Winners flying high as gold hits US$2,000/oz
A look at some winners and who might be the next
Gold just hit a new all-time record high, breaking through the US$2,000/oz mark as the gold bull run continues in 2020. Gold started 2020 at US$1,498, and as I write this article is at US$2,013, for an impressive 37% gain YTD. Many gold miners are up much more than that due to their leverage to the gold price. Today we look at some of the strong performers and some others that may soon play catch up.
Gold breaks through US$2,000/oz to hit a new record high
Source: Trading Economics
Looking at the gold companies we follow at InvestorIntel, here are the past 1 year performances:
- Alkane Resources Ltd. (ASX: ALK | OTCQX: ALKEF) – Up 264%
- Angkor Resources Corp. (TSXV: ANK | OTC: ANKOF) – Down 18%
- Euro Sun Mining Inc. (TSX: ESM) – Up 46%
- Granada Gold Mine Inc. (TSXV: GGM) – Up 83%
- Harte Gold Corp. (TSX: HRT) – Down 36%
- Quebec Precious Metals Corp. (TSXV: CJC | OTCQB: CJCFF) – 0%
- West Red Lake Gold Mines Inc. (CSE: RLG |OTCQB: RLGMF) – Up 126%
Alkane Resources had the best year of the above group as they continued to produce good volumes of gold in a rising gold price environment. Harte Gold had the least impressive year of the group as their mine had start up issues and a COVID-19 interruption. They also had higher operating expenses (OpEx) as they have not yet dug deep enough to reach the high grade gold.
Reviewing the top 5 performers yesterday on InvestorChannel’s Gold Watchlist Update, we see Granada Gold doing the best, up an impressive almost 35% on no news.
The top 5 gold performers yesterday as gold broke through US$2,000/oz
Just last month I wrote “Granada Gold looks to be ‘underestimated’ by the market as drilling continues” and it looks like the market agreed with this yesterday.
Looking ahead, it is abundantly clear that those gold miners that can deliver will be handsomely rewarded. Investors need to always review the management to see if they have a good track record. Certainly if a gold miner can either increase their production and profits, grow their resource, or discover more gold (ideally high grade above 5 g/t), then at US$2,000/oz the shareholders will likely be very well rewarded.
Of the seven gold stocks InvestorIntel covers above, all look promising in a strong gold price environment.
Even the laggards Angkor Resources and Harte Gold can turn things around very fast. In the case of Angkor the current market cap (C$14m) looks cheap considering their numerous gold, silver, base metals, oil & gas exploration assets in Cambodia. With Harte Gold it is more just a matter of patience as the mine gets deeper they can access the higher grade gold, thereby reducing operating costs and increasing profits. This means investors willing to give the Company another 1-2 years may be well rewarded at the current reduced market cap (C$132m). Quebec Precious Metals is probably the most unloved and under the radar gold miner of the group covered, explaining their 0% one year return. With some good past drill results (1.15 g/t over 80.1 m, 14.20 g/t Au over 2 m, 5.05 g/t Au over 5.06 m, and 4.66 g/t Au over 3.50 m) and further results expected soon, a maiden resource estimate at the Sakami Project due by late 2020/early 2021, and with a market cap of just C$18m, this is one to get excited about. You can read more in my recent article “Quebec Precious Metals announces a ‘very promising gold discovery’ in James Bay.”
Of the recent winners – namely Alkane Resources, Euro Sun Mining, Granada Gold Mine, and West Red Lake Gold Mines – I would probably say Granada Gold Mine appears to have the most exciting potential given their existing ~1.2m I&I gold Resource, some exciting high grade drill results (including 11.45 g/t gold over 33 meters), and a market cap of only C$27m. West Red Lake Gold Mines also continues to look very promising after the one year +126% return. That’s because West Red Lake’s 3,100 hectare property has a 12 km strike length and 3 former gold mines, and contains 1.1 million inferred ounces of high-grade gold (7.57g/t) open at depth. The market cap is still only C$30m.
What a wonderful time to be following the gold miners. Let’s hope the Bank of America forecast comes true and I am writing about US$3,000/oz gold in the near future.
Disclosure: The author Matthew Bohlsen owns shares in Harte Gold, Eastmain Resources and Granada Gold, and may soon take a position in Quebec Precious Metals. The information in this article is general in nature and should not be relied upon as personal financial advice.