The Next Leg Higher in Gold (NYSE: KGC) (NYSE: NEM) (TSXV: DLTA) (OTC: GOLHF) (NYSE: AUY)
Gold has been one of the best performing assets on the planet over the past year, fueled by relentless currency debasement, stimulus, and economic and geopolitical volatility. However, over the past month, the yellow metal has pulled back into an interesting zone defined by its long-term 200-day moving average, which has been a good trailing support on a technical basis as it has trended higher over the past two years.
The key motivating factor behind the trend is the gradual contemplation of new monetary stimulus tools, including Modern Monetary Theory (or “MMT”) and the rapid rise in popularity of fiscal stimulus tactics during the pandemic. In both cases, the end result is likely to be gradual debasement, which tends to historically favor greater allocation to gold.
As such, we take a look at some of the most interesting and active stocks in the space, including: Kinross Gold Corporation (NYSE:KGC), Newmont Corporation (NYSE:NEM), Delta Resources Ltd (TSXV:DLTA) (OTC:GOLHF), and Yamana Gold Inc. (NYSE:AUY).
Kinross Gold Corporation (NYSE: KGC) is a big player in the space. The company engages in the acquisition, exploration, and development of gold properties principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania. It is also involved in the extraction and processing of gold-containing ores; reclamation of gold mining properties; and production and sale of silver.
As of December 31, 2019, its proven and probable mineral reserves included approximately 24.3 million ounces of gold, as well as 55.7 million ounces of silver.
Kinross Gold Corporation (NYSE: KGC) recently announced that it has entered into agreements to acquire a 70% interest in the high-quality Peak Gold project in Alaska from Royal Gold, Inc. and Contango ORE, Inc. (OTCQB:CTGO) for total cash consideration of $93.7 million. Kinross will have broad authority to construct and operate the Peak Gold project, with Contango retaining a 30% non-operating minority interest.
According to the release, the Peak Gold project is a relatively high-grade deposit with a large estimated resource base that is expected to commence production in 2024 as a low-cost, open pit mine. The project, which is located approximately 400 kilometers (250 miles) southeast of the Company’s Fort Knox mine, is a low-risk “tuck-in” to supplement Kinross’ existing Alaska operation. Kinross plans to process Peak Gold ore at Fort Knox and utilize the existing mill and infrastructure to benefit both the project and the mine.
And the stock has been acting well over recent days, up something like 5% in that time. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -11%.
Kinross Gold Corporation (NYSE: KGC) generated sales of $1.5B, according to information released in the company’s most recent quarterly financial report. That adds up to a sequential quarter-over-quarter growth rate of 8% on the top line. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.3B against $1.8B, respectively).
Newmont Corporation (NYSE: NEM) trumpets itself as the world’s leading gold company and a producer of copper, silver, zinc, and lead. The Company’s world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in North America, South America, Australia, and Africa.
Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social and governance practices. The Company is an industry leader in value creation, supported by robust safety standards, superior execution, and technical expertise.
Newmont Corporation (NYSE: NEM) most recently announced the successful completion of two key projects at its Musselwhite mine at Lake Opapimiskan, Ontario, Canada, with the full commissioning of the mine’s conveyor system and the material handling project.
“I am extremely proud of the work that has been completed by the team at Musselwhite to safely deliver these two critical projects, whilst managing through the unprecedented challenges caused by COVID-19,” said Newmont’s President and CEO Tom Palmer. “Musselwhite is an important part of our North America region, and with the commissioning of these two projects is positioned to contribute to Newmont’s portfolio for many years to come.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. NEM shares have been moving higher over the past week overall, pushing about 5% to the upside on above average trading volume. Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -10%.
Newmont Corporation (NYSE: NEM) pulled in sales of $3.1B in its last reported quarterly financials, representing top line growth of 15.3%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($5.1B against $2.7B).
Delta Resources Ltd (TSXV: DLTA) (OTC: GOLHF) is a more speculative name as a junior mining prospect, but has some interesting potential advantages coming together that the market may not have taken into account yet. GOLHF is currently focused on exploring its high-potential Delta-1 (Eureka) and Delta-2 projects respectively in the Thunder Bay area of Ontario and in the Chibougamau Mining Camp of Quebec while evaluating other projects in Canada deemed to have a strong potential for new discoveries. Delta owns a 100% interest in the Bellechasse-Timmins gold property and deposits located in the Beauce Region of Southeastern Quebec, Canada.
The Bellechasse-Timmins deposit contains a 43-101 compliant gold resource of 171,000 ounces at an average grade of 1.83 g/t gold in the indicated category and an additional 95,000 ounces at an average grade of 1.36 g/t gold in the inferred category. On July 3rd, 2020, Delta announced the sale of the Bellechasse-Timmins project to Yorkton Ventures Inc. for $1.7M payable over a period of 15 months following signing. The non-dilutive influx of capital will be directed on advancing the Delta-1 and Delta-2 projects.
Delta Resources Ltd (TSXV: DLTA) (OTC: GOLHF) most recently announced that it is nearing completion of its first phase of drilling at the Delta 2 project in Chibougamau, Quebec. During this first phase, 15 drill holes have been completed totalling 2,288 metres. The drill holes to date have been focussed on the southern portion of the property or otherwise referred to as the Snowfall gold-silver-copper occurrence. Drill results from the first phase of the campaign are not expected until the new year.
According to the release, the drill holes in the southern portion of the Delta-2 project consist of magmatic-hydrothermal gold deposits related to the La Dauversiere pluton, such as the Joe Mann past producer (1956-2007: 1.173 million ounces of gold at a grade of 8.26 g/t Au, 607,000 ounces of silver at 5 g/t Ag and 28.7 million pounds of copper at 0.25% Cu) (Source: Technical Report on the Joe Mann Mining Property dated January 11, 2016, prepared by Geologica Inc.).
If you’re long this stock, then you’re liking how the stock has responded to the announcement. GOLHF shares have been moving higher over the past week overall, pushing about 24% to the upside on above average trading volume.
Delta Resources Ltd (TSXV: DLTA) (OTC: GOLHF) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.7M against $303K).
Yamana Gold Inc. (NYSE: AUY) is a widely followed leader in the gold mining space. The company bills itself as a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina.
Yamana Gold plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.
Yamana Gold Inc. (NYSE: AUY) most recently announced that the Financial Conduct Authority has approved its Prospectus, which includes a Competent Person’s Report, in support of its intention to list on the London Stock Exchange. Application has been approved for admission of Yamana Gold’s common shares to the Standard Listing segment of the Official List of the FCA and to the LSE for trading on its Main Market for listed securities. According to the company, the stock will trading in London today (Tuesday, October 13, 2020).
Daniel Racine, President and Chief Executive Officer of Yamana Gold, commented, “We are excited to begin trading on the London Stock Exchange and offer UK and European investors exposure to a pure-play senior gold producer with a high-quality asset portfolio in mining-friendly jurisdictions in the Americas, offering a unique investment opportunity.”
If you’re long this stock, then you’re liking how the stock has responded to the announcement. AUY shares have been moving higher over the past week overall, pushing about 9% to the upside on above average trading volume.
Yamana Gold Inc. (NYSE: AUY) pulled in sales of $585.5M in its last reported quarterly financials, representing top line growth of 23.9%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($633.4M against $672.4M, respectively).
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