Investors in International Tower Hill Mines Ltd (NYSEMKT: THM) appear to be paying less attention to the company’s claims that its liquidity is in good position. The selloff in the stock seems to be anchored on more than the company deep losses for 1Q2016. The fading appetite for gold as oil prices recover and the Fed moves closer to raising interest rates seem to be taking a heavy toll on the stock as well.
International Tower Hill Mines Ltd (NYSEMKT: THM) is a miner with interest in gold. But demand for gold is waning as investors dump safe haven assets for riskier and yield bearing investments. Bonds and equities are seeing a steady rise in demand as recent data suggest that the U.S. economy may be ready for interest rate raise. For example, housing data for April showed strong demand for new homes.
Recovery in oil market
Oil prices have been rising in the recent times and it is another reason investors are shifting attention away from gold for equity and debt. For International Tower Hill Mines Ltd (NYSEMKT: THM), the stock may be feeling the heat of doused demand for gold. Recent data showed that the U.S. oil inventory have dropped significantly, boosting sentiment that the supply glut in the global market could ease faster than anticipated. Additionally, unfortunate events such as the wildfire in Canada’s oil belt and the violence in Nigeria’s oil region are expected to cool supply of fresh oil to the global market. The other reason for excitement in the oil market is the planned meeting of OPEC members for next month to discuss possible oil production freeze.
A victim of circumstances
Although International Tower Hill Mines Ltd (NYSEMKT: THM) has its company-specific challenges to put off investors, the stock appears to be a victim of circumstances as investors turn away from gold in favor of non-gold equities.
What happened to International Tower Hill Mines Ltd (NYSEMKT: THM) in 1Q2016?
International Tower Hill Mines Ltd (NYSEMKT: THM) posted a net loss of $2.5 million or $0.02 per share for 1Q2016. However, the management said that the $5.1 million cash balance they have will be enough to fund their activities through 2016.