Avocet Mining, SilverCrest Mines, and Agnico-Eagle Mines are all under the spotlight this week, writes Roland Head of The Motley Fool UK.
Gold prices have remain largely unchanged over the last five trading days, and gold on the November contract was up just 0.07% to $1,724 per ounce at the time of writing.
Of course, the only practical way for most private investors to invest in gold is through exchange traded funds. The performance of the $63 billion SPDR Gold Trust ETF (GLD) has crept ahead over the last week, gaining 0.48% to $167.14.
Meanwhile, the London-listed ETFS Gold Bullion Securities ETC (London: GBS) has moved slightly in the other direction, slipping 0.89% to $165.99. Gold Bullion Securities has risen by 8.9% so far this year, outperforming the SPDR Gold Trust, which is up by 7.2%.
Gold's Big Movers
Many investors prefer to invest in gold mining stocks, rather than gold itself, as gold miners are able to benefit from their operational gearing to outperform the price of gold. Let's take a look at some of this week's biggest movers:
Avocet Mining (London: AVM) is up 5% this week to 67p. The company's shares dropped after a disappointing quarterly update at the start of November, but the price has since crept up, with chairman Russell Edey purchasing 100,000 shares and hedge fund Elliott International ramping up its stake from 13% to 27%, suggesting they all expect a near-term price rise.
SilverCrest Mines (SVLC) is up 35% to $2.79 over the last three months, and shareholders have seen the value of their investment rise almost 9% this month alone.
The gains have been driven by SilverCrest's rising gold and silver sales, and a strong third quarter, during which cash flow from the firm's main Mexican mine rose to $10 million, up from $5 million for the same period last year. The expiry of SilverCrest's gold hedging facility also helped—its gold production is now unhedged, so it benefits fully from rising gold prices.
Agnico-Eagle Mines (AEM) is up 22% to $54.35 over the last three months—an impressive gain for a $9 billion company.
Agnico has broken into profit this year and has ramped up production so fast that it has twice updated its production guidance for the 2012 fiscal year, raising its target from 875,000 to 1,025,000 ounces of gold.
Cash costs per ounce have also fallen, and are expected to be around $700, which is highly competitive at current gold prices.