(Editors' Note: This article covers a micro-cap stock. Please be aware of the risks associated with these stocks.)
The Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) includes a comprehensive collection of junior precious metals mining companies that well and truly represents this particular sector. We like to keep tabs on the companies that do well within this motley collection; and those that don't.
This article gives a brief overview on our observations for the month of September. The companies currently held by the GDXJ are documented here. Of the 71 companies held by GDXJ at the time of writing we considered 65 in our analyses.
September proved to be a difficult month for the GDXJ. Shares of the ETF lost 16.2%. There were three declining weeks, and only one that managed to eke out a small advance.
The chart below shows the performance of the Market Vectors Junior Gold Miners ETF and the performance of gold as represented by the SPDR Gold Trust ETF (NYSEARCA:GLD) for the month of September. Also shown is the fund's top performer SEMAFO (OTCPK:SEMFF) and the fund's worst performer Belo Sun Mining (OTCPK:VNNHF) for the month of September.
GDXJ data by YCharts
Considering the monthly performance we found only 5 companies posting gains. These companies are listed in the table below.
SEMAFO's outstanding performance is presumably owed to the latest batch of exploration results at the Mana property in Burkina Faso. Colossus Minerals seems to be bouncing back from recent woes with regards to setbacks in the development of the Serra Pelada mine. And no news is apparently good news for Guyana Goldfields (OTCPK:GUYFF) where the last news release about the Aurora project dates back to early June.
There were 6 companies posting losses in excess of 30% for the month of September only. These companies are listed in the table below.
Atac Resources (OTCPK:ATADF) remained unloved despite respectable drill results from the Sunrise and Isis zones up in the Yukon. Crocodile Gold released no news whatsoever in September, but raised the production guidance in early October. Perhaps that will lift the company from the shakers list in our October update. A similar void of news can be reported for this month's dog of the GDXJ, Belo Sun Mining who remained silent in September about developments on its Brazilian properties.
Weekly Advances & Declines
We are keeping track of weekly advances and declines of the individual stocks included in the market Vectors Junior Gold Miners ETF, or GDXJ. Four weekly moves were captured in the month of September.
Guyana Goldfields proved to be the most persistent advancer of the month with three green weeks, and only one red.
Eleven companies were registered with four declining weeks in a row: Asanko Gold (NYSEMKT:AKG), Atac Resources Ltd , Crocodile Gold (OTCQX:CROCF), Endeavour Mining (OTCQX:EDVMF), Great Panther Silver (NYSEMKT:GPL), Indophil Resources (NlIPLRF.PK), Resolute Mining (OTCPK:RMGGF), Rio Alto Mining (NYSE:RIOM), Sabina Gold & Silver (OTCPK:SGSVF), Sandstorm Gold (NYSEMKT:SAND), Seabridge Gold (NYSEMKT:SA).
Advance / Decline Line
The diagram below shows the A/D-line for the GDXJ superimposed on the weekly chart starting in early September. At this point in time the A/D line for the fund confirms the down trend. Unfortunately no relief is offered from this technical indicator.
Difficult times for junior precious metal miners appear to linger. The GDXJ has been in a down trend since late 2010 which appears solidly entrenched for the moment. It's a good time to step aside; or pick stocks in this sector very carefully.
Having said that, we also contend that valuations are at fire sale levels and a well-sorted and executed shopping list at the bottom will provide rewards in the next run to the top. Companies that do well during a down turn often perform better than the rest during a rally.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.