http://www.bluechip-stocks.com/penny-stocks/great-mining-companies-feeling-the-pinch
Great Mining Companies Feeling the Pinch Spot prices for gold and silver really seem stuck. Gold is consolidating around $1,700 an ounce, while silver can’t seem to break much past $33.00. There is still a lot of enthusiasm for these two commodities, but investors are getting a little impatient with the group. You can really notice this in the large-cap sector. Many of the biggest names have been hit hard on the stock market, while gold and silver prices remain flat. Smaller gold mining companies are also feeling the pinch within the industry. Rising costs are affecting all the players. One mid-sized company that’s worth keeping an eye on going forward is Osisko Mining Corporation (TSX/OSK). This Canadian gold miner trades on the Toronto Stock Exchange, and it has a strong business plan for growth. The stock has been in a solid downtrend for a while now and may even hit penny stock status (under $5.00 a share) if the trend continues. This company operates the Canadian Malartic gold mine located in the Abitibi mining district in Quebec. According to the company, Canadian Malartic currently has the single biggest gold reserve in production in Canada. Estimated proven and probable reserves are approximately 10.7 million ounces of gold, and growing. The company’s stock chart is below:
Chart courtesy of www.StockCharts.com Osisko poured its first gold bar on April 13, 2011, and it is striving to produce one million ounces per year by 2016. Reporting in Canadian dollars, Osisko’s third-quarter revenues grew to $158.5 million, up from $122.9 million in the comparable quarter. Total gold ounces sold were 95,424, compared to 72,100 in the same quarter last year. Earnings were $26.2 million, compared to $9.3 million; diluted earnings per share grew to $0.07, up from $0.02. Like all resource stocks, Osisko’s share price is going to trade commensurately with spot gold and silver prices.Silver is probably a more attractive play in the market today, given spot price action. The commodity is used in more industrial manufacturing, and has lagged gold’s appreciation for quite some time. Silvercorp Metals Inc. (NYSE/SVM) is a small, but growing silver miner with a share price also approaching penny stock status. The company’s latest quarter was a tough one, but Street analysts expect strong growth in 2014. There are not as many silver penny stocks in the marketplace as there are gold penny stocks. But, a mining company is likely to produce both gold and silver from geological deposits, and many companies report either gold or silver production in the form of equivalent ounces.
As a group, gold and silver stocks aren’t going to appreciate until spot prices do so, but the marketplace doesn’t seem keen on buying these commodities right now. What gold and silver prices need is a catalyst. Many Street analysts are forecasting much higher silver prices over the next few years, but the only way this is going to happen is for business conditions in manufacturing to get a whole lot better.