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Monday, August 10, 2020

3 Gold Stocks Weathering The Coronavirus Storm Right Now

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Now the coronavirus has scrambled the outlook for the economy and Fed policy for at least the first half of 2020 and If the virus continues to disrupt the global economy, the price of gold could continue to gather steam.

Gold futures settled with a loss on Friday but still scored the biggest weekly rise in more than 11 years in a rebound fueled in part by a weaker U.S. dollar and concerns about disruptions in the physical market for the precious metal.

“Part of gold’s weekly advance is “explained by the thinning physical supply as refineries slowed or ceased activity due to the coronavirus shutdowns,” said Ipek Ozkardeskaya, senior analyst at Swissquote Bank, in a note.

“Gold will resume its role as a favored safe-haven as traders begin to try to model how bad the global economy will get and knowing that governments and central banks are doing everything they can,” said Edward Moya, senior market analyst at Oanda.

Is your portfolio as good as gold? The precious metal has gained in price this year, as the coronavirus epidemic hit economies hard and investors went seeking a safe store of value.

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), Brookmount Explorations, Inc. (OTC: BMXI) and Barrick Gold (NYSE: GOLD).

Newmont Corporation (NYSE: NEM) Vice President of the Sustainability and External Relations at Newmont Mining Corporation Nicholas Cotts affirmed his company’s desire to participate in the upcoming bidding for gold in Egypt.

This came during a discussion session held by the Egyptian Minister of Petroleum Tarek El-Molla, with Cotts, according to a statement of the Egyptian Ministry of Petroleum. The company has the largest proven gold reserves in the world and is one of the largest companies owning mines in the world The two sides reviewed areas proposed for the tender, as well as the new financial system to motivate investors to pump more investments into the Egyptian mining sector.

Newmont Corporation is the world’s largest gold mining company. It’s based in Greenwood Village, Colorado, and USA.

Another Gold stock to consider is Brookmount Explorations Inc. (OTC: BMXI), the company currently owns and operates two gold production facilities in Northern Indonesia and is also in the process of reviewing acquisitions of additional operations in Indonesia and the Philippines. The Company’s existing operations comprise of two key sites:

The first facility is a 50 hectare reserve and onsite processing facility located in a high grade volcanic hosted sediment body in the district of Talawaan, adjacent to the airport at Manado, regional capital. This facility, which has been in operation for 4 years, comprises ball mills (ore crushers), 5 high capacity floatation tanks, tailing ponds and off site smelting operations. Ore is excavated from strategic locations on the property based on existing ore distribution data as well as onsite drill tests. Geologist estimates put remaining reserves at over 2 tonnes (70,000oz) or approx. $180mm at current gold prices.

The facility also processes ore from 3rd party mining operations on a contract basis contributing up to 35% of monthly revenue. The operation has been cash flow positive since the beginning of 2018 and generated revenue of over $3mm in the first 3 quarters of 2019, with net earnings in excess of $1.2mm.”

A  second site west of Manado with 2 contiguous areas totalling approximately 17 HA of high grade volcanic hosted ore has also begun production  Average ore grade of this property is in excess of 1.5g/tonne. In conjunction with its Taiwanese operating partner at this facility and at a cost of over $500k, the Company has recently completed construction of state of the art heap leaching facilities on this site, comprising a 25,000 tonne leach pad, together with associated infrastructure and has recently commenced processing operations at this site.

Brookmount’s shares are up 100% YTD (Year-to-date) and given the current momentum, you can expect higher highs.

Barrick Gold (NYSE: GOLD), the world’s second largest gold miner, has unveiled a 10-year production plan aimed at becoming the most valued bullion company. 

The strategy, outlined in its first annual report since its merger with Randgold Resources, includes boosting Barrick’s production to about 5 million ounces of gold a year, with the bulk coming from its North American operations. 

President and chief executive officer, Mark Bristow, said Nevada Gold Mines — its recent joint venture with Newmont (NYSE: NEM) — would be the “value foundation” of its business moving forward.

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