The stock prices of precious-metals-producing mining companies over time move up and down as a result of earnings, and earnings are largely determined by the price of the commodity being mined and the cost of producing that commodity. For the first two quarters of 2008, the price (London Fix) of gold and silver being mined is reported in the following table for each quarter.

Mining companies are able to sustain earnings by increasing the amount of metal they control, and by increasing the efficiency of their mining and processing operations, which will result in increased production, which will increase earnings.

The reported 2006 reserve and production results of the 35 listed InsideMetals.com precious-metals-producing companies compared to their 2007 published results are reported in the table below:

The 15 companies listed on the New York Stock Exchange increased their gold reserves by 7%, their silver reserves by 53%, and depleted their platinum/palladium reserves by 8%. Two of these companies had gold reserve increases of greater than 50%, and one company had a silver reserve increase greater than 158%. In terms of production, five of these companies had production increases of greater than 40%.

The 15 companies listed on the American Stock Exchange increased their gold reserves by 7%, their silver reserves by 0.43%, and their platinum/palladium reserves decreased by 19%. Five of these companies had reserve increases of greater than 50%. Five of these AMEX companies had production increases greater than 58%.

The five companies listed on the NASDAQ had a decline in their gold reserves of -4%, and an increase in their silver reserves by 7%. One of the companies had a reserve decline of 28%. One silver company had a production increase of 31.6%.

How did these reserve and production increases, in an environment with a 3.1% decline in the gold price and a 2.9% decline in the silver price, affect the stock prices of these precious metals producers? The NYSE-listed company that posted the best stock price gain at the end of the second quarter was Goldcorp Inc. (NYSE: GG, Stock Forum), which increased its gold reserves by 9.1% to 43.4 million ounces, and increased its production by 40%, to 2.4 million ounces. The stock price of Goldcorp was up 14% in the second quarter.

NYSE-listed Gold Fields Ltd. (NYSE: GFI, Stock Forum) had an impressive reserve increase of 45%, from 63.1 million ounces of gold in 2006 to 91.6 million ounces as reported in their 2007 annual report, along with a 5% increase in production to 4.3 million ounces of gold. However, the stock price of Gold Fields declined 14%, as power problems in South Africa in 2008 increased costs and reduced production.

AMEX-listed Eldorado Gold Inc. (AMEX: EGO, Stock Forum) had a stock price increase of 16% as the company had been able to increase its reserves 13% and its production by 98%. Crystallex International Corp. (AMEX: KRY, Stock Forum) is an example of a company that increased its large reserve position by 20% in 2007 to approximately 17 million ounces, but had a significant decline in its stock price by 63% as the Venezuelan government has threatened the company's mining permits.

From the above examples, investors need to become aware of the importance of geopolitical stability and news that can influence the performance of their stocks. Stock price performance is more than reserve and production statistics. InsideMetals.com provides in its quarterly company profile updates on important news and comments that may affect the stock price performance of listed companies.