A large chunk of ASX-listed gold stocks have lost ground in the past four months as the strengthening US dollar put pressure on the price of the precious metal – but some analysts see this as a buying opportunity.

The price of gold fell below $US1160 ($1597) an ounce late last week —  its lowest point in 19 months — before recovering slightly to trade at around $1190 an ounce.

The gold price is down about 12 per cent since April (see graph below).

This uncertainty has seen roughly 70 per cent of the 170 or so ASX-listed gold stocks tumble between 3 and 73 per cent in the past four months, compared to about 46 per cent over the past year.

>> Scroll down for a list of ASX stocks with gold exposure, courtesy of leading ASX data provider MakCorp

Blackstone Minerals (ASX:BSX), which has gold projects in Western Australia, has felt the most pain, with a 72 per cent drop in its share price since April.

Anova Metals (ASX:AWV) has slipped 68 per cent, Alicanto Minerals (ASX:AQI) is down 64 per cent and Aruma Resources (ASX:AAJ) has fallen 61 per cent.

While gold is traditionally the safe-haven investment when geopolitical tensions cause concern, investors have been increasingly flocking to the US dollar following threats of interest rate hikes.

“Given the current trade war ructions that have been generated by Donald Trump, the investors are obviously spooked by that,” expert resources analyst Gavin Wendt told Stockhead.

“I know the US markets have gone to new highs, but generally markets are quite concerned at the knock-on effects from trade — and what they’ve effectively done is they’ve chosen the US dollar as the go-to safe-haven.

“That probably ties in with the fact that there’s already some existing momentum there in the market from the point of view of interest rate rises.”

The US dollar gold price has been hit harder than the Aussie dollar gold price, but ASX-listed stocks are still feeling the pinch.

The gold price has fallen about 12 per cent since April. Is it time to buy?
The gold price has fallen about 12 per cent since April. Is it time to buy?

“In May the gold price was $US1360 and that’s come off by $US200 in the best part of three months,” Argonaut mining analyst James Wilson told Stockhead.

“The Aussie dollar gold price has really only come off from the highs maybe about half that — but it hasn’t stopped our market having that sort of contagion of a sell-down as well.”

The reason for that is a lot of gold players were trading at a substantial premium but weren’t showing big growth.

“As a general theme we’re not seeing the substantial growth that we’ve seen in previous years,” Mr Wilson said.

“Some of these guys are talking 10 per cent growth maximum and it’s coming from organic sources. It’s not coming through M&A [mergers and acquisitions].

“We haven’t seen a frantic period of M&A because of high asset prices. The market is sort of in a deadlock at the moment because they can’t grow and the market wants growth.”

Bargain buying

While there is “every likelihood” that the gold price will fall further, the current situation presents a perfect buying opportunity, according to Mr Wendt.

“From a fundamental perspective the falls in commodity prices I don’t think are justified,” he said.

“I think they are a tremendous buying opportunity now.”

And Aussie gold producers are particularly attractive because our weakening currency against the greenback means these guys are still making good margins.

“The share prices have been falling much faster than any sort of fall in the underlying profitability of these companies,” Mr Wendt explained.

“So from an Australian gold market perspective I think these companies look even better value because their values have fallen significantly more than any net impact on their earnings.”

ASX gold stocks to watch

An interesting stock to watch is Gascoyne Resources (ASX:GCY), which poured first gold at its Dalgaranga project in Western Australia at the end of May and is in the process of ramping up production to 100,000 ounces per annum.

First gold from the Dalgaranga project. Pic: Gascoyne Resources.
First gold from the Dalgaranga project. Pic: Gascoyne Resources.

A feasibility study completed in late 2016 placed the all-in sustaining costs – including everything except head office corporate costs – for the Dalgaranga project at $931 per ounce.

At the current Aussie dollar gold price of over $1660, that would give Gascoyne a nearly $400 million operating cash surplus based on the total expected output of 541,000 ounces over the initial six-year life.

“Gascoyne is just at that commissioning phase, so I think it could be one of the standouts because it really hasn’t received a lot of market recognition,” Mr Wendt said.

Over the past four months, Gascoyne’s share price has slumped around 30 per cent.

