Gold rises as the coronavirus threatens to become a pandemic
Gold is up ~25% over the past year and is up ~12% in 2020 outperforming almost all commodities so far this year. Of course, I should mention the emissions metals palladium and rhodium which were up 75% and 366% over the past year respectively.
Gold rises as coronavirus threaten to cause a pandemic
The coronavirus and the threat of a pandemic are driving gold prices higher in 2020. A pandemic is defined as “an epidemic of disease that has spread across a large region; for instance multiple continents, or even worldwide……” It also needs to be unstable, that is, new cases rising significantly.
Gold is up ~25% over the past 1 year – Now at US$ 1,659
Some history of flu virus pandemics
Some recent flu pandemics include: HIV, Spanish flu, and the 2009 swine flu.
- The Swine flu pandemic (2009/10) was an influenza pandemic that killed ~201,200 people worldwide. It ran for about 16 months from April 2009 – 10 August 2010.
- The Spanish flu pandemic (1918-20) infected 500 million people around the world, or about 27% of the then world’s population at the time. The death toll is estimated to have been 40-50 million, and possibly as high as 100 million, making it one of the deadliest epidemics in human history. It should be noted that World War I was a factor.
Gaining some perspective
It is estimated that the seasonal flu kills between 291,000 to 646,000 people worldwide each year, mostly the very old or the very young, or those with weakened immune systems.
To date, the coronavirus has caused 2,619 deaths.
Coronavirus cases, deaths, and recovered cases as of February 23, 2020
Coronavirus deaths versus seasonal flu deaths so far in 2020
What this means is that currently, the coronavirus is not yet a huge concern, even if we assume China’s statistics are not accurate and that global cases were in fact 10x worse at 26,190 deaths. That would still only be 36% of the seasonal flu death toll. My conclusion, for now, is that the coronavirus ‘at this stage’ is still only a ‘potential’ significant threat to the global population and economy.
Economic disruption has been greater so far due to China’s measures to try to contain the virus; however recent numbers in China suggest new cases are falling and workers are returning to work.
However given what we know from history that pandemics can cause millions of deaths then it would be very wise for investors to add some insurance to their portfolios, just in case, the coronavirus does become a severe pandemic. Two ways to do that are to build up your cash levels and buy some gold or quality gold stocks.
9 gold stocks we are following at InvestorIntel
Alkane Resources Ltd. (ASX: ALK | OTCQX: ANLKY)
Alkane Resources is a gold production company with multi-commodity exploration and development projects predominantly in the Central West region of NSW, Australia. The Tomingley Project is expected to produce about 30,000 to 35,000 ounces of gold for FY20 at an AISC of A$1,250 to A$1,400 per ounce, in line with the recent move to underground mining. Alkane is also ramping up nearby regional gold exploration to help support the feed at the Tomingley Mill. The Company is also well known for its rare earths project known as the Dubbo Project which has a potential mine life of 70+ years. You can read more here.
Angkor Resources Corp. (TSXV: ANK)
Angkor Resources (formerly Angkor Gold) is the first North American publicly-traded mineral exploration company in Cambodia. Angkor Gold is a project generator with a focus on gold exploration, and in more recent times oil and gas exploration. They have a huge land package (983 km²) in Cambodia with multiple prospects focused on gold, silver and base metals. Their oil and gas exploration license is known as Block VIII (7,300 km² concession). You can read more here.
Eastmain Resources Inc. (TSX: ER | OTCQX: EANRF)
Eastmain is a Canadian gold exploration and development company focused on the James Bay area, Quebec, Canada. Eastmain has several gold projects; however, their flagship is the advanced Eau Claire Project with an open pit and underground M&I Resource estimate of 853,000 oz Au, grading 6.18 g/t. In total, Eastmain has a pipeline of 11 exploration projects ranging from early exploration to pre-development. You can read more here.
