Gold Miner Pulse 2019 half year update
The focus of this blog article is on the gold and silver miners from a tactical point of view: how do PM miners perform relative to the price of gold or silver.
The blog article is monitoring whether trends are persisting. Therefore the graphs posted here are showing daily observations both over one year and with a 6 months time horizon. For the long term reference frame, see the articles referenced at the bottom.
Gold was last breaking above $1300 only by May 31st. The yellow metal rapidly breached the $1360 four-year old resistance and broke above $1400 on June 21. On June 25 the Comex close at $1423 marks the current rally top. Gold is consolidating above $1400 to end the first half of 2019 at $1408.9. The initial rally again spurred enthusiasm for the miners, however sentiment soon turned quite meek. Only gold breaking above its 4 year trading range was lifting the HUI/Gold ratio breaking its late March high.
Unhedged Gold Miners index HUI relative to gold bullion (spot market). Daily observations over 6 months - Click to enlarge |
How we got there:
Persevering weakness of the gold price, plunging below $1200 by mid August, wore out miner optimism. Technicians didn’t enjoy the inverted head & shoulders pattern very long. Late October, miners plunged, despite precious metals keeping firm.
Gold rallying to $1247 early December made miners advance substantially. Though the trend quickly reversed upon little gold weakness. The on-off game continued into 2019 with the HUI/Gold ratio unable to lock in a meaningful advance.
By January 25 gold broke above $1300 which made HUI/Gold regain its 50 dma and gold firming to $1320 by end Jan 2019 ultimately caused HUI/Gold to reach its declining 200 dma. The Chinese new year rally lifted HUI/Gold above its 200 dma. It seems ages ago we last enjoyed this situation. While gold kept flirting with the $1300 price tag, HUI/Gold was trending higher. Thereafter everything was on the brink again. A recovery started off on May 31st with gold rallying.
The HUI/Gold regression (previously also called ‘bear market logic’): a linear but non-proportional relationship between HUI and Gold puts HUI/Gold (or for that purpose Gold/XAU) as valuation parameter in a different perspective. The HUI index has been calculated since 1996.
Global-X Silver Miners ETF, SIL relative to silver bullion; Daily observations over 6 months. Click to enlarge |
How we got there:
The last longer term review has been posted end December 2018: Precious metals mining in 2018: a dark cloud with a silver lining & 2019 outlook .
In the first half year of 2018, silver miners reacted adversely to the silver price trend. Initially silver miners had shown some resilience despite metal weakness. Yet they didn’t benefit from the early October silver recovery either. With the metal lingering on below $15/Oz, silver miners lost their edge. The mid December advance is mainly reflected the rally of streamer Wheaton Precious Metals. The SIL/Silver ratio turned south again, though silver broke above $15/oz.
Canadian Gold and Silver Mining indices
How gold miners are performing is shown by the capitalization weighed gold miners index of stocks included in the Gold Miner Pulse database (yellow diamond symbols). Note that most quotes are in CAD, which has been fluctuating to the USD. The blue graph shows the GMP silver miners index. It has been losing its edge lately.The long term depreciation of the loonie mitigated the miner loss during gold miner bear market.
GMP list based (and capitalisation weighed) gold (yellow dots), silver (blue) and equal weight (red) miners indices. Reference 1000 on Nov 19, 2010 (click to enlarge) |
The third index added uses equal initial weights of all (silver and gold) miners from the GMP database. Because of its simple weighting scheme, comparing this index to the capitalization weighted indices gives a fair idea of how junior miners and explorers fare as compared to the large miners.
How we got so deep into trouble is best illustrated when showing a long term graph of those capitalization weighted miners indices. The revival after late Jan 2016 healed the last leg down of the miner bear market. We briefly topped the May 2013-Oct 2014 trading range.
The silver miners index rose till 1400 in April 2011, peaking three weeks earlier than did the silver price. The silver miners index also posted a higher maximum during both the March 2014 and June to early August recovery than it did in the August 2013 recovery. The gold miners index and the equal weight index did not peak higher at any of the failing 2014-15 recoveries than they did in August 2013. By January 2016 silver miners nearly completely lost their edge relative to gold miners, yet the recovery proved more vigorous. The below long term graph covers over three years: the end of the bear market with miners bottoming by Dec 2015, the 2016 boom-bust over the tedious months early 2018, with miners unable to match gold strengthening. Miner quotes were jittery after gold plunged below $1200. Towards end 2018 gold strengthened to $1280 with miners recovering timidly.