Dacian Gold (ASX:DCN), meanwhile, completed a $40 million capital raising (with the help of Argonaut) in July at $2.70 a share, and since then its shares have slipped back to $2.31.

Mr Wilson said the placement was more than three times oversubscribed.

“You’ll see investors who couldn’t get involved in that might be looking at getting involved now because it’s come off 15 per cent since that was all done,” he said.

“The sector is actually starting to offer value for the first time in probably six months.”

Dacian is currently ramping up to its production target of 200,000 ounces per annum at its Mount Morgans mine in Western Australia and expects to reach full production by the end of this year.

Looking mighty fine 

So far there hasn’t been much corporate activity in the gold space, but that could change with the falling gold price potentially spurring the mid-tier players to once again look for cheap growth opportunities.

Players like Northern Star Resources (ASX:NST) and Evolution Mining (ASX:EVN) did a great job after the global financial crisis in securing good quality assets for not a lot of cash.

Mr Wendt believes this could be on the cards again.

“This is the perfect opportunity because it is very reminiscent of where we were probably back in 2011, when the gold price hit rock bottom in the wake of the GFC,” he said.

“[Evolution and Northern Star] are in just as good a position as they were back then except they are significantly larger businesses – they’ve got even more cash.

“So I would think that they would be keenly casting their eye around for growth opportunities.

“A company like Gascoyne is perfectly placed because if they can ramp up production I think they will do very well and they’re also going to be I think a very, very attractive takeover target for these companies that are wanting to acquire assets at rock bottom prices.”

Here’s a list of ASX stocks with exposure to gold courtesy of leading ASX data provider MakCorp.

