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Analyzing the South-African Mining Companies


Jan. 7 2016, Updated 7:05 p.m. ET

Miners rout

The current rout in precious metal prices has extended to the mining sector. The fall in gold and silver of 10.6% and 12.1%, respectively, has made the mining sector anemic, as seen in the VanEck Vectors Gold Miners ETF (GDX). GDX fell a whopping 25.7% in 2015. Most of the mining companies that are components of GDX fell hard in 2015. The VanEck Vectors Junior Gold Miners ETF (GDXJ) also took a steep fall of 19.9% in 2015.

Let’s concentrate now on the performance of South African mining companies in 2015.

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South African miners

Major South African mining companies such as Sibanye Gold (SBGL), Gold Fields (GFI), and AngloGold Ashanti (AU) have fallen 20%, 391%, and 192%, respectively, so far in 2015. The fall was most likely due to the sharp fall in the prices of precious metals that these companies mine.

All three companies are trading at a significant discount from their next 12-month target price. The coming year may bring a ray of hope for these miners. Even though these three stocks are trading above their 20-day moving averages, a possible rebound in prices could be expected as 2016 sets in.

100-day moving average

Sibanye Gold and Gold Fields are trading at a premium of 9.3% and 1.5%, respectively, from their 100-day moving averages. AngloGold Ashanti is trading at a discount of 7.7% from its 100-day moving average. This could suggest that AngloGold may have a faster rebound in prices compared to the other two companies. GDX and GDXJ are trading at a discount of 4.7% and 4.8%, respectively, from their 100-day moving averages.


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