SOURCE: Five Star Equities
NEW YORK, NY--(Marketwire - Jul 12, 2012) - Junior Miners have been hit hard in 2012 as gold prices have struggled to gain any upwards momentum. The Market Vectors Junior Gold Miners ETF (GDXJ) has fallen over 25 percent year-to-date. The industry in recent week has been a hotbed of acquisition speculation after Yamana Gold announced it had acquired Extorre Gold Mines Ltd. for $414 million, or $4.26 a share. Five Star Equities examines the outlook for companies in the Gold Industry and provides equity research on Jaguar Mining Inc. (NYSE: JAG) and Great Basin Gold Ltd. (NYSE: GBG)(TSX: GBG).
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Junior miners with quality mining projects have been attractive targets for major gold companies in 2012 as many juniors have seen share prices plummet due to poor market conditions. While Yamana Gold did pay a 68 percent premium for Extorre, shares of the company were trading as high as $15 last July.
"Part of it was market conditions, and part of it is the coincidence that we completed our due diligence and came to the conclusion that there was value in the asset and value in the purchase," Yamana chief executive Peter Marrone said in an interview.
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Jaguar Mining is a gold producer in Brazil with operations in a prolific greenstone belt in the state of Minas Gerais. Jaguar is also engaged in developing the Gurupi Project in the state of Maranhão. Based on its development plans, Jaguar is one of the fastest growing gold producers in Brazil. Shares of the company have fallen over 85 percent year-to-date.
Great Basin Gold Ltd. is currently focused on its two emerging flagship mines in the world's richest gold-producing regions, the Hollister gold mine located on the Carlin Trend in Nevada, USA and the Burnstone gold mine located in the Witwatersrand Basin goldfield of South Africa. Together, these operations comprise a total resource base of 23.4M Au oz. and 7.3M Au oz. reserves.
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