Money Talks: Gold is heading to $US2000/oz. Here’s three for free (you’re welcome)
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Stockhead taps our extensive list of experts in Money Talks, a regular drill down into the sectors and companies that investors have their eye on right now.
Who wants three for free? Our expert has his eye on an overlooked Brazilian project developer, a large cap West African miner, and an explorer with plans to resurrect a historic Canadian gold field.
Stuart Roberts, co-founder of Sydney-based Pitt Street Research, still believes gold will keep rising to hit $US2,000/oz (~$3,850/oz) at some point in 2020.
He’s not alone here — AngloGold Ashanti boss Kelvin Dushnisky said the same thing earlier this week.
“Gold won’t go down until you see interest rates going up; and I don’t see that happening anytime soon,” Roberts says.
Market Cap: ~$37m
Brazil-focused project developer Big River is a forgotten gem, says Roberts.
The explorer — formerly Crusader Resources — had been struggling to get its multi-million-ounce Borborema gold project off the ground for years.
“Investors have a habit of getting tired of stories; and Big River was one of those [‘tired’ stories],” Roberts says.
In 2019, new management refocused and recapitalised the company.
“What I like is they are coming in with a very reasonable all in sustaining cost (AISC) of about $US840/oz.”
Market Cap: $1.2bn
“And these companies still get the ‘Africa discount’, where assets are priced below the equivalent in ‘safe’ jurisdictions like our own,” Roberts says.
“My argument is that the ‘Africa discount’ is lessening.”
Perseus Mining’s Yaouré development project in Côte d’Ivoire — the company’s third mine in West Africa — is on target for first gold pour in December, subject to no COVID-19 related delays.
~260,000oz-per-annum (ozpa) Perseus wants to be a 500,000ozpa producer by FY2022.
“That stock is recovering quite nicely from the COVID-19 crisis, and people are expecting quite good things from [Yaouré],” Roberts says.
Market Cap: ~$71m
Auteco is a ‘battery metals turned goldie’ success story.
The exploration stock is up ~500 per cent since ditching vanadium to buy a historic 1.5-million-ounce Canadian gold project called Pickle Crow in January this year.
“Auteco has run pretty hard,” Roberts says.
“It’s interesting because this was a mine last worked in the 1960s when the average head grade was 9 grams per tonne.
“When a field has stayed idle for that long there’s going to be a lot of juicy stuff in the neighbourhood.”
Roberts says someone said to him a while back that ‘the only thing you could raise money on in Canada was dope and blockchain’.
“But that has changed – gold heading to $US2,000/oz has resurrected a whole bunch of interesting fields,” he says.
“So, watch out for anything going in Canada, especially the more mining friendly provinces.”