Fed Enacts Emergency Rate Cut; Gold Stocks Rally
Breaking News on March 3 triggered a rally for gold and gold stocks. The U.S. Fed cut interest rates by 50 basis points on Tuesday. This was in response to “evolving risks” from the spread of the coronavirus. The decision pushed global stock markets higher and triggered hopes of more central bank actions.
Gold prices surged to highs of $1,629.50 after the news came out and a slew of gold stocks took off as well. Due to the continued coronavirus scare, the markets remain in a state of turmoil. On Tuesday, gold inched up again as investors kept looking for safe assets. The latest interest cut came in light of the coronavirus crisis and those bets also resulted in a gold rally.
Gold Stocks To Watch: IMC International Mining
This morning shares of IMC International Mining (IMIMF – Free Report) (IMCX) took off with shares in the U.S. reaching highs o $0.39 right at the open. While much of the excitement around the company has stemmed from its proposed acquisition of Thane Minerals. While it was still in the intent phase, IMC has reported new changes to its leadership team including a new CFO.
However, this week the company reported something that could indicate big potential ahead for the company. Not only will its shares begin trading on the Frankfurt exchange, but the company also reported something very important to the market. Honestly, if you only read the headline, you could have missed it. What did IMC announce? On March 3 the company reported that it would look to close on its Thane Minerals acquisition by or before March 15. That gives roughly 2 weeks or less to a potential milestone resulting in the company gaining direct exposure to northern British Columbia’s Quesnel Terrane.
The Quesnel Terrane hosts past and planned production. While gold prices continue heading higher, junior gold stocks could also gain more attention. Obviously an acquisition like this could bring more to IMC International specifically. This is something to keep in mind if this is one of the juniors on your list of gold stocks.
Rider: It is noted that the results of nearby or adjacent properties are not necessarily indicative of the potential of the Cathedral property and should not be understood or interpreted to mean that similar results will be obtained from the Cathedral property.
Gold Stocks To Watch: Coeur Mining
Another one of the gold stocks that could be worth tracking at this point is that of Coeur Mining Inc (CDE – Stock Report). It has gained as much as 12% ever since it was upgraded by a B. Riley FBR analyst. B. Riley FBR upgraded the stock from neutral to buy and set the target price at $7.90 a share.
In this regard, it should be noted that the stock has lost as much as 40% in 2020 so far. However, it remains to be seen if Coeur can rebound due to higher gold prices. While gold stocks trade higher this week, so too has Coeur Mining. Shares reached highs of over $4.80 on March 3.
Gold Stocks To Watch: McEwen Mining
On the other hand, McEwen Mining (MUX – Stock Report) has emerged as another promising gold stock in recent days. On Monday, the stock recorded impressive gains and ended the day with gains to the tune of 8.50%. That has continued on March 3 with the mining stock breaking above $1.05 a share.
Last week, the company announced that it is going to announce its Q4 2019 results as well as the results for financial 2019 on March 11. The results will be released at 2 p.m. EDT. This will be something to keep in mind if MUX is on your gold stocks list as well.
Analysts like B. Riley have bosted targets for the gold stock. In this case, the firm lifted McEwen’s target from $4 to $4.40 while maintaining a Buy rating. This comes after the company reported positive drill results at its Grey Fox project. On top of that, McEwen also reported consolidated gold production of over 134k gold ounces and 3.36 million silver ounces for its fiscal 2019 year.
Gold Stocks To Watch: New Gold
Another gold stock that could be considered by investors is the New Gold (NGD – Stock Report). Back on February 25, the company announced that a $300 million partnership with the Ontario Teachers’ Pension Plan. The pension fund has agreed to pick up a 46% free cash flow stake in New Gold’s New Alton mine.
“We are pleased to be partnering with Ontario Teachers’, one of the world’s preeminent and most well-respected investors, in this transformational transaction that provides us with upfront cash allowing us to restructure our balance sheet and lower our level of net indebtedness via a true shared risk and upside partnership focused on free cash flow. This transaction provides New Gold with an attractive cost of capital, further strengthens our financial position, allows us to benefit from the full exploration potential elsewhere on the New Afton land package and provides the opportunity to re-acquire 100% of New Afton,” said Renaud Adams, President and Chief Executive Officer of New Gold.
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The deal will see Ontario Teachers’ acquiring interim interest with a term fo 4 years. If the JV interest option isn’t exercised by the group during the exercise period, then it will hold a reduced interest. That interest will provide a 42.5% free cash flow interest in the company’s New Afton project.
Gold Stocks To Watch: NovaGold Resources + Barrick Gold
Last but not least, NovaGold Resources Inc. (NG – Stock Report) has emerged as another gainer in recent days. On Monday, the stock rose by as much as 7.5%. That rally continued on March 3rd as well. Shares of NovaGold stock jumped to highs of $9.18 during the morning session.
In early February, NovaGold announced that the Alaska Department of Natural Resources had granted the company’s Donlin Gold project. The project is a joint venture with Barrick Gold (GOLD – Stock Report) and is owned 50-50 by the two companies.
While this is one of the many ventures that Barrick has been involved with, it’s also focusing on other markets. In a recent article about Barrick Gold stock, we highlighted a new deal in Japan. Japan Gold reported that it formed a country-wide alliance with Barrick. The companies plan to jointly explore, develop and mine properties in Japan.
Disclaimer: Pursuant to an agreement between Midam Ventures LLC and IMC International Mining Corp. (CSE: IMCX) (IMIMF), Midam has been paid $200,000 for a period from January 7, 2020, to February 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to March 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to July 9, 2020. We may buy or sell additional shares of IMC International Mining Corp.(CSE: IMCX) (IMIMF) in the open market at any time, including before, during or after the Website and Information, to provide public dissemination of favorable Information about IMC International Mining Corp. (CSE: IMCX) (IMIMF). Read our full disclaimer here.
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