Aussie goldies take on the US and draw major eyes

• Two of the world’s biggest gold conferences have just wrapped up in Colorado
• They featured a record contingent of Australian producers, developers and explorers
• Euroz Hartleys analyst Kyle De Souza shares his view on the themes and stocks to watch

The gold price touched a new record high this week of more than US$3700 an ounce, which was great timing given it coincided with two of the biggest precious metals gatherings in the world.

Last week’s Precious Metals Summit in Beaver Creek, Colorado, and this week’s Mining Forum Americas (also known as the Denver Gold Forum) in Colorado Springs, Colorado, attracted the largest-ever contingent of Australian producers, developers and explorers, as well as a big turn-out of Aussie bankers, analysts and fund managers.

Perth-based Euroz Hartleys analyst Kyle De Souza was at both events and sees more upside for the sector.

“There were a couple of generalists at both Beaver Creek and Denver Gold Forum, but broadly speaking, the generalists and the big money have not arrived into the gold trade as yet,” he told Stockhead.

“This suggests to us there could be much more in the tank for gold.”

One general observation from participants at the conferences was that the ASX stocks are more expensive than their Canadian counterparts.

De Souza said sentiment was starting to improve in North America as long-struggling TSX-listed companies start to attract some interest.

“It is clear there is a value discrepancy between Australian and Canadian listed companies, with ASX listed producers in particular rewarded for free cashflow,” he said.

“Some Australian producers are valued more than others. Whilst ‘management premium’ gets tossed around a lot for some – we think companies with disciplined capital allocation, (who) deliver to guidance and (have) adequate downside protection will always perform better.

“Australia’s superannuation sector and index hugging is supporting the elevated valuations of precious metals through passive flows like ETFs.

“It’s a self-fulfilling prophecy that as companies shift up the index, it creates opportunities for capital rotation. If a fund can only invest ex-ASX 100, and a company they are holding moves into the ASX 100, they have to sell it and buy something else, so we are seeing a ‘cascade’ effect which is now reaching the explorers.”

Time is right

A bunch of Australian juniors made their first appearance at one or both of the conferences, including Brightstar Resources (ASX:BTR), Astral Resources (ASX:AAR), Waratah Minerals (ASX:WTM), Minerals 260 (ASX:MI6), Vertex Minerals (ASX:VTX) and Tesoro Gold (ASX:TSO).

For Waratah, it marked the company’s first offshore trip.

Waratah chairman Andrew Stewart told Stockhead the company had back-to-back meetings at Beaver Creek, while its attendance at the more producer-focused Mining Forum Americas was about raising awareness.

The company was building on the buzz it generated at last month’s Diggers & Dealers Mining Forum in Kalgoorlie, when it reported a drill hit of 208.7m at 1.17 grams per tonne gold from 514m, including 89m at 1.96g/t gold, including 38m at 3.61g/t gold at the Spur gold project in New South Wales.

Waratah was able to raise $30 million off the back of the result and Stewart said the company had met some of the investors who had backed the raising for the first time during the trip.

Unlike some other conferences, he said the company was meeting with decision-makers from large investment groups.

“I think because it is a little bit selective, and they select the better exploration groups to get in there, that means that you know some of the decision makers from those investors are there, so I think that’s the opportunity,” Stewart said.

Full dance card

Other Australian companies, including Bellevue Gold (ASX:BGL) and Brightstar, reported lots of investor interest and a full schedule of meetings.

“Australian developers Astral Resources, Ausgold (ASX:AUC), Santana Minerals (ASX:SMI) and Rox Resources (ASX:RXL) were getting a lot of attention noting they are the only assets capable of delivering over 100,000 ounces per annum for 10 years,” De Souza said.

One theme of Beaver Creek was that with more money flowing into explorers, it could lead to an uptick in discoveries.

The market is rewarding big discoveries, including Canada’s Snowline Gold and Rupert Resources.

“We could not find a discovery as exciting as Benz Mining Corp’s (ASX:BNZ) Glenburgh project,” De Souza said.

While Benz didn’t make the trip to the US, it has generated interest lately and De Souza believes it may have found the next Tropicana on granted mining permits.

De Souza, meanwhile, noted that silver was the one commodity that traded at a higher valuation in North America.

“We think that the ASX is slowly starting to understand the most conductive metal on the planet and its industrial application in solar panels, medical, and advanced AI technology,” he said.

Following the takeover of Adriatic Metals, De Souza noted Andean Silver (ASX:ASL) had seen strong momentum and was likely the next ASX-listed silver producer.

Other silver stocks to attend one or both of the conferences was near-term producer Silver Mines (ASX:SVL) , Nevada-focused Sun Silver (ASX:SS1) and Mexican explorer Mithril Silver and Gold (ASX:MTH).

Copper-gold explorer Cygnus Metals (ASX:CY5) was another debutante presenter at Beaver Creek last week and it’s a stock De Souza is paying close attention to following a 78% increase in its Chibougamau resource.

“Agnico Eagle, IAMGOLD and Superior Resources are operating to the southwest of CY5 and it is very clear to us there is a bigger consolidation opportunity here in an area which has produced 3.5Moz gold and 1Mt of copper,” he said.

At Stockhead, we tell it like it is. While Ausgold, Brightstar Resources, Waratah Minerals, Astral Resources and Vertex Minerals are Stockhead advertisers, they did not sponsor this article.