Performance graph
|
There are 11 miners/explorers losing 90% or more, with 4 thereof down over 95%. At the opposite side only 14 miners are quoting above their Nov 2010 mark, led by Kirkland Lake; 7 stocks have doubled. These top 7 miners are omitted in the above graph to avoid scale expansion, but you find the top-10 in full detail below:
GMP elite miners, sorted by gain since starting observations in Nov 2010 using a logarithmic view with minor ticks 10% apart in the bottom decade and 100% apart in the next decade - Click to enlarge |
Related blog articlesSeveral more detailed articles focusing on the longer term have been published. These are using the same approach as this blog page and still are a good read to grasp the historic perspective:
- Miners relative to precious metals: a tactical approach; (July 2, 2012)
- Miners relative to precious metals: An update on 2012; (Jan 13, 2013)
- Anatomy of a gold miner bear market (Dec 30, 2013)
- Three year slide of precious metal miners (Dec 31, 2014)
- Gold miner bear market starting its fifth year (Jan 3, 2016)
- Precious metal miners relative to metal prices (Dec 31, 2016)
During 2011-15 and even over the long haul, the relative performance of mining majors to the precious metals they produce was disappointing for major gold miners, even while the metals were in a solid uptrend. See: Gold miners: three decades for naught or Decades of underperformance
Remarkably, during the gold miner bear market and it subsequent recoveries till summer 2017 the HUI – gold relationship followed a linear regression. Thereby the HUI slides dis-proportionally during any gold decline, but also shows the expected leverage at a gold advance. See for example:
Linear Regression between the Gold Price and the HUI miners index (April 2017)
In 2018 it became obvious that the HUI once more started lagging this observed relationship.
While these blog articles had a time perspective covering years or decades, the present blog page is monitoring whether the trends observed are persisting. Therefore the graphs posted here are showing daily observations year-to-date or with a 6 months time horizon.
The ‘gold miner pulse‘ page provides a fundamental view of how miners are valued in relation to precious metals. Indexes are calculated on miners of the gold miner pulse database and a performance dispersion graph gives a fair idea on how differently those miners performed. This Miners’ Performance page indicates the individual performance of all miners in the GMP database.
Reference date
Bear market damage
Today’s statistics
Since previous evaluation on Jun 14, 2019 the median added 1.68% while the average sweetened by 3.73%.
Advances (69 miners) led declines (18) on consecutive evaluations. The remainder of the set of miners (7) quotes almost flat: within a narrow +1% range.
Exchange rate
Latest / Expected list changes
Graphs section
Elite miners on a log axis (10% increments on the first decade and 100% increments on the second) |
Top quintile: the best 20% of miners |
Subtop: the average decline is amid this quintile |
|
Laggards quintile |
Investors nightmare: a majority of these miners & explorers is down over 90%. |
For your information: below is the top quintile graph of Jun 14.
Top quintile: the best 20% of miners |
Comments and composition changes since 2018:
- Alio Gold (ALO) replaces Rye Patch Gold (RPM) upon a business combination of both. ALO ‘inherits’ the track record of RPM.
- Primero has been delisted after its acquisition by First Majestic.
- Klondex was acquired by Hecla Mining. Coverage is discontinued and Klondex has been delisted.
- After a friendly take-over bid of the Australian South32 miner on Arizona Mining (AZ), this top performer eventually left the selection.
- We introduced Gold Standard Ventures (GSV) to our list in replacement of AZ mining.
- After the bankruptcy of Red Eagle Mining (R), Teranga Gold Corporation (TGZ) was added in replacement.
- Upon the merger of Barrick and Randgold, the more appealing Randgold ticker GOLD was maintained, whereas the merged mining company is called Barrick. The ticker ABX is removed and the reference share price is divided by the 6.128 Randgold share exchange value. Randgold shareholders thereby obtain 33% of the new Barrick.
- Nighthawk (NH.TO) has been added to the list.
