Did The Coronavirus Just Trigger a New Bull Market For Gold Stocks?
Another day, another round of coronavirus cases. New York is leading the list with hospitalization and new case. While the state’s governor is optimistic, more states are beginning to show signs of a growing number.
In light of this the government and central banks have towed a tight line between stimulus and bailout. Yet the new bill that could pass as soon as today shows the medium size and larger businesses will have to pay back whatever they take from this stimulus. So will this be another 2008? The plan is to avoid that at all costs.
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In the meantime, the financial markets are dictating a bullish pace for gold. Gold stocks rallied this week as the price of gold headed higher. Earlier in March, gold hit lows of $1,450.90. But this week, these prices nearly reached $1,700 an ounce. This has become a major boon to gold stocks in general. Miners are taking precautions across the world. The global exposure has created a unique situation for certain companies.
However, many seem to be weathering the storm quite well. As operations for mining have been limited, things like milling and production appear to be continuing. So where some may assume the virus could impact all industries negatively, the unique circumstances could make gold potential more attractive. So what’s next for gold? Well, with the “unlimited quantitative” easing in play, the bullish signal could have just been given to gold.
Gold Stocks To Watch: IMC International Mining
IMC International Mining (IMCX Stock Report)(IMIMF) has been turning heads recently. This week the company’s incoming Chairman, Greg Hawkins and CEO Brian Thurston hosted a preliminary conference call to discuss the pending Thane Minerals acquisition. On the call, Hawkins expressed his interest in Thane Minerals’ Cathedral Property. He and the Thane team had been working on the property prior to the acquisition announcement. Now, he feels that it is ready for the next phase.
When investors look mining stocks, there can be a bit of angst simply based on the time it takes to mine a property. But as far as near-term prospects are concerned, Hawkins expects exploration to begin by May. He also said that he will be expecting drilling to follow before the end of the year.
The Cathedral property is in a mineral-rich location called the Quesnel Terrane. Specifically, the Quesnel hosts past and planned production of 50 billion pounds of copper, 28 million ounces of gold, and includes 16 producing and development projects. So it could all come down to timing for IMC as it has near term prospects and while gold prices are beginning to climb again.
Gold Stocks To Watch: Gold Fields
Shares of Gold Fields (GFI Stock Report) took off again on Wednesday. Gold Fields stock price has rallied strongly over the last 3 sessions. Believe it or not on Monday, the stock was trading around $4.30. By March 25, the gold stock reached highs of $6.49. This $2.19 bounce comes as gold prices surged this week. On top of the Gold Fields also focused on information getting to its current shareholders.
As stated above, companies have worked feverishly to communicate operating updates in light of the global pandemic. Gold Fields announced this week that it is working to curb the spread of the virus. The company is implementing policies in countries where they operate in order to comply.
“The world finds itself facing an unprecedented situation – the Covid-19 pandemic has forced governments across the globe to take decisive actions to safeguard the lives of their people. Gold Fields is fully committed to first and foremost protecting the health and safety of our people and communities, and supports all governments’ efforts to contain the spread of the virus,” says Gold Fields CEO Nick Holland.
Gold Stocks To Watch: Franco Nevada Corp
Shares of Franco Nevada Corp. (FNV Stock Report) surged higher as well this week. At the top of the week, shares traded around $96. By Wednesday, FNV jumped to highs of $114.75. Of course, the move comes amid surging gold prices. But the company is also looking at a potential catalyst from fundamentals as well.
At the end of the week last week, Franco announced that its annual information form, consolidated annual financial statements, and discussion on business operations have been filed. This comes just a few week after the company released its quarterly and annual results.
“I am pleased that Franco-Nevada is reporting its best results ever,” stated David Harquail, CEO. “Record quarterly and annual results were achieved across all our important sales and financial metrics. Results benefited from the start of precious metals deliveries from Cobre Panama, strong production at other key assets and higher precious metals prices. Thanks to our diversified portfolio, we expect good overall growth in 2020 mostly driven by the continued Cobre Panama ramp-up despite a more conservative outlook for our energy assets. Franco-Nevada is generating substantial free cash flow and, post-year-end, is now debt-free. Franco-Nevada continues to be the gold investment that works.”
Gold Stocks To Watch: Newmont Corp.
Similar to Barrick gold stock, Newmont Corp (NEM Stock Report) is another one of the top gold companies in the space. Its stock has also echoed a similar market sentiment as the rest of the gold sector this week. Shares of Newmont gold stock have rallied to highs of $48.70 so far. This is up from lows of $33 just 9 days ago. Thanks to a surge in gold prices, Newmont has managed to benefit greatly. It also comes as the company withdrew its full-year 2020 production guidance.
However, the company made a point to state that it isn’t experiencing significant delays in shipping concentrate or transportation. Newmont also said it isn’t experiencing delays in the refining of ore either. But if certain government-required shutdowns and border restrictions occur, Newmont said it may feel some of the burn at that point.
Tom Palmer, President, and Chief Executive Officer said, “We are working closely with host communities, First Nations and other indigenous peoples, regional and national governments and health experts to protect our workforce and nearby communities.”
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