Following on from Friday's 24%, gold producer Regis Resources Limited (ASX: RRL) has fallen another 7.6% today, down to $1.58 in late afternoon trading.
It seems most gold miners are being hit today with Newcrest Mining Limited (ASX: NCM) losing 0.4%, Silver Lake Resources Limited (ASX: SLR) down 6% to 36.2 cents and Kingsgate Consolidated Limited (ASX: KCN) dropping just over 5%.
It wasn't like the spot gold price was hammered either, losing just 0.1% to US$1,292.61 an ounce on Friday. More likely it was a report by mining consultancy firm Surbiton and Associates, which noted that Australian gold production has fallen by 7% in the first quarter of this year.
The report says bad weather meant just 68 tonnes of the gleaming metal were mined in the first three months. Western Australia has seen some big storms and general bad weather so far this year. Surbiton's Sandra Close says some gold mines near Kalgoorlie have said that they had the whole year's rainfall in less than a quarter of the time. Dr Close also said many mines were forced to process lower grade stock piles, just to keep plants running at capacity.
Regis Resources reported on Friday that it had had a "major rainfall and flooding event" at its Garden Well and Rosemont mines, with production forecasts at the former falling from 190,000-210,000 ounces to 145,000-165,000 ounces.
One of the problems of investing in producing miners is that their mines can be affected by extreme weather events, whether it's gold, iron ore, copper or any other large bulk commodity. And it's one of the reasons why we prefer industrial stocks in general, especially if you plan on making it to a $1 million investment portfolio.