- Atlanta Gold (ATG), TVI Pacific (TVI) and CMC metals (CMB), Black Dragon Gold (BDG.V), Lincoln Mining Corp (LMG) and Miranda Gold (MAD) were dropped from the list. These explorers don’t quote daily any longer. They have become hard to trade as market cap dwindled to a few million CAD.
- Subsequently also Black Dragon Gold (BDG), Lincoln Mining Group (LMG), Eco Oro Min (EON) and Golden Queen Min (GQM) were dropped in March 2019.
- Tahoe Resources was acquired by Pan American Silver (PAAS) as of Feb 22, 2019
- Several replacements have been added to the list after mergers and de-listings. Those are Golden Arrow Gold (GRG) on the Toronto venture exchange, Alacer Gold (ASR), Belo Sun Mining (BSX), Marathon Gold (MOZ), Midas Gold (MAX) and Roxgold (ROXG) on TSX. Newmont (NEM) – NYSE in USD were also added. Subsequent additions were ASA Gold & Precious Metals (ASA), Evrim Resources (EVM) and Victoria Gold (VIT)
- Newmont (NEM) has completed the acquisition of Goldcorp (G on TSX and GG on US markets)
- A few name changes:
- Novacopper (NCQ) now is called Trilogy metals (TMQ)
- Astur Gold (AST) changed to Black Dragon Gold (BDG)
- Pilot Gold (PLG) changed to Liberty Gold (LGD)
- Silver Wheaton (SLW) changed its name to Wheaton Precious Metals (WPM)
- Silver Standard Resources changed to SSR Mining with ticker SSRM
- And ticker changes:
- Kirkland Lake Gold (KGI) changed its TSX ticker to KL
- Red Eagle Gold changed over to the main market. Its TSX ticker now is R.
- Pan American Silver changed its TSX ticker to PAAS (in line with that on US markets)
- Golden Minerals changed its TSX ticker to AUMN (also in line with that on US markets)
Former mining or exploration company
|
TSX ticker
|
Date
|
Merging or acquiring miner or explorer / Delisted(red)
or follow up suspended (dark red) |
Capital Gold Corp.
|
CGC
|
8/04/2011
|
Acquired by Gammon
|
Fronteer Gold Inc.
|
FRG
|
8/04/2011
|
Acquired by Newmont
|
Richfield Ventures
|
RVC
|
1/06/2011
|
Acquired by NewGold
|
ECU Silver Mining Inc.
|
ECU
|
8/10/2011
|
Acquired by Golden Minerals Cy.
|
Century Mining Corporation
|
CMM
|
14/10/2011
|
Merged with White Tiger Res.
|
Trade Winds Ventures Inc.
|
TWD
|
30/11/2011
|
Acquired by Detour Gold
|
Silvermex Resources Inc.
|
SLX
|
29/06/2012
|
Acquired by First Majestic
|
Trelawney Mining and Exploration
|
TRR
|
22/06/2012
|
Acquired by Iamgold
|
Extorre Gold Mines Limited
|
XG
|
24/08/2012
|
Acquired by Yamana
|
Great Basin Gold
|
GBG
|
19/09/2012
|
Delisted upon bankruptcy
|
Queenston Mining Inc
|
QMI
|
29/11/2012
|
Acquired by Osisko
|
High River Gold Mines Ltd.
|
HRG
|
14/03/2013
|
Merger with Nord Gold
|
Orko Silver Corp.
|
OK
|
15/04/2013
|
Acquired by Coeur d’Alène
|
Esperanza Silver Corporation
|
EPZ
|
30/08/2013
|
Acquired by Alamos Gold
|
Plato Gold Corp.
|
PGC
|
31/07/2013
|
Sold its Quebec gold resource to Monarques
|
Pacific Rim Mining Corp.
|
PMU
|
29/11/2013
|
Acquired by OceanaGold
|
American Bonanza Gold Corp.
|
BZA
|
7/07/2014
|
Acquired by Kerr Minerals, which will been absorbed by San Gold
|
Osisko Mining Corporation
|
OSK
|
16/06/2014
|
Acquired by Agnico Eagle and Yamana
|
San Gold Corporation
|
SGR
|
22/12/2014
|
Delisted after not meeting TSX requirements
|
U.S. Silver Corporation
|
USA
|
31/12/2014
|
Taken over by Scorpio Mining (SPM.TO)
|
Rio Alto Mining Limited
|
RIO
|
7/04/2015
|
Taken over by Tahoe Res.
