The last two years have been extremely challenging for gold mining companies. Barrick Gold Corporation (NYSE:ABX), one of the biggest gold mining companies, has seen its shares drop more than 50% since the start of 2014. Newmont Mining Corp. (NYSE:NEM), another major gold producer, has not performed as bad as Barrick Gold, but the company’s shares are still down more than 28% since the start of 2014.
Kinross Gold Corporation (NYSE:KGC) is down more than 60% in the same period. The reason for the sharp drop in gold mining stocks is not surprising. For years, miners enjoyed healthy margins as gold prices climbed to record high levels, driven by the Federal Reserve’s ultra-loose monetary policy. But as the Fed began tightening, prices have almost halved from their record high levels.
Gold miners have been adjusting to the new price environment by focusing on the most profitable mines and bringing down their costs. Major miners such as Barrick Gold have brought down their cash costs significantly to try and adapt to the new reality for gold.
Even with the cuts, they remain a risky bet. That being said, in the present environment, junior miners are worth a look, given that they have a far more favorable risk/reward profile. One such miner is DynaResource Inc. (OTCQB:DYNR).
Based in Irving, Texas, DynaResource is engaged in the acquisition and development of precious metals properties. Through its Mexican subsidiary, DynaResource de Mexico S.A. de C.V., the company has interests in the San Jose de Garcia Project in Mexico’s northern Sinaloa State. The property is situated in San Jose de Garcia, around 100 km northeast of Guamuchil.
DYNR’s Mexican subsidiary is the exclusive operator of the San Jose de Garcia property.
Monday morning, DYNR’s Mexican subsidiary reported the delivery for sale on December 31, 2015 of approximately 200 Oz gold contained in concentrates. The exact weights in gold and silver ounces will be determined at final settlement.
DynaMineras further announced that contract mining at San Pablo mine and test mill runs of the pilot mill facility at San Jose de Garcia have restarted a few days ago.
DynaMineras is conducting operations at San Jose de Garcia based on internally developed mine plans for the San Pablo mine, as well as through the internally designed San Jose de Garcia Pilot Mill facility, which was previously operated by DynaUSA during the 2003-2006 period.
DYNR is a thinly-traded stock with no trades occurring today as a result of this announcement.
Time will tell if news of this sort can move the needle on this stock which has been stuck in this trading range since early 2015.
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