Ground Breakers: Emerald continues to sparkle, Red 5 eyes top of guidance

Gold price to hit US$2200-2400/oz during next leg up: analyst Dave Brady
One of the ASX’s best goldies Emerald on track to hit FY24 guidance of 100,000oz at US$780 – US$850/oz AISC
Red 5 also expects to hit top end of FY24 guidance of 195,000 – 215,000oz

Precious metals are about to hit their new lows, says analyst and gold bug David Brady – the next move will be a ride to US$2200-US$2400/oz.

“Ideal conditions were in place two weeks ago for a big drop in gold and silver, and they have not disappointed,” he writes for Sprott Money.

“In fact, both continue to fall. On the bright side, we are fast approaching my targets for the bottom in both metals at lower lows around 1920-50 in gold and 21-22 in silver.”

Brady says when we hit these next lower lows, they will be ‘THE LOWS’.

“Emphasizing my degree of conviction, I plan to go all-in when we hit bottom in Gold, Silver, and the miners, then just let it ride to 2200-2400 in Gold, 30 in Silver, and ~40 in GDX or higher next,” he says.

Gold is currently paying US$2046/oz, or $3041/oz in local money.

Emerald continues to sparkle, Red 5 eyes top of guidance

One of the ASX’s top performing gold producers Emerald Resources (ASX:EMR) remains on track to hit FY24 guidance of 100,000oz at US$780-US$850/oz all in sustaining costs.

It produced over 29,000oz in the December quarter — the upper end of guidance between 25-30,000oz — from Okvau in Cambodia, one of the world’s highest margin gold mines.

It represents another strong result from the $1.9bn capped ASX standout, which is up 140% over the past 12 months.

The company now has $137.8m in cash and bullion.

EMR deftly evaded problems plaguing other gold companies during ramp up, and now plans to become a multi-mine 300,000ozpa producer via the Mermot (Cambodia) and North Laverton (Australia) projects.

Speaking of ramp up problems — Tietto (ASX:TIE) produced a record 13,700oz in December from its flagship Abujar gold mine in Côte d’Ivoire.

Tietto – which is fighting off an “opportunistic” takeover from Chinese goldie Zhaojin – previously knocked down guidance at stuttering Abujar to 65,000-75,000oz for the second half of 2023.

The mine had initially been forecast to produce as much as 120,000oz for H2 back in July.

TIE, which is down ~30% over the past 12 months, says it expects to reach a revised full production capacity of ~170,000ozpa in H1 2024.

Goldfields miner Red 5 (ASX:RED) expects to hit top end of FY24 guidance of 195,000–215,000oz after producing 108,026oz for the first half.

It sold 53,087oz in the December quarter at an average realised price of $2,619/oz.

While cost haven’t been released yet, this gives it a nice margin at expected FY24 AISC of $1,850-$2,100/oz.

Importantly, RED’s combined cash and bullion stash increased to $53m in the December quarter. Its net debt position was slashed by $18.6m to $49.6m.

Pantoro (ASX:PNR) produced 18,185oz during the quarter, representing a 275% increase since the first quarter of 2023.

PNR sold over 18,000oz for the quarter at an average price of $3054/oz. Like the previous quarter, it has not yet divulged all-important AISC.

But cash in bank increased from $30 to $50m from the previous three months and the outlook looks pretty good, PNR says.

“The Norseman processing plant is operating above nameplate capacity with quarterly throughput of 271,893 tonnes @ 2.24g/t and 92.8% recovery,” it says.

“Grades are expected to continue to increase as the Scotia open pit depth increases during the 2024 calendar year.”

PNR has production guidance of 100,000oz for FY24 @ AISC of $1,900/oz.