Resources Top 5: Where do investors stash their cash in wartime? Gold stocks
Here are the biggest resources winners in early trade, Thursday February 24.
Aussie gold miners are standing tall amongst a sea of red today, led by PRU.
Yesterday, the 500,000ozpa West African gold miner announced some speccy H1 results, including a 90% increase in revenue on the previous corresponding half year period to $545.7m.
Profits were up 159% to $126.9m, with the company declaring an interim dividend of 0.81c per share.
“With three gold mines in operation, we are now producing gold at our targeted rate of ~500,000 ounces of gold per year, and with excellent drill results coming from our organic growth programmes we are confident of at least maintaining this level of production and associated profitability well into the future,” MD Jeff Quartermaine says.
PRU expects “this positive trend of improved earnings and cashflow to continue”, predicting FY22 production of between 471,164 – 506,164oz gold at a cost of $US932 ($1,290) to $US1,020/oz ($1,412).
At 31 December 2021, PRU had on-hand cash of $268.2m, and 9,342oz of gold bullion valued at $23.4m.
The $2.14bn market cap producer is up 5.15% year-to-date, and 55% over the past year – making it one of the mid-tier gold sector’s best performers.
Dual listed gold miner SSR also came through with outstanding results.
Full year production of 794,456oz approached the top end of the company’s guidance (720,000 to 800,000oz) while costs were lower than predicted at $US955oz (guidance: $US1,000 to $US1,040/oz).
A nice profit margin of $444.2 million saw the company declare a quarterly cash dividend of US$0.07 per share — an increase of 40% over the third quarter dividend.
SSR is aiming to produce ~800,000oz per year over the next three years, “a strong and stable production profile without requirements for material capital investment”.
“The Company’s 2022 guidance included AISC guidance of $1,120 to $1,180 per ounce, reflecting a cost profile that ensures strong free cash flow and capital returns going forward,” it says.
At the end of 2021, SSR had a cash and cash equivalent balance of US$1.017 billion.
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The explorer’s flagship is the ’Kingman’ project in Arizona, where a recent drilling program pulled up high grade gold, silver, lead and zinc at ‘Tintic’.
Highlights included 5.3m @ 18.1g/t gold & 24g/t silver from 23.6m.
The Tintic anomaly is now 600m long and 200m wide, with high grade gold and silver starting from just 10m-50m below surface.
Mineralisation remains open in multiple directions, RIE says.
A $1.05m placement announced earlier this week at 1c per share – a tiny 3.3% discount to the five-day VWAP – will be used toward follow up drilling.
“The high-grade assay results achieved from shallow depths at Tintic during the recent RC drill program are very encouraging,” RIE chairman Michael Bohm says.
“We anticipate the drill rig re-mobilising to site in the second week of March 2022.
“The drill program will again focus on the historic Tintic mine area as we seek to build on the already impressive drill results from late last year.”
The $10.6m market cap stock is flat year-to-date.
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Earlier this month this lethargic China-backed copper-gold explorer came out of a two-and-a-half year suspension after completing a $1.5m cap raise and satisfying the ASX’s conditions of reinstatement.
GCR’s focus is the ‘Copper Hill’ project in the Macquarie Arc in NSW, home to porphyry copper-gold deposits at Cadia (Newcrest), Northparkes (China Molybdenum) and Cowal (Evolution Mining).
Copper Hill has an existing resource of 87Mt at 0.36% copper and 0.32g/t, which hasn’t been updated since 2015.
GCR says Copper Hill is sparsely drilled below 350m vertically “and there is good potential for depth extensions”.
Occurrences of mineralisation along strike from Copper Hill in a 5km-long corridor also provide scope for further resources in satellite deposits, it says.
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In September, this former struggler known as Orminex announced the “transformational” acquisition of a couple of advanced gold projects in Canada, plus a $9.5m cap raise to fund the acquisition and aggressive exploration.
A maiden -5,000m underground diamond drilling program has now kicked off at its namesake project, which hosts a non-resource resource of ~480,000oz of gold.
The program is aimed at converting the resource to JORC status and finding more gold at the historic mine, where very limited exploration has taken place since the 1980s.
Drilling results will be released “as soon as they become available”, with LRL aiming to release a JORC update this year.
Drilling at the ‘Denain’ gold project is also progressing well, LRL says, with more than 65% now completed.
The sale of Labyrinth’s 50% interest in the Penny’s Find project in WA to joint venture partner Horizon Minerals (ASX:HRZ) for $750,000 in cash and shares remains on track for completion in the March quarter.
The $41m market cap stock is up 17.5% year-to-date. It had $8.6m in the bank at the end of December.