The worst performer on the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) today has been the Evolution Mining Ltd (ASX: EVN) share price.
In afternoon trade the gold miner's shares are down 8% to $3.09.
Why are Evolution Mining's shares crashing lower?
Although fellow gold miners Northern Star Resources Ltd (ASX: NST), St Barbara Ltd (ASX: SBM), and Resolute Mining Limited (ASX: RSG) have all drifted lower after the gold price weakened, Evolution has fallen notably more on the back of a report in the AFR.
According to the report, one of Evolution's major shareholders has been selling down its stake in the company.
The equities desks of JP Morgan and Citi are believed to have been seeking bids for 84.6 million shares on Thursday on behalf of La Mancha Resources.
This would reduce La Mancha's 20% stake down to just over 250 million shares or approximately 15% of the company. It would also be the third time that La Mancha has sold down its stake.
The report indicates that the brokers were acting with a floor price of $3.19, valuing the stake at a minimum of $270 million.
This sell down has yet to be confirmed by the miner, so the reason for the sell down is unclear at this stage. But one thing that is known, is that no more selling will occur for at least 90 days according to term sheets seen by the news outlet.
Should you buy the dip?
With interest rates rising in the United States, I expect the U.S. dollar to strengthen and bond yields to continue to widen. This could put a lot of pressure on the gold price and of course those that mine the precious metal.
It certainly has been a surprisingly good 12 months for the gold miners, but I'm not convinced it will be the same story over the next 12 months. This could make it an opportune time to follow the lead of La Mancha and sell your gold miner shares as well.
