From the Motley Fool Site16 Sep 2013 11:39
Most gold and silver miners saw their share prices fall in-line with underlying metal prices last week, but when markets opened this morning, three of the biggest London-listed gold and silver producers saw their share prices plummet.
Shortly after markets opened this morning, Fresnillo (LSE: FRES), Hochschild Mining (LSE: HOC) and African Barrick Gold (LSE: ABG) all fell by 10% or more, despite the price of gold remaining stable at around $1,325 per ounce. So what's behind these sudden falls?
One factor could be a proposed mining levy in Mexico. All of Fresnillo's gold and silver production is in Mexico, and Hochschild Mining also has significant operations in Mexico. According to the FT, the Mexican government is proposing a new 7.5% levy on miners' pre-tax profits. Both Hochschild and Fresnillo are already struggling against the effects of high operating costs and falling metals prices, and this further cost could leave both companies struggling to turn a profit, now that gold and silver prices are trending lower again. Shortly after 9am, both Fresnillo and Hochschild Mining were down by 13%.
One factor could be a proposed mining levy in Mexico. All of Fresnillo's gold and silver production is in Mexico, and Hochschild Mining also has significant operations in Mexico. According to the FT, the Mexican government is proposing a new 7.5% levy on miners' pre-tax profits. Both Hochschild and Fresnillo are already struggling against the effects of high operating costs and falling metals prices, and this further cost could leave both companies struggling to turn a profit, now that gold and silver prices are trending lower again. Shortly after 9am, both Fresnillo and Hochschild Mining were down by 13%.
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