Swipe or  Scroll for full table. Click headings to sort

ASX code Company 12-month price change 4-month price change Price Aug 17 (intraday) Market Cap
GCR GOLDEN CROSS RES 7.66666666667 3.10526315789 0.078 7.9M
VAN VANGO MINING 2.95833333333 1.83582089552 0.19 93.7M
MDX MINDAX 0.5 1.4 0.012 10.7M
CAY CANYON RESOURCES 2.60294117647 1.13043478261 0.245 77.3M
TLM TALISMAN MINING 0.125 0.317073170732 0.27 49.2M
GBR GREAT BOULDER RE 2.77272727273 0.276923076923 0.415 32.4M
DRM DORAY MINERALS 0.45652173913 0.264150943396 0.335 149.6M
CGN CRATER GOLD MINI 1.7 0.227272727273 0.027 7.5M
PLL PIEDMONT LITHIUM 0.619047619048 0.214285714286 0.17 92.3M
BGH BLIGH RESOURCES 0.0588235294118 0.2 0.036 10.3M
CTO CITIGOLD CORP 0 0.166666666667 0.007 13.4M
BGL BELLEVUE GOLD 2.51851851852 0.117647058824 0.19 73.8M
BCN BEACON MINERALS 0.0526315789474 0.111111111111 0.02 40.3M
CVS CERVANTES CORP -0.266666666667 0.1 0.011 5.9M
ARM AURORA MINERALS -0.239130434783 0.09375 0.035 3.5M
ARE ARGONAUT RESOURC 2.125 0.0869565217391 0.025 38.9M
TRY TROY RES 0.190476190476 0.0869565217391 0.125 57.4M
EMR EMERALD RESOURCE -0.116279069767 0.0857142857143 0.038 82.3M
ALY ALCHEMY RESOURCE 0 0.0625 0.017 7.5M
NST NORTHERN STAR RE 0.404958677686 0.0542635658915 6.8 4.3B
BNR BULLETIN RESOURC 0.290322580645 0.0526315789474 0.04 7.5M
AAR ANGLO AUST RES 0.816326530612 0.0470588235294 0.089 28.3M
MRP MACPHERSONS RESO -0.470588235294 0.046511627907 0.09 31.6M
ARX ARC EXPLORATION 0.155378486056 0.0431654676259 0.29 7.3M
PGI PANTERRA GOLD -0.377358490566 0.03125 0.033 4.3M
SLR SILVER LAKE RESO 0.170454545455 0.03 0.515 263.0M
NES NELSON RESOURCES (listed Dec 2017) -0.125 0.0294117647059 0.175 8.0M
CYL CATALYST METALS 1.20168067227 0.0234375 1.31 92.0M
NCM NEWCREST MINING -0.0561534861956 0.0019870839543 20.17 15.6B
TBR TRIBUNE RES -0.0134328358209 0.00151515151515 6.61 330.7M
ORM ORION METALS 0.818181818182 0 0.02 8.9M
TYK TYCHEAN RESOURCE 0.666666666667 0 0.005 2.9M
TMX TERRAIN MINERALS -0.222222222222 0 0.007 4.5M
SBU SIBURAN RESOURCE 0 0 0.003 2.1M
SAR SARACEN MIN HLDG 0.403703703704 0 1.895 1.6B
RGL RIVERSGOLD (listed Oct 2017) -0.3 0 0.14 11.7M
MSR MANAS RESOURCES 0.666666666667 0 0.005 13.2M
MLS METALS AUSTRALIA 0.666666666667 0 0.005 11.7M
LNY LANEWAY RESOURCE -0.25 0 0.003 10.6M
ADN ANDROMEDA METALS 0.75 0 0.007 6.5M
SFM SANTA FE MINERAL 0.458333333333 -0.0277777777778 0.175 12.7M
RBX RESOURCE BASE -0.46875 -0.0285714285714 0.034 934.7k
WGX WESTGOLD RESOURC -0.12084592145 -0.03 1.455 544.7M
DAU DAMPIER GOLD 0.2 -0.0322580645161 0.03 3.6M
SMC STRATEGIC MIN 0.0694444444444 -0.0375 0.385 27.3M
RSG RESOLUTE MINING 0.209523809524 -0.0486891385768 1.27 967.3M
DGR DGR GLOBAL -0.258333333333 -0.0531914893617 0.089 54.6M
GWR GWR GROUP 1.91666666667 -0.0540540540541 0.175 44.2M
DGO DGO GOLD 1.94372294372 -0.0568654646325 0.68 14.7M
TTM TITAN MINERALS -0.917142857143 -0.0645161290323 0.029 73.9M
CHN CHALICE GOLD MIN -0.0625 -0.0909090909091 0.15 39.5M
SBM ST BARBARA 0.390845070423 -0.0919540229885 3.95 2.1B
RED RED 5 0.5 -0.1 0.063 79.5M
DEG DE GREY MINING 3.72972972973 -0.102564102564 0.175 63.5M
RVY RIFT VALLEY RESO -0.333333333333 -0.111111111111 0.016 14.7M
