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Week in miners: Harmony drops, Perseus buys and silver supply lags

 
 Week in miners: Harmony drops, Perseus buys and silver supply lags (photo credit: SHUTTERSTOCK)
Week in miners: Harmony drops, Perseus buys and silver supply lags
(photo credit: SHUTTERSTOCK)

Last week brought a mixed-bag of precious metals mining news. Harmony reported an increase in net profits but had a stock price drop of about 9%.

It’s been a busy week in miners as Harmony Gold revised guidance leading to a drop in share price, Perseus announced yet another acquisition of Predictive and silver mining supply continues to fail to meet demand.

Harmony Gold shares drop

South African miner Harmony Gold’s shares dropped last week after announcing a lower-than-expected dividend payout and revised guidance to be more conservative. The shares tumbled about 9% last week, beginning trading on Monday at 9.65 and falling to 8.80 by the end of the day Friday.

One-week chart of Harmony Gold. (Source: Yahoo Finance) (credit: PR)
One-week chart of Harmony Gold. (Source: Yahoo Finance) (credit: PR)

The miner reported a larger net profit and revenue for the previous fiscal year, citing higher gold prices and increased ore quality.

The company also announced an increase in capital expenditure guidance from $445 million to $592 million.

“We remain conservative in our planning assumptions,” CEO Peter Steenkamp said.

Perseus buys shares of Predictive

Australian mining company Perseus announced last week it is increasing its interest in issued shares of Predictive to 19.9%.

Perseus previously held a 13.8% stake in the Blackrock-backed operation, which it announced about a month prior.

The Australian company said it had no intentions of acquiring control or making a takeover bid for Predictive.

Predictive owns a pre-development site in Guinea, West Australia.

Mining supply can’t meet silver demand

Global silver supply has flat-lined, yet explosive growth in demand has caused supply chain issues, according to a recent report from Mining.com.

The white metal is at the center of a global clean-energy transition and is used heavily in solar cell and electric vehicle creation. 

 Silver demand cannot keep up with supply. (Credit: Metals Focus) (credit: PR)
Silver demand cannot keep up with supply. (Credit: Metals Focus) (credit: PR)

The Silver Institute forecasts industrial applications will drive 58.3% of the world’s 1.2 billion ounces of demand. Also, given the flat supply growth, it’s clear that production is hitting a notable top.

Silver demand for industrial uses previously accounted for about half of global use, however that percentage has now jumped to 64%, a 19% increase from last year.

The World Silver Survey has reported a silver shortage in each of the past five years.

This article is for informational purposes only. The opinions and analysis herein are those of the author and are not financial advice. The Jerusalem Post (JPost.com) does not endorse or recommend any investments based on this information. Investors should consider their financial situation, investment goals, and risk tolerance before making any decisions. Consulting a qualified financial advisor is recommended. JPost.com is not liable for any investment losses from using this information. The information provided is for educational purposes only and should not be considered as trading or investment advice.

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