Gold is making gains and all-time highs are now within reach

Gold for June delivery is trading well above $US1,700 per ounce after breaking past the $US1,750 mark earlier this week on news that the US Federal Reserve has launched a $US2.3 trillion loan program to help small and medium-sized businesses weather the COVID-19 pandemic.

The contract price is currently at $US1,725, or about $2,711.63 thanks to the favourable US dollar to Australian dollar exchange rate.

Kitco News quoted Bank of America analysts as saying that while there was some indication that gold might be overbought, the bank was still expecting prices to hit new all-time highs if it pushes past the $US1,800 resistance point.

“Last week’s accommodative Federal Reserve announcement led gold futures to $US1,754. This confirmed a continuation head-and-shoulders pattern that targets $US1,852, possibly $US1,947,” the analysts added.

The high gold prices continue to be welcome by Australian companies, with Capricorn Metals (ASX:CMM) increasing reserves at its Karlawinda gold project by 35 per cent to 1.2 million contained ounces after carrying out drilling at the Bibra and Tramore deposits.

Increasing the reserve has also resulted in a reduction in the stripping ratio from 4.8 to 3.6, while the expected project life has increased from nine years to 12 years. Lower strip ratios mean less waste rock to move to get to the good stuff and hence lower cost mining.

Capricorn added that the updated estimate and complexity of geological domains in the reserve will deliver a block model that was more “fit for purpose” for the large-scale equipment and mining processes to be used in the open pit mine.

Overall resources have also been increased by 41 per cent to 86.7 million tonnes grading 0.8 grams per tonne (g/t), or just above 2.14 million ounces of contained gold.

These resources will be assessed for addition to the reserve once the project is operational and a steady state operating cost structure has been established.

Twenty Seven Co (ASX:TSC) has confirmed that its Creasy 1 discovery is a large, shallow mineralised gold system that extends for at least 1,500m strike after carrying out further drilling in March.

Results from the March program include 3m at 2.8g/t gold from 56m, 3m at 2.3g/t gold from 71m and 3m at 1.9g/t gold from 104m.

Further drilling will explore the extent of gold shoots along strike and down plunge while looking for potential repetitions at depth.

Meanwhile, NTM Gold (ASX:NTM) has acquired a 426sqkm tenement package that is adjacent to its Redcliff gold project from Kingwest Resources (ASX:KWR).

The Wells Group of projects contains the interpreted northern extension of the Mertondale shear and a number of prospective cross-cutting regional structures.

NTM noted that there had been very little previous on-ground exploration, which consisted primarily of modest soil sampling programs and limited early stage aircore drilling.

Over in Chile, Tesoro Resources’ (ASX:TSO) initial channel sampling at the Coquetas prospect has mapped out surface gold mineralisation over 750m of strike that correlates well with recent high-grade drill results.

Notable results from the channel sampling are 11m at 6.03g/t gold including 3m at 20.95g/t gold, 123m at 0.37g/t gold including 18m at 1.71g/t gold and 19m at 1.01g/t gold.

The company says the results demonstrate the scale and confirm the geological model for gold mineralisation at its El Zorro project.