Turqoise Hill (TQR) Jumps as Mining Stocks Rally on Citigroup's New-found Bullishness

Michael Teague |

The world’s number-two publicly traded mining outfit Rio Tinto (RIO) could very well be cited as a significant catalyst for Thursday’s broad and unexpected rally for mining stocks. The prior evening’s release of production data for the recently-ended period seemed to suggest that the company was plenty capable of implementing and executing a substantial turnaround strategy more or less exactly according to stated plan.

Equally notable, however, is the fact that the 3 percent uptick for Rio’s stock made it one of the stronger performances of the day among its peers in the metals and minerals mining industry, but was still eclipsed by an number of other companies in its field. Among the most impressive of these was the Canadian miner Turquoise Hill Resources Ltd. (TRQ) , whose stock at one point rose nearly 11 percent before paring back slightly towards the closing bell.



Turquoise’s operations are attest to a certain intrepidness and exoticism. Its flagship project, the Oyu Tolgoi copper-gold mine, is located in remote Mongolia, where the company also owns coal properties. The same could also be said of its diverse asset portfolio, and particularly in Australia where the company produces molybdenum, rhenium, and uranium in addition to the more traditional precious metals like copper and gold.

Aside from some significant and positive recent developments for the company, however, the day’s gains are most likely the result of the company’s own Q4 production report that was released early in the day, showing substantial increases in gold and copper output from Oyu Tolgoi, a project that has only been in operation for about a year.

But the fact that the rally swept up a number of mining equities in its wake is not sufficiently explained by any one production report, be it from a giant like Rio Tinto, or a more modest company like Turquoise Hill. Indeed, miners were mostly able to feed off of momentum created by Citigroup (C) analysts on the same day announced their bullishness on the mining sector, for the first time in three years.

Furthermore, Citi’s analysts cited the best prospects for large, diversified miners, including BHP Billiton (BHP) . The $3.5 billion Turqoise Hill, however, has the benefit of strong support from Rio Tinto (RIO) , who owns a 51 percent stake in its smaller peer.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer

Companies

Symbol Name Price Change % Volume
RIO Rio Tinto Plc 42.93 -0.08 -0.19 2,422,714
TRQ Turquoise Hill Resources Ltd. 3.42 0.06 1.79 1,916,543
BHP BHP Billiton Limited 39.93 -0.12 -0.30 1,565,953
CHGS China GengSheng Minerals Inc 0.00 0.00 0.00 0

Comments

Emerging Growth

Enertopia Corp

Enertopia Corp is engaged in the exploration of lithium in Nevada, USA. The Company's project includes Central Nevada Lithium Brine Projects.

Private Markets

Trustify

Trustify provides trust and safety in both the digital and physical worlds through our vast network of on-demand Private Investigators.By removing the large retainers and high hourly rates that traditional…

WayBetter

The spark hit Jamie when he saw co-workers competing to lose weight. Instead of pizzas and subs, they were eating salads and jogging along the river. Some were sneakily leaving…