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A horrible year for mining stocks. Only a few were spared.

Author: Patrick Cairns

[Moneyweb – 19 January 2015 – http://www.moneyweb.co.za/]

CAPE TOWN – One of the dominant stories on the JSE over the last year has been the poor performance of listed miners. Their share prices have taken a hiding almost across the board.

A quick survey of mining counters on the bourse shows that more than 75% are down over the last twelve months. And of those, 55% have shed more than a third of their value.

Generally miners performed particularly poorly in the second half of the year following the slump in commodity prices, led by oil. However, for others, like Kumba Iron Ore, the decline was pretty steady all the way from January.

There was however still money to be made in mining stocks if you had been lucky enough to pick the big winners. Five are up more than 50% over the year, and two have shown over 100% growth.

If one had to chose a mining sector to be in over 2014, gold stocks would have been the best bet. Of the listed gold producers, DRD Gold was the only one to show a big drop.

On the upside, Sibanye Gold and Gold Fields were two of the top-perfomers. Sibanye has more than doubled its value over the last year, while Gold Fields has gained 85.4%.

The market may well continue to reward those gold producers that show lower costs of production. Many gold miners are currently underwater, with it costing them more to produce an ounce of gold than they can sell it for at spot prices, so those that successfully manage their costs may remain attractive.

The top-perfoming mining stock over the last 12 months is however the thinly traded Alt-X listed Tanzanian-based Kibo Mining. The exploration and development company has gained 121.1%.

Kibo has a portfolio of gold, coal and uranium assets under development across Tanzania, although none are yet operational. Investors may well have been attracted to the potential of the deposits Kibo holds as well as the increasingly stable operating environment for mining companies in that country.

The other two big gainers are emerging Diamond miner DiamondCorp and junior platinum producer Eastern Platinum. Both are up a little more than 50% over the year.

DiamondCorp’s primary asset is the Lace Diamond Mine near Kroonstad. The mine has not been operational since the 1930s, but DiamondCorp has the rights to mine the tailings as well as adjoining properties. The project is still under development.

The rise in Eastern Platinum’s share price is entirely due to its announcement in November that it will be selling its South African assets to China’s Hebei Zhongbo Platinum. On the back of that news, the share price spiked well over 50% in a single day.

The worst place an investor could have put their money was in coal miners. Buffalo Coal, Coal of Africa and The Waterberg Coal Company have all shed more than 70% in the last 12 months, and Hwange Colliery is 68% lower. Exxaro is also down more than a third.

The only bright spot amongst them is Wescoal, which gained 6.5%.

Eastern Platinum aside, the Platinum miners have also had a pretty miserable time of it. No other platinum miner is positive over the year, with the only marginal good news being that Wesizwe Platinum is only 1.2% lower.

Amongst the big three, Anglo American Platinum produced the most respectable performance losing just 9.8%. Impala Platinum is 37.2% lower and Lonmin shed 46.1%.

The big diversified miners were also out of favour. African Rainbow Minerals, Anglo American, BHP Billiton and Glencore have all lost more than a quarter of their value over the last year.

The below table illustrates the one-year performance of all the JSE’s listed mining companies.

Performance of JSE-listed mining stocks

Counter1 Year change
African Rainbow Minerals-39.5%
Anglo American Platinum-9.8%
Anglo American-25.1%
AngloGold Ashanti-8.2%
Aquarius Platinum-62.0%
Assore-59.0%
Atlatsa Resources Corporation-57.5%
Bauba Platinum-55.0%
BHP Billiton-29.0%
Buffalo Coal-73.6%
Central Rand Gold0.0%
Chrometco-33.3%
Coal of Africa-72.3%
Delta EMD-22.3%
DiamondCorp57.9%
DRD Gold-33.3%
Eastern Platinum50.5%
Exxaro Resources-33.4%
Glencore-27.6%
Gold Fields85.4%
Goliath Gold Mining-26.0%
Harmony Gold Mining Company12.0%
Hwange Colliery Company-68.2%
Impala Platinum-37.2%
Jubilee Platinum-38.3%
Kibo Mining121.1%
Kumba Iron Ore-48.4%
Lonmin-46.1%
Merafe Resources9.3%
Northam Platinum-8.4%
Pallinghurst Resources16.4%
Pan African Resources-7.8%
Petmin-26.1%
Randgold & Exploration11.7%
Resource Generation-38.6%
Rockwell Diamonds-30.6%
Royal Bafokeng Platinum-13.4%
Sable Metals and Minerals-62.3%
Sentula Mining-47.5%
Sibanye Gold102.4%
South African Coal Mining Holdings-76.0%
Tawana Resources-70.0%
Tharisa-1.0%
The Waterberg Coal Company-72.6%
Village Main Reef-3.8%
Wescoal6.5%
Wesizwe Platinum-1.2%
ZCI-17.9%
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