Reports from Citi earlier this year suggested that the firm believes higher gold prices are in store for investors. Market “jitters” could bring investors to put more money into safe-haven assets. Obviously, gold would be a potential way for investors to hedge risks to the downside. As all investors know, gold is the classic hedge against equity volatility and general fears about economic stability.
In the short-term, Citi increased its 6-12 month target on gold to $1,700 per ounce. In addition, it gave a 12-24 month outlook of $2,000/ounce.
Investment demand for gold continues to be strong. There could be more room for the mining stocks to rally since their profits are leveraged to gold prices.
Gold stocks has already started showing great momentum and will likely continue this week as well. Due to this impressive rally in the gold, it could be worthwhile for investors to have a look at Newmont Corporation (NYSE: NEM) and NQ Minerals PLC (OTC: NQMLF).
Newmont Corporation (NYSE: NEM) focus on key growth projects, disciplined capital allocation strategy and higher gold prices are some major factors driving the stock.
The company is expected to benefit from the progress of its key growth projects, including Tanami Expansion in Australia as well as Subika Underground and Ahafo mill expansion in Africa.
Newmont’s Africa operations witnessed 1.1 million ounces of attributable gold production in 2019 at an all-in sustaining cost of less than $800 per ounce. This was mainly driven by the successful completion of Ahafo’s expansion projects. The mine is expected to add annual gold production of 75,000-100,000 ounces per year from 2020 to 2024.
Notably, the company’s first-quarter attributable production in the North America and South America soared 364% and 27% year over year, respectively.
Newmont’s disciplined capital allocation strategy is likely to strengthen its investment-grade balance sheet along with enabling investment in high-return projects and returning excess cash to shareholders.
NQ Minerals PLC (OTC: NQMLF) recently announced that the Tasmanian Government has now formally transferred the Mining Lease ML 1767 P/M, that covers the Beaconsfield Gold Mine, to NQ’s 100% subsidiary Pieman Resources Pty Ltd.
The companys operations are in Australia. NQ commenced base metal and precious metal production in 2018 at its 100% owned flagship Hellyer Gold Mine in Tasmania. Hellyer has a published JORC compliant Mineral Resource estimated at 9.25 Mt which is host to Gold at 2.57 g/t Au for 764,300 oz Au, Silver at 92 g/t Ag for 27,360,300 oz Ag, Lead at 2.99% Pb for 276,600 tonnes and Zinc at 2.57% Zn for 217,400 tonnes. In addition to these resources, the Hellyer assets include a large mill facility and full supporting infrastructure, including a direct rail line to port. The Company is also planning to re-open the historic high-grade Beaconsfield Gold Mine in Tasmania, which has a JORC (2012) compliant Mineral Resource Estimate of 1.454 Mt at 10.3 g/t Au for 483,000 ounces of gold. Regular updates on the progress of the Hellyer Gold Mine and Beaconsfield can be viewed on NQ’s website at www.nqminerals.com.
The Beaconsfield Gold Mine has historic recorded production of c.1.8 million ounces of gold averaging c.15 grams per tonne (c.½ ounce per tonne). The Company plans to re-open the mine as soon as practicably possible.
On May 7, 2020, NQ also announced a new JORC (2012) compliant Mineral Resource Estimate of the lower section of the Beaconsfield Gold Mine of 1.454 million tonnes grading 10.3 grams per tonne (g/t) for 483,000 ounces of gold. Significant additional gold potential is still to be assessed in the upper section of the old Beaconsfield Mine workings, plus the orebody remains open at depth.