It's tough work being a miner. Of the four stocks featured below, four of them have exposure to gold or iron ore. Both commodities appear to be in a downtrend, and investor sentiment is following today. And that's despite the S&P/ASX 300 Index (Index: ^AXKO) (ASX: XKO) rising 0.3% in mid-afternoon trading.
Here's our view…
Alkane Resources Limited (ASX: ALK) is down 12% to 22 cents, as the gold price continues to trend down. Overnight spot gold gained slightly to hit US$1,226 an ounce. But the gold price was trading above US$1,300 an ounce just over a month ago. Alkane owns the Tomingley mine in NSW, and says its all-in sustaining costs are around $849 an ounce.
Reverse Corp Limited (ASX: REF) is down 8% to 11.5 cents on no news. The company operates the 1800 Reverse number that allows mobile phone users to make calls if they are out of credit, and an online contact lens store, which the company says is approaching profitability. Year-to-date, shares are still up 55%.
Another gold miner, St Barbara Ltd (ASX: SBM) has dropped 8% to 14.7 cents. St Barbara operates 3 mines, one in each of Australia, Solomon Islands and Papua New Guinea. Although, the Gold Ridge mine in the Solomon Islands is being handed back to the government, as the miner decided it was all too hard and is walking away. The company is also struggling to turn around Simberi in PNG, with expectations the mine will become cash flow positive by June quarter 2015.
Arrium Limited (ASX: ARI) continues to fall – losing another 6.3% to 38 cents. It seems investors aren't impressed by the company's massive capital raising – which was always likely to happen, given the huge debt load the company was shouldering. Add in its exposure to a falling iron ore price and things are turning ugly for Arrium and its long suffering shareholders.
Atlas Iron Limited (ASX: AGO) sinks 5.4% to 53 cents, as iron ore prices slumped to US$83 a tonne overnight. With production costs estimated at above the current iron ore price, Atlas may well be in a loss making position, and desperately hoping for a recovery in the iron ore price, a big fall in the Aussie dollar, or both.
