a discount, anything smelling of precious metals.