|
Paramount Gold and Silver Corp.
|
PZG
|
17/04/2015
|
Taken over by Coeur d’Alène
|
AuRico Gold Inc. (Formerly Gammon)
|
AUQ
|
3/07/2015
|
Merger with Alamos Gold
|
Revett Minerals Inc.
|
RVM
|
17/06/2015
|
Taken over by Hecla Silver
|
Tyhee Development Corp.
|
TDC
|
3/06/2015
|
Delisted after not meeting TSX requirements
|
Sunward Resources
|
SWD
|
19/06/2015
|
Acquired by NovaCopper
|
Crocodile Gold Corp.
|
CRK
|
13/07/2015
|
Merged with Newmarket Gold (new ticker: NGI)
|
SilverCrest Mines Inc.
|
SVL
|
7/10/2015
|
Acquired by First Majestic Silver
|
Temex Resources Corp.
|
TME
|
21/09/2015
|
Acquired by Lake Shore Gold
|
Arian Silver Corporation
|
AGQ
|
1/12/2015
|
Delisted (only London and pink sheets)
|
Niogold Mining Corp.
|
NOX
|
10/03/2016
|
Acquired by OBAN Mining Corp / Osisko 2.0
|
Lake Shore Gold
|
LSG
|
7/04/2016
|
Acquired by Tahoe Resources
|
Claude Resources Inc.
|
CRJ
|
26/05/2016
|
Acquired by Silver Standard
|
AM Gold Inc.
|
AMG
|
26/08/2016
|
Sold its exploration/development target
|
Mines Management Inc.
|
MGT
|
13/09/2016
|
Acquired by Hecla mines
|
Rubicon Minerals Corporation
|
RMX
|
19/10/2016
|
Delisted after reducing gold reserves
|
Agave Silver Ltd (Cream Minerals)
|
AGV
|
19/12/2016
|
Sold its mineral rights in Mexico
|
Kiska Metals Corporation
|
KSK
|
7/03/2017
|
Acquired by Aurico Metals
|
Mariana Resources
|
MARL
|
23/06/2017
|
Acquired by Sandstorm
|
Crazy Horse Resources Inc.
|
CZH
|
6/06/2017
|
Renamed to Rockwealth Resources and 10:1 consolidation
|
Integra Gold
|
ICG
|
17/07/2017
|
Acquired by Eldorado Gold
|
Exeter Resource Corp.
|
XRC
|
8/08/2017
|
Acquired by Goldcorp
|
Primero Mining Corp.
|
P
|
11/05/2018
|
Acquired by by First Majestic Mining, sold its Canadian mine to McEwen Mining
|
Klondex Mines Ltd.
|
KDX
|
19/06/2018
|
Acquired by Hecla Mining
|
Rye Patch Gold Corp.
|
RPM
|
30/05/2018
|
Business combination with Alio Gold
|
Arizona Mining
|
AZ
|
10/08/2018
|
Friendly Acquired by South32
|
Red Eagle Mining Corp.
|
R
|
9/11/2018
|
Defaulted after guarantee for restructuring financing failed
|
Barrick Gold
|
ABX
|
2/01/2019
|
Merger with Randgold to form new Barrick; ticker GOLD
|
Randgold
|
GOLD
|
2/01/2019
|
Merger with Barrick; ticker maintained
|
The majority of the Canadian ticker symbols quote at the TSX. A few quote at the TSXV (the less regulated Venture exchange). These companies are intrinsically more risky, especially if a miner or explorer gets demoted from TSX to TSXV. One such example is TVI Pacific.
