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2 gold stocks to shoot the lights out

gold coins

Gold stocks are lagging the market today as the price of the precious metal fell from a seven-week high in overnight trade.

But there’s life in the sector with two gold producers shooting out the lights in the face of the 0.13% slip in the S&P/ASX All Ords Gold Index (Index:^AXGD) (ASX:XGD), even as the broader market rallies 0.3% during lunch time trade.

The weak performance of the sector is driven by gold heavyweight Newcrest Mining Limited (ASX: NCM), which recovered from morning losses to trade marginally higher at $13.97. The ASX’s second-biggest gold producer Northern Star Resources Ltd (ASX: NST) has tumbled 3.75% to $2.31 on yesterday’s news that its chairman sold more than a third of his shares in the company due to “recent health concerns”.

On the flipside, the standout in the gold sector is St Barbara Limited (ASX: SBM) as its shares surged 15.9% to a one-year high of 25.5 cents after management reported record gold production in the March quarter of 111,288 ounces.

St Barbara’s cash balance surged 60% to $108 million at the end of March as a result of its strong production and management has lifted its 2014-15 production guidance to between 350,000 and 370,000 ounces from 320,000 to 345,000 ounces of gold.

The good result was driven by higher mined grade and increased productivity due to better management of underground waste.

March quarter production was well ahead of the previous record set in the December quarter when the miner produced 97,917 ounces of gold.

But St Barbara is not the only one delivering a solid production report. Ramelius Resources Limited (ASX: RMS) broke out of its recent trading range as it rallied 7.4%, or 1 cent, to 14.5 cents.

Ramelius allayed concerns about production issues when it reported near record production of 22,655 ounces of gold from its flagship Mt Magnet mine for the three months to end March.

The miner has been a big beneficiary of the falling Australian dollar and management is predicting that both cash cost and all-in-sustaining-cost will come in below management’s forecast of $1,000 and $1,100 an ounce, respectively.

Similar to St Barbara, Ramelius’ cash and gold on hand increased 45% to $35.8 million.

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Motley Fool contributor Brendon Lau doesn't owns shares mentioned in this article. Follow me on Twitter - https://twitter.com/brenlau

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 policyThis article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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