Best Gold Stocks to Watch as Gold Heads Back Toward $2,000 An Ounce
After hitting a high of $2,089 in early-August, gold bullion has been gaining investor attention. In the past two weeks, several large financial institutions including Citigroup, have put a price target for gold of roughly $2,400 per ounce within the next six months. In the short term (up to three months), analysts have put a price target of roughly $2,200 an ounce. So, with so much bullish sentiment for gold bullion, will gold stocks continue to rise as well?
The short answer is that no one truly knows, but we can use the information we have to make an educated guess. Since gold stocks are so closely correlated with the price of gold bullion, it would make sense to be bullish about the gold mining industry if you’re bullish on bullion. The bulk of the sentiment surrounding gold stocks comes from the effects of the COVID pandemic. Since the start of the pandemic, it has not been uncommon to see large gold stocks shoot up in value by upwards of 40-50%.
Since the financial world is so volatile right now, many investors have turned to gold as a safe haven for wealth. In addition, when markets are awry, gold tends to go up in value, historically. While buying gold may not be the best for those who want short term gains, those who trade may start focusing more on stocks. With this in mind, here are 4 gold stocks to watch this week.
Gold Stocks to Watch for October 2020: Freeman Gold Corp.
Freeman Gold Corp. (CSE: FMAN Stock Report) (OTC: FMANF) is an exploration company working on the development of several large mines. Since mid-March, shares of the company have shot up around 35% following a surge in gold prices. Its main focus right now is on the Lemhi Project. This project is based out of Lemhi, Idaho where it is comprised of around 30 square kilometers of land.
With 355 holes drilled in the area, Freeman Gold has stated that there is a great deal of potential in the mines. For context, Idaho was ranked No. 8 in the world by the Fraser Institute in terms of its mining attractiveness. Since the beginning of the project’s inception, Freeman Gold has worked on two goals within the mine. The first goal according to Will Randall, President, and CEO of Freeman, was to “extinguish the back-in rights (to the mine).” The company accomplished this recently after signing a deal with Yamana Gold (NYSE: AUY Stock Report).
This deal, worth 5% of Freeman’s outstanding shares, serves two distinct goals. For one, it will help to de-risk the project. Second, Yamana brings with it decades of experience in the gold mining industry which could help to ensure the security of the mine as a financial asset moving forward. Randall further stated that the second goal of the project “was to acquire the remaining unowned claims within the resource area.” Earlier this month the company acquired the Moon Claims in the area which add to the project’s extensive land area. Because the company continued achieving its goals with the Lemhi Project, Freeman Gold could be one of the junior gold stocks to watch heading into next quarter.
Gold Stocks to Watch for October 2020: Jaguar Mining Inc.
Jaguar Mining Inc. (JAGGD Stock Report) is a junior mining company that focuses on the acquisition, exploration, and development of several Ines around South America. The main mines that Jaguar consists of include the Turmalina Gold Mine Complex and the Caeta Gold Mine Complex, located in the state of Minas Gerais in Brazil. The company states that it has claims that cover around 64,000 hectares of prime mining land.
Recently, Jaguar Mining announced that it would be consolidating its shares to one share for every pre-consolidatoni share. The goal with this is to reduce the number of outstanding shares and hopefully raise more capital for the company. This consolidation will take around 723 million shares and turn them into 73 million undiluted shares for investors. In addition, the company stated that it wants to update the structure of its dividend payouts. To do this, the board of directors will review the company’s budget and cash flow. This will help to figure out if it can pay out more dividends to investors.
Similar to Freeman Gold, in the past six months, Jaguar Mining shares have climbed. Furthermore, earlier this month the company announced the start of near-mine surface diamond drilling for high-priority exploration targets located in and around the Turmalina Gold Mine, the Pilar Gold Mine, and the Caeté processing facility all located in Minas Gerais, Brazil. The high priority targets include Zona Basal, Faina, Pilarzinho, and Corrego Brandão. With that, Jaguar Mining continues to look like an interesting gold stock to watch.
Gold Stocks to Watch for October 2020: Barrick Gold Corp.
Barrick Gold Corp. (GOLD Stock Report) is one of the largest gold mining companies in the world by market cap. Although the company does mine large quantities of copper, its main interest is in the mining of gold ore. As of 2020, Barrick Gold has 16 operating sites across 13 countries around the world. This includes mines in South America, Canada, the U.S., Africa, and the Middle East. Because it does have such a broad area that it covers, Barrick Gold has been able to lower its cost of gold per ounce to roughly $900. This is quite low and leaves a lot of room for profitability with its mined assets.
In 2020, Barrick Gold stated that it expects to produce roughly 5 million ounces of gold. In addition, it expects to produce around 500 million ounces of copper as well. Until the Newmont Corporation acquired Gold Corp. last year, Barrick Gold was the largest gold mining company in the world. In the past six months, shares of Barrick Gold have shot up by around 40%. While this is not as much as some other gold stocks, it is quite substantial for a gold stock of Barrick’s size.
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Additionally, because of its size Barrick Gold tends to be a more stable gold stock to watch, comparatively. With the above information, Barrick Gold continues to illustrate why so many investors are interested in the company.
Gold Stocks to Watch for October 2020: Agnico Eagle Mines
Agnico Eagle Mines Ltd. (AEM Stock Report) has seen its shares shoot up by almost 30% in the past three month period. As a whole the gold industry has risen by around 20% in that same time period. So we have to ask, what is the driving factor of this large price increase for AEM stock. One of the main reasons for the large bullish sentiment with Agnico Eagle is that it announced its expected EPS to hit 83% for the 2020 year. In addition, the company stated that for the latter half of 2020, it expects to produce roughly 1.7 million ounces of gold. This is compared to a previous estimate of around 1.6 million ounces.
Agnico Eagle has been working to increase the life span of its mines that span around the world. This includes the Meliadine Mine, which yielded roughly 240,000 ounces of gold last year. At the beginning of this year, Agnico Eagle saw its share prices hit hard by the COVID pandemic. After having to close down operations at several mines, the company recently began operations once again. This includes the resuming of operations at its Canadian Malartic Mine. This mine should move up to commercial production by the end of this year.
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