Gold 'ripe for a breakout higher': Carnavale, White Cliff swoop on deals

Gold had a steady start to the week, trading Monday at $US1,940/oz ($2,666/oz) as the market waits to hear from the US Federal Reserve and its monetary policy meeting in coming days.

Analysts at TD Securities said they expected the US central bank to confirm its looser monetary policy targeting a higher inflation rate, which could be good for gold prices.

“In this context, we argue that the trading set-up in precious metals is ripe for a breakout higher,” the analysts said in a report, according to Kitco news.

HSBC chief precious metals analyst James Steel backed that view, telling Kitco: “In the current environment of low interest rates holding a non-yielding asset like gold becomes more attractive.”

Meanwhile, seven of the world’s 10 largest gold miners have revised their 2020 production guidance to lower levels in the wake of the COVID-19 pandemic, Reuters reported.

The miners, including gold heavyweights Barrick Gold and Newmont, have trimmed their revised 2020 output by 7 per cent, according to company reports.

Carnavale expands Kookynie project footprint

Amid this continued boom in the gold market, a number of ASX companies announced they were working to secure gold tenements.

Carnavale Resources (ASX:CAV) is picking up a 6sqkm tenement located between its Kookynie gold project and Metalicity’s Leipold and McTavish projects.

The Kookynie gold mining camp has produced 650,000oz of gold since the 1890s, and the company’s new tenement abuts deposits being drilled by Metalicity (ASX:MCT).

“Our latest acquisition demonstrates the company’s strong belief in the prospectivity of the Kookynie area, targeting shallow high-grade gold mineralisation,” executive chairman Ron Gajewski said.

Metalicity has intersected high-grade lodes at Leipold, including 10m at 7.44 grams per tonne (g/t) gold from 108m.

White Cliff takes on Cue goldfields project

White Cliff Minerals (ASX:WCN) has acquired the Reedy South gold project in WA’s Cue goldfields, along the high-grade and prolific Reedy Shear zone that is host to Westgold Resources’ (ASX:WGX) Paddy’s Flat gold mine.

Commenting on the $850,000 acquisition, White Cliff technical director Ed Mead said: “We are looking forward to getting on the ground at Reedy South immediately in preparation for kicking off the company’s maiden drilling program in late-October.”

Consultancy firm Auralia Mining will complete a maiden JORC-compliant resource estimate for Reedy South, where historical drilling has returned high-grade intercepts from its Pegasus and King Cole prospects, including 7m at 10.6g/t from 30m.

Thred pivots to gold with three new WA projects

Media tech company Thred (ASX:THD) is moving into the gold space with the acquisition of three highly-prospective gold exploration projects in WA from PVW Resources.

Thred has engaged corporate adviser CPS Capital for the acquisition and it will lead a capital raising of $2.5m. The deal will give PVW Resources 38.3 per cent ownership of Thred.

The three projects — Kalgoorlie, Leonora and Tanami — cover a combined 11,572sqkm.

Thred is to spend $3m on drilling and geological studies for the three projects.

The Leonora project is located in the Mt Magnet mineral field of WA and is surrounded by a number of mines including Saracen Minerals’ (ASX:SAR) Thunderbox and St Barbara’s (ASX:SBM) Leonora operation.

The Kalgoorlie project is 15km north of the town, and the Golden Cities and Federal open cut gold mines are to the north of the project.

On completion of the acquisition, Thred is proposing to change its name to PVW Resources.