Mwana Africa plc, Shanta Gold Limited and Trans-Siberian Gold plc Rise On Production Gains As Gold Breaks Above $1,240 Level

Mwana Africa plc (LON:MWA), Shanta Gold Limited (LON:SHG) and Trans-Siberian Gold plc (LON:TSG) soar ahead of gold-backed ETFs like the SPDR Gold Trust (ETF) (NYSEARCA:GLD) and Gold Bullion Securities (LON:GBS).

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

goldThe price of gold rose after Asian markets opened on Monday morning, and gold for immediate delivery was trading at $1,242 per ounce shortly after London markets opened on Monday.

The $30bn SPDR Gold Trust (NYSE: GLD.US) ETF closed almost unchanged on Friday at $118.99, leaving it up by 2.5% so far this year. In the UK, London-listed Gold Bullion Securities (LSE: GBS) rose by 0.75% to $119.05 in early trading, leaving it up by 2.9% on the year to date.

Miners report production gains

Shares in Mwana Africa (LSE: MWA) climbed 11% to 2.2p in early trading, after the African gold and nickel miner reported that gold production from its Freda Rebecca mine  in Zimbabwe had risen by 23% to 16,555 ounces during the second quarter, while all-in sustaining costs fell  by 17% to $1,061 per ounce.

This suggests Mwana can remain profitable even if the price of gold remains weak. Mwana’s CEO, Kalaa Mpinga, says that recent modifications to the mine “appear to be bearing fruit” and should result in “a more consistent operating performance in the coming quarters“.

Shanta Gold Limited (LSE: SHG) climbed 8% to 9.5p when markets opened this morning, after the Tanzania-focused gold miner reported a 4% increase in gold production to 22,720 ounces, while all-in sustaining costs fell by 9% to just $873.

Shanta’s low mining costs mean that its mining operations have remained robustly profitable in the face of lower gold prices, and the firm reported second quarter cash flow from operations of $14.8m, double the $7.0m reported for the same period last year.

Trans-Siberian Gold (LSE: TSG) rose by 12% to 10.9p this morning after the small Russia-focused miner reported that the average gold grade processed during the third quarter of 2014 was 8.28g/t, the highest achieved at any time during the last three years and a 20% improvement on the 6.87g/t the firm reported during the first half of 2014.

Trans-Siberian reported third-quarter production of 7,784 ounces of gold and 9,121 ounces of silver, but while production has been rising at the firm, it has struggled with costs: Trans-Siberian’s total cost of sales per ounce of gold was $1,269 during the first half of this year, compared to an average sale price of $1,292 per ounce of gold, which is above the current market price for gold.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Roland Head owns shares in Mwana Africa. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Person holding magnifying glass over important document, reading the small print
Investing Articles

Just released: our top 3 small-cap stocks to consider buying in October [PREMIUM PICKS]

Small-cap shares tend to be more volatile than larger companies, so we suggest investors should look to build up a…

Read more »

Investing Articles

How I’d use an empty Stocks and Shares ISA to aim for a £1,000 monthly passive income

Here's how using a Stocks and Shares ISA really could help those of us who plan to invest for an…

Read more »

Investing Articles

This FTSE stock is up 20% and set for its best day ever! Time to buy?

This Fool takes a look at the half-year results from Burberry (LON:BRBY) to see if the struggling FTSE stock might…

Read more »

Investing Articles

This latest FTSE 100 dip could be an unmissable opportunity to pick up cut-price stocks

The FTSE 100 has pulled back with the government’s policy choices creating some negative sentiment. But this gives us a…

Read more »

A young woman sitting on a couch looking at a book in a quiet library space.
Investing Articles

As the WH Smith share price falls 4% on annual results, is it still worth considering?

WH Smith took a hit after this morning’s results left shareholders unimpressed. With the share price down 4%, Mark Hartley…

Read more »

Investing Articles

The Aviva share price just jumped 4.5% but still yields 7.02%! Time to buy?

A positive set of results has put fresh life into the Aviva share price. Harvey Jones says it offers bags…

Read more »

Investing Articles

Can a €500m buyback kickstart the Vodafone share price?

The Vodafone share price has been a loser for investors in recent years, and the dividend has been cut. We…

Read more »

Frustrated young white male looking disconsolate while sat on his sofa holding a beer
Growth Shares

3 mistakes I now avoid when choosing which growth stocks to buy

Jon Smith runs through some of the lessons he's learnt the hard way over the years about what to look…

Read more »