Gold Digger: Investors are dipping a toe into gold stocks ahead of anticipated bull run
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Our Gold Digger column wraps all the news driving ASX stocks with exposure to precious metals.
Confidence is slowly returning to stock markets after a few days without a bank sell-off. Still, the underlying vulnerabilities remain, and gold, as an investment safe haven, remains poised to scale record highs.
“Gold has given back a small portion of its recent gains, but it continues to trade not far from the highs of the last couple of weeks,” OANDA analyst Craig Erlam says.
“The reason for that is interest rates; expectations have not changed that much since the banking turmoil which suggests investors see scarring in credit markets that will do the Fed’s job for it and maybe even tip the economy into recession, requiring multiple rate cuts later in the year.
“This is positive for the yellow metal and could ultimately prove to be the catalyst that not only enables it to overcome the $2,000 psychological barrier but also eye up the all-time highs near $2,070.”
In Friday arvo trade, gold is paying $US1981/oz, or $2948/oz Aussie.
Silver is trading at $US23.91/oz, or $35.60/oz Aussie.
A strong week for most large and mid-cap gold stocks on the ASX. All top 15 stocks by market capitalisation gained between 2- 20% for an average of 8%.
Leading the pack was mid-tier miner Regis Resources’ (ASX:RRL), which finally received approval from the New South Wales Independent Planning Commission to build the 2Moz McPhillamys gold project.
It comes a long four years after RRL kickstarted the approval process for the project, 250km west of Sydney.
“McPhillamys is one of Australia’s largest undeveloped open-pittable gold resources and underpins significant value potential for Regis,” managing director Jim Beyer says
“We anticipate a response on the Federal Section 10 application shortly and will now incorporate the approval conditions into the finalised feasibility study, complete the funding strategy for the Project and expect announcing further developments late in 2023.”
Regis is on track to produce 450-500,000oz in 2022-23, with all-in sustaining costs at the upper end of its $1525-1625/oz guidance range.
RMS, which has blazed a trail of acquisitions over the past few years, has moved early to add scale with BRB’s Lake Roe gold project (32Mt at 1.6g/t for 1.7Moz) east of Kalgoorlie.
RMS managing director Mark Zeptner told analysts and investors last week the Lake Roe acquisition could materially increase the life of a future operation at the nearby ‘Lake Rebecca’, which it acquired via its $181m takeover of Apollo a few years back.
“We’ve talked publicly about a minimum production profile of a million ounces, 10 years at 100(000oz),” he said.
“And we believe that Rebecca can deliver that.
“Obviously adding Lake Roe probably doesn’t increase that production rate.
“But ideally, (it) increases the longevity of the project, and just makes it that much more robust. Ultimately, the studies that we’re in, and we’ll consider what that means for the current studies, will tell us the answers in time.”
Here’s how ASX-listed precious metals stocks are performing:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop.
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