GUL GULLEWA 0.5 -0.117647058824 0.03 4.5M
LTR LIONTOWN RESOURC 2.22222222222 -0.121212121212 0.029 30.9M
BSR BASSARI RESOURCE 0.3125 -0.125 0.021 46.8M
KGM KALNORTH GOLD MI -0.461538461538 -0.125 0.007 6.3M
GBM GBM GOLD -0.363636363636 -0.125 0.007 7.8M
GMN GOLD MOUNTAIN 0.063829787234 -0.130434782609 0.1 49.5M
AOP APOLLO CONSOLIDA 1.31578947368 -0.137254901961 0.22 39.2M
OVL ORO VERDE -0.142857142857 -0.142857142857 0.006 9.3M
MAT MATSA RESOURCES -0.180790960452 -0.147058823529 0.145 25.7M
MOY MILLENNIUM MINER 0.0555555555556 -0.155555555556 0.19 150.5M
RMS RAMELIUS RESOURC 0.135802469136 -0.155963302752 0.46 245.8M
RRL REGIS RESOURCES 0.0336787564767 -0.16 3.99 2.1B
AZM AZUMAH RES -0.0869565217391 -0.16 0.021 16.4M
TAM TANAMI GOLD -0.28 -0.162790697674 0.036 42.3M
EVN EVOLUTION MINING 0.223451327434 -0.164652567976 2.765 4.8B
NXM NEXUS MINERALS -0.0540540540541 -0.166666666667 0.07 6.2M
CDV CARDINAL RESOURC -0.330708661417 -0.174757281553 0.425 158.9M
STN SATURN METALS (listed Mar 2018) -0.175 -0.175 0.165 9.2M
IRC INTERMIN RES 0.941176470588 -0.175 0.165 39.5M
SAU SOUTHERN GOLD -0.267857142857 -0.18 0.205 10.1M
SWJ STONEWALL RESOUR -0.608695652174 -0.181818181818 0.009 23.4M
EGA EGAN STREET RESO -0.181818181818 -0.181818181818 0.225 29.4M
GOR GOLD ROAD RESOUR -0.037037037037 -0.192546583851 0.65 552.8M
ORN ORION MINERALS 0.5 -0.19512195122 0.033 54.2M
ARL ARDEA RESOURCES -0.05625 -0.201058201058 0.755 80.8M
FML FOCUS MINERALS -0.471264367816 -0.206896551724 0.23 43.9M
DCN DACIAN GOLD 0.0947867298578 -0.208904109589 2.31 533.0M
DRA DRAGON MINING -0.15 -0.209302325581 0.17 15.1M
OKU OKLO RESOURCES 0.0740740740741 -0.216216216216 0.29 104.0M
KTA KRAKATOA RESOURC -0.0588235294118 -0.219512195122 0.032 3.6M
WAF WEST AFRICAN RES -0.178082191781 -0.220779220779 0.3 207.2M
DMG DRAGON MOUNTAIN 0.4 -0.222222222222 0.014 3.7M
AGS ALLIANCE RESOURC 0.142857142857 -0.232 0.096 9.6M
ERM EMMERSON RESOURC -0.27 -0.239583333333 0.073 29.6M
SMG SOON MINING -0.333333333333 -0.241379310345 0.22 34.8M
RND RAND MINING -0.308196721311 -0.246428571429 2.11 126.9M
SHK STONE RESOURCES -0.25 -0.25 0.003 2.4M
CTL CENTENNIAL MINING (suspended) -0.357142857143 -0.25 0.009 10.4M
GML GATEWAY MINING -0.0526315789474 -0.25 0.018 15.1M
HAW HAWTHORN RESOURC 0.620689655172 -0.253968253968 0.047 14.5M
CAI CALIDUS RESOURCE 0.0294117647059 -0.255319148936 0.035 45.3M
HHM HAMPTON HILL MNG 1.90909090909 -0.255813953488 0.032 9.4M
HEG HILL END GOLD 0.181818181818 -0.257142857143 0.078 12.0M
EXG EXCELSIOR GOLD -0.227272727273 -0.260869565217 0.034 28.3M
DTM DART MINING 1 -0.272727272727 0.008 6.9M
SIH SIHAYO GOLD 0 -0.277777777778 0.013 24.1M
NUS NUSANTARA RESOUR -0.525 -0.283018867925 0.19 23.4M
GBZ GBM RESOURCES -0.5 -0.285714285714 0.005 5.3M
CGM COUGAR METALS -0.166666666667 -0.285714285714 0.005 3.7M
PRU PERSEUS MINING 0.162711864407 -0.292783505155 0.343 372.6M
MML MEDUSA MINING 0.338983050847 -0.294642857143 0.395 81.0M
PDI PREDICTIVE DISCO -0.730769230769 -0.3 0.021 5.0M
HMX HAMMER METALS -0.282051282051 -0.3 0.028 7.3M
GCY GASCOYNE RESOURC -0.152941176471 -0.300970873786 0.36 156.5M
GME GME RESOURCES 0.538461538462 -0.305555555556 0.1 48.2M
