Gold Digger: Australia’s impressive gold haul on field and in the ground

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Mid-week, Australia broke its record for the biggest medal haul in one day at the Olympic Games – four gold and two bronze – and the fact that it came on a non-swimming finals day is just incredible.

• GOLD – Cycling, Men’s Team Pursuit
• GOLD – Men’s Skateboarding
• GOLD – Women’s Pole Vault
• GOLD – Sailing Men’s Dinghy
• BRONZE – Men’s Discus Throw
• BRONZE – Mixed Marathon Walk

And at Australia’s biggest mining conference, Kalgoorlie’s Diggers & Dealers, small and mid-cap ASX companies also won – with gold as the sector’s topic of the week.

Speaking to Stockhead, IG Markets analyst Hebe Chen says gold seems to always gain interest around the time of the Olympics, more often than not getting a bump in global markets and this July has been no different.

“The love for gold medals has seemingly spread into the investment markets, as the performance of gold, silver, and copper has been strictly tracking their order in the athletic field in the first week of the Paris Olympics,” Chen says.

“Furthermore, the demand for the currency has helped the EUR/USD climb up to its five-month high.”

• 1st week of Olympics
• Gold 2.31%
• Silver 2.24%
• Copper 0.52%
• EUR/USD :+0.51%

July hits record for bullion trade

Global physically-backed gold ETF’s have been up for now three consecutive months, with July seeing a huge rise, adding US$3.7bn in July.

A combination of the July inflow and a 4% rise in the gold price pushed total global assets under management 6% higher to US$246bn, a new month-end record, according to the World Gold Council.

Chen says what kept gold’s strong H1 performance going was the relentless waves of geopolitical tensions that have heightened the allure of gold as a sanctuary for wealth.

“Second, the insatiable appetite for gold is not just from retail traders and institutions; central banks are fervently endorsing it as a robust reserve asset amidst an increasingly intricate financial landscape,” Chen says.

“China, for instance, has hoarded gold to an all-time high in the second quarter of 2024. Similarly, central banks in India and Turkey are also eager buyers of the yellow metal.”

Gold outlook

Chen reckons the second half of the year is set to bring two key factors that could further fuel the heat in the gold market.

First, a projected weakening of the greenback is anticipated to enhance the allure of the yellow metal.

“Historically, during rate-cutting years over the past two decades, gold prices have risen by an average of 17%,” she says.

“Additionally, the potential upheaval in the political landscape surrounding the upcoming US election will provide another compelling reason to hold onto this precious metal tightly, thanks to its proven resilience during uncertain times.”

Winners & Losers

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Top ASX Stories this Week

The bell of the ball at this year’s Diggers & Dealers was Simon Lawson’s Spartan Resources (ASX:SPR), which which has proved up the 1.49Moz at 8.07g/t Never Never deposit at Dalgaranga in WA’s Mid West and recently been proving up the Pepper deposit next to it.

Takeover rumours by mid-tier gold miner Ramelius Resources (ASX:RMS) were quashed (for now) over the week, with RMS boss Mark Zeptner saying it’s “nice to have, not a must have”, despite the obvious synergies of plugging something thick and high-grade into its Murchison gold network just 65km from its Mt Magnet mill.

With a strong valuation of near $1.2bn and also boasting lower grade open pits and a mothballed 2.5Mtpa plant, the explorer has far outrun gold producers in its value uplift this year of  about +107%.

Lawson compared the excitement of the past year to the growth of Bill Beament’s Northern Star Resources (ASX:NST) seeing analogies between Dalgaranga and the ancient Mt Magnet field.

“I’ll make it as big as possible. And what I find really interesting, and I probably should have made the association up on the stage again, referring to Mount Magnet is not by mistake,” he said.

“It’s not a nearology thing. This is not an exploration thing. That’s a 6Moz system that’s had 100 years of work on it.

“We are almost 3Moz now at Dalgaranga, only 65km away, and it’s got exactly the same types of structure. So I don’t think there is a world where I would give it up unless we were rivalling that kind of size.”

Juniors Alto Metals (ASX:AME) and Brightstar Resources (ASX:BTR) announced a merger last week as the latter rattled the tin for $24m to grow the small-cap producer and take on Alto’s 1Moz Sandstone tenure in the WA Goldfields.

The 4:1 Alto scheme comes in the form of scrip equivalent to 6c in cash, 82% above Alto’s last closing price of 3.3c and 81% up on its 30-day VWAP.

Brightstar also picked up the Montague project from Gateway Mining (ASX:GML) recently in a $14m cash and scrip deal, the consolidated company will have three gold fields in its portfolio including a 1.5Moz hub at Sandstone with two smaller hubs around Laverton and Menzies.

Meanwhile Rumble Resources (ASX:RTR) announced the discovery of a new parallel high-grade gold system at Western Queen and adds even more impetus to the project’s growth prospects near Mt Magnet in Western Australia.

One drill hole returned 4m at 4.58% tungsten trioxide (WO3) and 0.72 grams per tonne (g/t) gold from 174.85m. That included 2.05m at 8.71% WO3 and 1.38 g/t gold from 176.85m, and 0.65m at 18.35% WO3 and 2.97 g/t gold from 176.85m.

Mt Malcolm Mines (ASX:M2M) reported excellent gold recovery results of 94.6% and gold tailings grades of between 1-3.5g/t gold at its Golden Crown prospect in WA, while Strickland Metals (ASX:STK) intersected a thick ~90m vein at 4g/t gold from the first drill hole at its Shanac deposit at Yandal.

At Stockhead we tell it like it is. While Brightstar Resources, Rumble Resources, Mt Malcolm Mines and Spartan Resources are Stockhead Advertisers, they did not sponsor this article.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

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