Non-Metallic Mineral Mining Sector Provides Good Returns
February 25 2013 - 7:00AM
Marketwired
Non-metallic Mineral mining sector spawn a wide range of
activities. The sector includes companies dealing in diamonds and
other such minerals. Alexco Resources Corp. (NYSE MKT: AXU) is
adding new mines to improve its production levels. The company is
also cutting its costs to increase profitability. Conversely, Harry
Winston Diamond Corp. (NYSE: HWD) is looking to streamline its
operations and sold its luxury watch business to The Swatch Group.
The move will let it focus on the diamond mining business.
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Harry Winston Diamond Corp. engages in diamond mining. The
company recently announced a healthy jump in its rough diamond
sales. Its stock is up 6 percent so far this year so far and is
expected to perform better as demand for rough diamonds is likely
to continue into the near future.
The company is also looking to restructure its business as the
company sold its luxury watch unit to The Swatch Group. The deal
was valued at $750 million. The move will help Harry Winston
Diamond in concentrating its efforts and resources to its mining
business and benefit from the rush in diamond demand. The company
has mining joint venture with Rio Tinto for its Diavik mine, which
is expected to produce six million carats of diamonds this
year.
Harry Winston Diamond also won a minor relief when Ekati suit
against it was withdrawn. After the suit dismissal, the company is
in the position to go ahead and negotiate the deal for acquiring
BHP Billiton's interest in the mine. It is likely to use the
proceeds from the sales of its luxury watch unit to complete this
deal. With this acquisition, the company will boost its mining
portfolio. Harry Winston Diamond is also pursuing growth outside of
its domestic market.
On the other hand, Alexco Resources is on a growth trajectory as
the company announced 16 percent increase in its silver production
for the fourth quarter of the year. The improvement is likely to
provide a positive fillip to the stock which is currently trading
near its 52-week lows. The company is mainly invested in silver
mining and is looking to increase its efficiency to boost the
margins and profits. The company is also looking to commission new
mines including Lucky Queen and Onek mines to boost the production.
With positive silver price trend, the company is likely to perform
well in the future. It also deals in other minerals including
quartz and has diversified portfolio.
Alexco Resources also recently announced its third quarter
results. The company's net income for the quarter stood at $5.3
million. Additionally, it posted 33 percent decline in cash costs
per ounce and 12 percent increase in silver production. With
increase in margins, the company is expected to perform better. The
company is looking to achieve 5 million ounces of annual production
by the year 2015 and Alexco Resources will be adding new mines for
accomplishing this purpose. The stock currently has good upside
potential and may provide healthy returns to long-term
investors.
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