NWF NEWFIELD RESOURC -0.358490566038 -0.30612244898 0.17 98.8M
SMI SANTANA MINERALS -0.64 -0.307692307692 0.009 4.9M
MDI MIDDLE ISLAND RE -0.235294117647 -0.315789473684 0.013 9.1M
ALK ALKANE RESOURCES -0.432835820896 -0.321428571429 0.19 96.2M
BGS BIRIMIAN 0.354166666667 -0.322916666667 0.325 70.1M
EGS EASTERN GOLDFIEL -0.510638297872 -0.323529411765 0.115 87.6M
E2M E2 METALS -0.361904761905 -0.33 0.067 4.1M
WWI WEST WITS MINING -0.111111111111 -0.333333333333 0.016 11.5M
BAR BARRA RESOURCES -0.307692307692 -0.333333333333 0.036 17.1M
FEL FE -0.290322580645 -0.333333333333 0.022 8.2M
KCN KINGSGATE CONSOL -0.0681818181818 -0.338709677419 0.205 47.5M
PRX PRODIGY GOLD -0.281818181818 -0.341666666667 0.079 36.6M
KRM KINGSROSE MINING -0.47 -0.345679012346 0.053 38.0M
AUC AUSGOLD -0.2 -0.351351351351 0.024 15.1M
MKG MAKO GOLD (listed Apr 2018) -0.4 -0.368421052632 0.12 7.6M
BBX BBX MINERALS -0.340909090909 -0.369565217391 0.145 55.5M
VEC VECTOR RESOURCES 0.25 -0.375 0.015 19.4M
AME ALTO METALS -0.465909090909 -0.381578947368 0.047 8.5M
HRN HORIZON GOLD -0.517857142857 -0.386363636364 0.135 10.3M
DHR DARK HORSE RESOU 1.75 -0.388888888889 0.011 19.2M
ODM ODIN METALS 1.5 -0.4 0.15 23.1M
MOX MONAX MINING -0.5 -0.4 0.003 2.2M
GMR GOLDEN RIM RESOU -0.466666666667 -0.4 0.024 9.5M
AYR ALLOY RESOURCES 0.5 -0.4 0.006 8.7M
EXU EXPLAURUM -0.384615384615 -0.407407407407 0.08 38.4M
TLG TALGA RESOURCES -0.31746031746 -0.422818791946 0.43 93.5M
WPG WPG RESOURCES (suspended) -0.615384615385 -0.423076923077 0.015 13.6M
BDR BEADELL RESOURCE -0.772093023256 -0.423529411765 0.049 83.7M
BLK BLACKHAM RESOURC -0.688405797101 -0.426666666667 0.043 53.2M
OGX ORINOCO GOLD 0.0434782608696 -0.435294117647 0.048 51.7M
ARS ALT RESOURCES -0.338983050847 -0.442857142857 0.039 7.3M
KGD KULA GOLD -0.464285714286 -0.444444444444 0.015 5.6M
TNR TORIAN RESOURCES -0.5 -0.449275362319 0.038 7.8M
EAR ECHO RESOURCES 0.47619047619 -0.456140350877 0.155 78.2M
PEC PERPETUAL RESOUR -0.44 -0.461538461538 0.014 3.4M
OKR OKAPI RESOURCES (listed Sep 2017) 0.15 -0.46511627907 0.23 7.9M
VKA VIKING MINES 0.428571428571 -0.473684210526 0.02 7.8M
BRB BREAKER RESOURCE -0.653333333333 -0.490196078431 0.26 39.4M
BC8 BLACK CAT SYNDIC (listed Jan 2018) -0.15 -0.492537313433 0.17 9.7M
DTR DATELINE RESOURC -0.2 -0.5 0.016 11.5M
CDT CASTLE MINERALS -0.214285714286 -0.5 0.011 2.5M
NAG NAGAMBIE RESOURC 1.375 -0.512820512821 0.095 38.9M
TAR TARUGA MINERALS 1.36363636364 -0.518518518519 0.13 17.1M
4CE FORCE COMMODITIE -0.1875 -0.524390243902 0.039 16.5M
GED GOLDEN DEEPS -0.0333333333333 -0.532258064516 0.029 5.0M
ANL AMANI GOLD -0.766666666667 -0.533333333333 0.007 11.0M
CY5 CYGNUS GOLD (listed Jan 2018) -0.55 -0.55 0.09 5.5M
AVW AVIRA RESOURCES -0.971428571429 -0.555555555556 0.004 1.5M
TIE TIETTO MINERALS (listed Jan 2018) -0.64 -0.576470588235 0.072 16.3M
AAJ ARUMA RESOURCES 0.285714285714 -0.608695652174 0.009 5.1M
AQI ALICANTO MINERAL -0.718518518519 -0.638095238095 0.038 4.4M
AWV ANOVA METALS -0.7625 -0.683333333333 0.019 11.9M
BSX BLACKSTONE MINER -0.48 -0.726315789474 0.13 13.0M

 

 

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This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.