Metals and mining stocks made a strong comeback on Monday as commodities rallied on the back of a weakening U.S. dollar. The greenback has been weakening after Friday’s disappointing jobs report, which has delayed a potential rate hike from the Federal Reserve.
It has been a mixed year for metal and mining stocks. The sector saw a sharp pullback at the start of this year but rebounded sharply after some promising data from China combined with speculative trading activity led to a rally in commodities such as iron ore. While fundamentals for several commodities still remain weak, a weaker dollar should provide some support.
Indeed, shares of major mining companies have seen sharp gains on this. BHP Billiton Limited (ADR) (NYSE:BHP), which announced an end to its progressive dividend policy earlier in the year, has gained more than 7% in the last three trading sessions. Rio Tinto (NYSE:RIO) shares are up almost 7% in the last three trading sessions. Freeport-McMoRan Inc. (NYSE:FCX) shares have gained more than 5% in the last three trading sessions.
Centenera Mining Corp. (TSX-Venture:CT) shares have also been rallying. Based in Vancouver, Centenera Mining is a mineral exploration company engaged in the exploration and evaluation of mineral properties located in Argentina.
The company’s projects include Mina Angela Project, which is located in Chubut province; Organullo Project, which is located in Salta province and has alteration indicative of a productive sulfidation epithermal gold deposit; Crosby Property, which is located in northern Jujuy province and is positioned contiguous with the Pirquitas Mine; Regional Exploration Data, and Trigal Property, which is located in Salta Province and comprises over 6,050 hectares.
CT shares are up more than 30% in trading today on above average volume of 242k. In the last three trading sessions, CT shares have gained more than 60%.
Centenera shares are rallying in trading today after the company announced that it has signed a Letter of Intent (LOI) with an arm’s length individual to acquire the El Quemado Tantallum-Niobium-Bismuth- Lithium Pegmatite Project in Salta Province, northwest Argentina.
According to the terms of the LOI, CT will have an option to acquire a 100% interest in the project, subject to a 2% net smelter return ("NSR") to be granted to the Vendor, over a 24-month period inconsideration for issuing 2.5 million common shares of the Company.
Based on this news, shares of CT have hit a 52-week high as investors hit the "buy" button both on the stock and the mining sector as a whole.
