Gold Digger: Buffett’s big Barrick bet bolsters believers
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The gold price may be taking a breather in the $US1,900/oz’s, but moves by legendary investor Warren Buffett indicate this could be a temporary blip.
Experts believe Berkshire Hathaway’s recent investment in Canadian gold miner Barrick shows Buffett is taking steps to protect his other investments from inflation.
“Berkshire Hathaway, in taking a stake in Barrick Gold, is an apparent about-face on his previous view on the commodity, and it implies he is positive on inflation expectations. Gold ultimately is an inflation hedge,” Ausbil global resources fund portfolio manager Luke Smith said.
In terms of the best bang for an investor’s buck, gold equities tend to do better than physical gold in a bullish gold environment.
“Gold equities perform better than direct investments in gold through bull cycles, and we are likely to see ongoing interest in gold equities,” Smith said.
And there’s more good news for explorers — major miners are running out of gold reserves, which could lead to increased merger and acquisition activity.
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Here’s how ASX-listed gold stocks performed for the period August 31–September 04 [intraday]:
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Strong news flow is still being rewarded by investors.
Ardiden (ASX:ADV) has hit visible gold in its very first drillhole at the Kasagiminnis deposit, part of the Pickle Lake project in Ontario.
Here’s what that looks like:
A landmark acquisition deal could instantly transform Mali Lithium (ASX:MLL) into a cash-generating gold producer. The acquisition of 80 per cent of the Morila gold mine in southwest Mali for $US22-27m saw shares jump +50 per cent for the week.
Sabre Resources (ASX:SBR) reckons the quality of early stage aeromagnetic survey data at its Bonanza gold project is “better than expected”. “Significantly, it has indicated the presence of west-northwest trending structures that may represent fault splays off the Youanmi Fault Zone that hosts the Penny West Mine,” Sabre says.
With ~$15m in the bank, Nova Minerals (ASX:NVA) is now fully funded to add ounces and fast-track development of the 2.5 million ounce Estelle gold project in Alaska.
The bidding war for 5.1moz gold project developer Cardinal Resources (ASX:CDV) continues to heat up, with Russian suitor Nordgold now increasing its offer price from 66c to 90c per share. This is a substantial step up from the most recent 70c per share all-cash offer from major Chinese gold producer Shandong Gold Mining, and an even bigger step up from Nordgold’s initial ~45c offer, first announced in March.
High flying gold explorer De Grey Mining (ASX:DEG) has made a new discovery at the mammoth Hemi project in the Pilbara. Initial drill results for the ‘Falcon’ deposit include 21m at 3.4 grams per tonne for gold from 40m, and 19m at 2.1 g/t gold from 68m.
And Cauldron Energy (ASX:CXU) has dusted off a “forest of data” from the historic Blackwood project joint venture in Victoria which reveals high-grade gold zones outside the historic mining areas. Blackwood could host multiple high-grade gold systems, Cauldron says.