The stock price of four of the five largest mining companies operating in Nicaragua fell after the US Treasury Department announced a sanctions package targeting the country’s gold industrywhich this year could generate exports of 955.9 million dollars.
Approximately three-quarters of that amount is destined for the United States, said the deputy assistant secretary for Western Hemisphere Affairs of the State Department of that country, Ricardo Zúniga, a statistic ratified by the Central Bank of Nicaragua (BCN), and the government Center for Export Procedures (Cetrex).
even before they met this new sanction added to the previous onesthe price of the five companies on the Toronto, London and Colombia stock exchanges fluctuated normally, with ups and downs that simply reflect the dynamics of buying and selling shares normally considered safe, given the ‘safe haven’ that is bestows on gold, especially in times of turbulence.
That changed when news of the US decision reached investors, who began dumping their shares, fearing repercussions they could not foresee.
“It is already known that there is nothing more ‘nervous’ than a million dollars,” he told CONFIDENTIAL an economist who is monitoring the behavior of the shares of one of the affected companies.
A professional with experience in the Nicaraguan mining industry said that he does not rule out that, after the initial surprise that affected the executives of these companies, they are thinking about the convenience of looking for other safer horizons to move their capital.
“Of course this can lead to the closure or withdrawal of some of these companies. I have not yet analyzed the legal implications of this anouncement, but it is certain that some will try to leave. This announcement could lead to them not even being able to sell their assets and having to leave them abandoned, passing to the control of ‘others’, who must already be rubbing their hands”, he warned.
Caliber and Mako Mining lost 40.8% and 33.0%
Below we present the stock market performance of five companies listed in London, Bogotá and Toronto. All values have been converted to dollars, according to the price of this Tuesday, October 25, although the percentages indicated refer to the variation in the original currency.
Caliber Mining Company is the one that suffered the most of all. Its shares, which at the beginning of the day on Monday the 24th were trading at USD 71.5 cents, fell USD 29.2 cents in two days, to close at USD 42.3 cents this Tuesday the 25th, which marked an accumulated loss of 40.8%.
The Canadian capital company -which also operates a mine in Nevada, United States- has B2Gold as a minority partner (around 40% of the shares), and is the owner of Desminic, which operates in La Libertad, (Chontales); Triton Minera, which extracts material in the El Limón Mine, (León), and the recently acquired CXB Nicaragua.
In a statement posted on your websitethe company said it was reviewing the announcement from the US Department of the Treasury, and examining it “proactively”, in addition to contacting that US government entity “to ensure full compliance with these provisions”.
“Calibre reaffirms its commitment to continue to comply with all relevant international laws and restrictions. The company will release a market update once additional information becomes available, following consultations with its advisers and the Treasury Department,” he promised.
The Canadian Mako Mining, which operates the San Albino Mine, in Nueva Segovia, is the one that has the least amount of concession areas (three, with a total of 17,617 hectares) of all the companies analyzed here, and at the same time, the second most hit of all of them.
Its shares on the Calgary, Alberta, market (known as TSXV, owned by the Toronto Stock Exchange, or Toronto Stock Exchange), lost 33% of their value, going from USD 13.1 cents to USD 24. October at 10 in the morning, up to the price of USD 8.8 cents, reached at the close of trading on Tuesday.
The company says it has started production from the second quarter of 2021, and expects to expand its mining areas in several areas where it is looking for new gold veins.
The British Condor Gold
The English company Condor Gold SA, is listed on the London Stock Exchange, as well as on the Toronto Stock Exchange, reporting high losses in both markets.
Thanks to the time difference, the company’s shares remained stable in the London market throughout the day on Monday, but plummeted, losing USD 2.46 cents (16.4% of its value), since the close of operations on Monday. Monday afternoon, until its closing price on Tuesday.
The performance on the Canadian stock market was worse, when each of its shares lost 24.1% of its value.
Condor Gold SA, operates the La India Mine, in Santa Rosa del Peñón, (León).
The Miners Group
Grupo Mineros, with Colombian capital, is listed on the Colombian Stock Exchange (BVC), as well as on the Toronto Stock Exchange (TMX).
In the last five days of operations, the behavior in the South American entity showed a minimum drop of 3.26%, which remained almost unchanged after the US announcement on Monday. Its biggest loss occurred on the Canadian stock market, where Mineros shares lost 11.9% of their value, dropping their price from USD 0.61 to USD 0.54 cents.
This Colombian capital company entered Nicaragua in March 2013, when it acquired 90% of the shares of the Hemco company, which operates in Bonanza. It has received 24 concessions that add up to 190,605 hectares of the national territory, and are equivalent to 21% of all the areas granted in concession.
The company, which also has mines in Colombia, Chile and Argentina, reported production of 270,000 ounces of gold in 2020, a year in which it reported having 3,100 employees.
Blue Stone Gold Mining
The Canadian Blue Stone Gold Mining, was the least affected of all: the value of its shares increased by fractions of cents on Monday, before falling for a few hours on Tuesday, until recovering lost ground, and closing at exactly the same level. in which it had opened week.
In 2014, Blue Stone Gold Mining received from the Ministry of Energy and Mines (MEM), a 25-year mining exploration concession, in an area of 25,692 hectares, distributed between Prinzapolka, Siuna and Rosita, in the Autonomous Region of North Caribbean.