Quote
|
Name
|
Quote
|
Name
|
AEM
|
Agnico-Eagle Mines Limited
|
K
|
Kinross Gold Corporation
|
AGI
|
Alamos Gold Inc
|
KL
|
Kirkland Lake Gold
|
AKG
|
Asanko Gold
|
LGD
|
Liberty Gold Inc (Pilot Gold)
|
ALO
|
Alio Gold
|
LME
|
Laurion Mineral Exploration
|
AMM
|
Almaden Minerals Ltd.
|
LYD
|
Lydian International Limited
|
AR
|
Argonaut Gold
|
MAG
|
MAG Silver Corp.
|
ASA
|
ASA Gold & Precious Metals
|
MAX
|
Midas Gold Corp.
|
ASM
|
Avino Silver & Gold Mines Ltd.
|
MOZ
|
Marathon Gold Corp.
|
ASR
|
Alacer Gold Corp.
|
MQR
|
Monarques Resources
|
AUG
|
Auryn Resources
|
MRZ
|
Mirasol Resources
|
AUMN
|
Golden Minerals Company
|
MSV
|
Minco Silver Corporation
|
AXR
|
Alexco Resource Corp.
|
MTB
|
Mountain Boy Minerals Ltd.
|
AZX
|
Alexandria Minerals Corp.
|
MUX
|
McEwen Mining Inc.
|
BCM
|
Bear Creek Mining Corporation
|
NDM
|
Northern Dynasty Minerals Ltd.
|
BSX
|
Belo Sun Mining Corp.
|
NEM
|
Newmont Mining
|
BTG
|
B2 Gold
|
NG
|
NovaGold Resources Inc.
|
CDB
|
Cordoba Minerals
|
NGD
|
New Gold Inc.
|
CDE
|
Coeur d’Alene Mines Corp.
|
NGQ
|
NGEx Resources Inc.
|
CG
|
Centerra gold
|
NHK
|
Nighthawk Gold Corp.
|
CKG
|
Chesapeake Gold Corp.
|
OSK
|
Osisko Mining Inc.
|
CUU
|
Copper Fox Metals Inc
|
OGC
|
Oceana Gold
|
DGC
|
Detour Gold Corporation
|
OR
|
Osisko Gold Royalties
|
DPM*
|
Dundee Precious Metals Inc.
|
ORA
|
Aura Minerals Inc.
|
EDR
|
Endeavour Silver Corp.
|
PAAS
|
Pan American Silver Corp.
|
EDV
|
Endeavour Mining Corp.
|
PG
|
Premier Gold Mines Ltd.
|
ELD
|
Eldorado Gold Corporation
|
PVG
|
Pretium Resources Inc.
|
EMX
|
Eurasian Minerals Inc.
|
ROXG
|
Roxgold
|
ER
|
Eastmain Resources Inc.
|
RRI
|
Riverside Resources
|
EVM
|
Evrim Resources Corp.
|
SBB
|
Sabina Gold & Silver Corporation
|
EXN
|
Excellon Resources
|
SEA
|
Seabridge Gold Inc.
|
FR
|
First Majestic Silver Corp.
|
SGN
|
Scorpio Gold Corporation
|
FVI
|
Fortuna Silver Mines Inc.
|
SMF
|
Semafo Inc.
|
GAL
|
Galantas Gold Corporation
|
SPA
|
Spanish Mountain Gold Ltd.
|
GBU
|
Gabriel Resources Ltd.
|
SSL
|
Sandstorm Gold
|
GCM*
|
Gran Colombia Gold Corp
|
SSRM
|
Silver Standard Resources Inc.
|
GOLD
|
Barrick-Randgold
|
SVM
|
Silvercorp Metals Inc.
|
GPG
|
Grande Portage Res.
|
TGZ
|
Teranga Gold Corporation
|
GPR
|
Great Panther Silver Ltd
|
TMI
|
Tri Metals Mining Corp.
|
GRG
|
Golden Arrow Res. Corp
|
TML
|
Treasury Metals Inc.
|
GSV
|
Gold Standard Ventures
|
TMQ
|
Trilogy Metals Inc.
|
GUY
|
Guyana Goldfields Inc.
|
TSN
|
Telson Resources (Soho)
|
GWA
|
Gowest Amalgamated Res.
|
TXG
|
Torex Gold
|
HL
|
Hecla Silver
|
TYP
|
Typhoon Exploration Inc.
|
HRT
|
Harte Gold Corp.
|
USA
|
Americas Silver
|
IMG
|
Iamgold
|
VIT
|
Victoria Gold Corp.
|
IPT
|
Impact Silver Corp.
|
WPM
|
Wheaton Precious Metals
|
ITH
|
International Tower Hill Mines
|
YRI
|
Yamana Gold Inc.
|
Source: https://gwyde.blogspot.com/2019/07/gold-miner-pulse-2019-half-year-update.html
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