Gold Digger: Investing in gold stocks is good business
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Investing in ASX-listed goldies has been lucrative over the past 12 months. Thirty eight of the 141 gold stocks on our list have made gains of over 100 per cent, with 18 of those up by over 200 per cent.
All up, 98 out of a total 141 stocks are winners over the past year. Just 40 are in the red.
And the bullion wagon could keep rolling toward that $US1,800/oz mark as the US Fed Reserve paints a gloomy picture for the world’s #1 economy.
If you think the Fed staying at zero rates until 2022 is a sign of a V shaped economic recovery I have some million dollar tulips to sell to you.
— Sven Henrich (@NorthmanTrader) June 11, 2020
That’s good for gold as a ’safe haven’ investment – especially Powell’s decision to leave interest rates alone until the end of 2022. History tells us that gold has typically delivered strong returns when real rates have been low.
Here’s how ASX-listed gold stocks performed for the period June 08–12 [intraday]:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:
GULLEWA (ASX:GUL) +69%
Market Cap: ~$10.5m
Gullewa is a low-profile exploration company which holds shares in other gold explorers.
The stock moved higher this week after TSX-listed Central Iron Ore – of which it owns 36.7 per cent – released an “outstanding” drill result from its South Darlot gold project JV with Red 5 (ASX:RED).
Significant gold intercepts, including 1.6m grading 124.4 grams per tonne (g/t), sent Central Iron Ore’s TSX shares rocketing from 2 Canadian cents to 16.5 Canadian cents.
Gullewa also has a 1 per cent royalty on a WA gold mine called Deflector, owned by Silver Lake Resources (ASX:SLR). In FY19, the minnow received a handy ~$1.67m in royalty payments from Deflector production.
Gullewa – which is up 244 per cent over the past year – jumped in February after Silver Lake announced some spectacular drilling results which could potentially boost mineral resources.
Market Cap: ~$740m
This old chestnut. De Grey has uncovered more broad, high-grade extensions at the Hemi gold discovery including 41m grading 6.8g/t.
That’s thick and high grade.
This zone of high-grade gold, called Aquila, remains open at depth and along strike to the east, meaning De Grey still hasn’t hit the edges of this large structure.
This time last year De Grey shares we worth 9c for a market cap of about $38m.
Hemi – a brand new type of gold deposit in the Mallina Province of WA – has since sparked a ~700 per cent increase in the explorer’s share price.
Market Cap: ~$7.8m
This Argentinean lithium-gold play is spreading its wings, announcing this week it was running the ruler over some new gold and tungsten projects in Finland and Sweden.
At the Tampere permits in Finland, previous drilling returned numerous thick, shallow and high-grade intersections like 11.5m grading 19.4g/t, 30.6m from surface.
Following a capital raise, Dark Horse will commence a “complementary” drilling program to test these results reported by project vendor Sotkamo.
Gold opportunities in other favourable mining jurisdictions are also being considered for acquisition, the company says.
Market Cap: ~$11.9m
One of De Grey’s close neighbours in the Mallina Province of WA.
“We are looking for certain things, similar looking targets in the geophysics to Hemi,” Golden State managing director Mike Moore says.
“We are also looking for intrusives and good structure – and these [drilling] targets tick those boxes.”
DGO GOLD (ASX:DGO) +39%
Market Cap: ~$120m
DGO not only holds exploration ground near Hemi – it is also one of De Grey’s largest shareholders.
In early June the explorer said a maiden drilling program at a project near Hemi had failed to hit any “ore grade gold intersections”. But there’s still hope.
“Analysis of De Grey’s Hemi results shows that gold mineralisation is best developed at depths greater than DGO drilled and that the current size of Hemi could fit between DGO’s first pass line spacing,” DGO exec chairman Eduard Eshuys says.
“DGO continues to be excited about the potential for a significant discovery at Mallina.”