Gold Digger: This is how a feeble Aussie dollar benefits our local producers
Global markets continued their fall into oblivion. Meanwhile ASX-listed goldies fared slightly better than the average, following a horror week which was truly abysmal for everyone involved.
If you’re an Australia-based producer you now have the added benefit of a super weak dollar, which is currently a lowly 58c versus the benchmark US dollar.
That means that while gold itself slipped for a second straight week in US dollar terms, it actually increased in real terms for local gold producers:
Here’s how ASX gold stocks performed for the period March 17 — March 23 [intraday]:
Scroll or swipe to reveal table. Click headings to sort. Best viewed on a laptop:
Our #1 mover was popular explorer Chalice Gold Mines (ASX:CHN), up an incredible 137 per cent yesterday after confirming a super interesting nickel discovery at a non-core WA project.
The first drill hole at the Julimar project – which covers the entirety of a ~26km by 7km target which has never been explored for nickel – hit a massive sulphide zone grading 13m at 3.15 per cent nickel, 1.19 per cent copper, 8.85 grams per tonne (g/t) palladium and 1.09g/t platinum.
And with ~$23m in the bank, Chalice can comfortably continue to explore Julimar – as a well as its flagship Pyramid Hill gold project in Victoria – regardless of any sh*#@y global market conditions.
Southern Gold (ASX:SAU) somehow moved higher after a $10m cap raise at 14c was replaced with a $4m raise at 10c. But in the current market, ‘(any) cash is king’.
“We are in unprecedented markets – perhaps a one in 100-year event – and this has clearly had an impact on our ability to execute the original equity raising,” Southern Gold managing director Simon Mitchell says.
“However, it is times like these that good supportive major shareholders, a solid new cornerstone investor such as Metal Tiger PLC and the backing of an excellent broker in Ashanti Capital, have all contributed to pulling together $4m in the most difficult of markets.
“While we will be prudent with expenditure going forward, the raising enables Southern Gold to continue to maintain momentum in our field programs and drilling, perhaps the most critical factor in a junior explorer’s ability to survive downturns.”
And Kalgoorlie-based explorer Lefroy (ASX:LEX) moved 35 per cent higher after it kicked off drilling at the Red Dale prospect.
Lefroy believes this shallow resource hasn’t travelled far – which means a larger bedrock gold source could be somewhere close by.
The drilling program is expected to be completed this month, Lefroy says, with results anticipated in April.