Why Centerra Gold Inc.'s Shares Popped
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Centerra Gold jumped as much as 13% briefly today after updating its reserves.
So what: Management said that indicated resources increased by 406,000 ounces at its Oksut project in Turkey, to 1.1 million ounces. Probable reserves increased by 114,000 at the Gatsuurt project in Mongolia.
Now what: Those were the positives, but gold reserves fell by 53,000 overall this year after accounting for 912,000 processed ounces. The other challenge is that the company's year-end reserves were estimated using a gold price of $1,300 per ounce, down from $1,350 a year ago, but still above today's price of $1,258. That's the core problem for gold miners, who have less economically viable gold as the price falls, which I think it will continue to do in 2014. For that reason, I'm not buying into the pop today.
A better buy for today's market trends
There's a huge difference between a good stock and a stock that can make you rich. The Motley Fool's chief investment officer has selected his No. 1 stock for 2014, and it's one of those stocks that could make you rich. You can find out which stock it is in the special free report, "The Motley Fool's Top Stock for 2014." Just click here to access the report and find out the name of this under-the-radar company.
The article Why Centerra Gold Inc.'s Shares Popped originally appeared on Fool.com.Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.