Euro Sun Mining Inc. (TSX: ESM)
Euro Sun Mining is advancing its 100%-owned Rovina Valley Project, located in west-central Romania. It is the second-largest undeveloped gold deposit in Europe. Euro Sun has an M&I resource of 7.05 million gold ounces and 1.39 billion copper pounds at their Rovina Valley Project. In addition, Euro Sun has discovered four new gold-copper porphyry targets, with a cluster of three porphyry targets just 1.5 km apart from each other, only 6 km east from their existing Project. Grades are lower however that is normal in large size copper-gold porphyries. You can read more here.
Granada Gold Mine Inc. (TSXV: GGM)
Granada Gold is a Canadian junior mining and exploration company with gold and silver properties in Quebec and Ontario. The Company’s current focus is directed towards the development and continued exploration of the Granada Property situated in the heart of the famous Abitibi Greenstone Belt and along the prolific “Cadillac Trend”. Drill results have been promising including from surface 7.67 g/t over 15 metres. You can read more here.
Harte Gold Corp. (TSX: HRT)
Harte Gold Corp. commenced gold production in early 2019 at their wholly owned Sugar Zone underground mine in White River Ontario, Canada. The current Resource estimate is 1,108,000 contained gold ounces @8.12g/t Indicated and 558,00 contained gold ounces @5.88g/t Inferred. There is also excellent exploration upside with a 30 km strike potential with only 5km so far explored, over a massive 79,335 hectares land package. Full-year 2020 guidance is 42,000–48,000 ounces of gold production at an AISC estimate of US$1,475–US$1,650 per ounce. Costs are expected to fall in subsequent years as the mine gets deeper and reaches higher grades. The mine is planned to ramp up to 61,000 Au ounces pa over an initial 14 year mine life. You can read more here.
Signature Resources Ltd. (TSXV: SGU | OTCQB: SGGTF)
Signature Resources is a Canadian gold exploration company with advanced and early exploration assets. Their core asset encompasses the Lingman Lake Gold Mine in northwestern Ontario, Canada. Signature Resources has a historic resource estimate of 234,648 oz of contained gold, grading 6.86 g/t, over an area of 9,896.8 hectares. The Company’s other assets include two new early exploration projects: Lingside West and Lingside East. All three projects are located within the Lingman Lake greenstone belt. Signature plans to advance and expand these projects centering on targeted diamond drilling of the high-grade gold zones. Some good airborne geophysical surveys results in 2019 are also positive for further exploration in a new area “known to host over 40 mineral occurrences, reported to contain gold, copper and molybdenum mineralization.” This area is situated 12.5-kilometers west of the Lingman Lake gold mine. You can read more here.
TNR Gold Corp. (TSXV: TNR)
TNR is a project generator that focuses on gold and the key energy metals, copper and lithium. TNR Gold’s current three main projects involve gold in Alaska, copper and gold in Argentina, and lithium in Argentina. A 2013 resource estimate at their Shotgun Gold Project in Alaska resulted in an Inferred Resource of 20,734,313 tonnes at 1.06 grams per tonne (g/t) gold for a total of 705,960 ounces gold (Au). TNR holds a 0.36% net smelter return royalty on the 100% owned McEwen Mining Los Azules Project, and a 1.8% NSR royalty on the Mariana Lithium Project in Argentina which is being developed by a JV with Ganfeng Lithium and International Lithium (ILC). You can read more here.
West Red Lake Gold Mines Inc. (CSE: RLG | OTCQB: RLGMF)
West Red Lake Gold Mines is focused on gold exploration and development in the prolific Red Lake Gold District of Northwestern Ontario, Canada. The district is host to some of the richest gold deposits in the world and has produced 30 million ounces of gold from high grade zones. West Red Lake’s 3,100 hectare property has a 12 km strike length and 3 former gold mines (Rowan Mine, Red Summit Mine, Mount Jamie Mine), and contains 1.1 million inferred ounces of high grade gold (7.57g/t) which remain open at depth. You can read more here.