Why these two ASX Gold Mining stocks are sprinkling glitter?

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  • Newcrest Mining and Resolute Mining are among the hot stocks of the day after both the companies released significant updates.
  • Newcrest has announced the initial Mineral Resource for Red Chris, whereas Resolute reaffirmed its 2021 guidance.
  • Resolute has reaffirmed that its gold mining operations remain on track to achieve the 2021 cost and gold production targets.

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In a significant update made on 31 March 2021, the gold industry's heavyweight Newcrest Mining (ASX:NCM) announced the initial Mineral Resource estimate for Red Chris. Another peer in the group, Resolute Mining Ltd (ASX:RSG), sees the best day in the past three months after it reaffirmed its 2021 guidance. Let us have a closer look at both the updates to understand why these stocks created a buzz among investors.

Newcrest Mining Limited

Newcrest Mining Limited (ASX:NCM) announced its initial mineral resource estimate for the Red Chris mine in British Columbia, Canada. NCM and Imperial Metals jointly operate the mining operations.

According to the company's latest release, the total measured and indicated resource totaled 980 Mt with 0.41 g/t Au & 0.38% Cu containing 13 Moz gold and 3.7 Mt copper. Inferred resources were estimated at 190 Mt of ores with 0.31 g/t Au and 0.30% Cu containing 1.9 Moz gold and 0.57 Mt copper.

Newcrest said that the underlying Mineral Resource estimate is a vital contribution to the Pre-Feasibility Study of Red Chris mine, which is anticipated to deliver before the end of September this year. The company also expects the reserve estimates for Red Chris to be delivered within the same period.

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Source: NCM Company Announcement, dated 31 March 2021

NCM’s Red Chris gold-copper porphyry project is located on the north flank of the Skeena Mountains in British Columbia. The first production from the Red Chris mine was delivered in July 2015 after the construction work of the open-pit mining operations was completed in November 2014.

NCM closed at $24.42 a share on 31 March 2021.

Resolute Mining Limited:

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The Resolute Mining stocks (ASX:RSG) jumped around 4.7 per cent Wednesday, registering one of the biggest intraday gain since 16 December 2020. In the company's significant release Wednesday, the company stated that Senegal's Syama and Mako gold operations were on track to achieve 2021 cost and production guidance. The company also assured that the performance of March quarter is on target.

The company enjoyed a strong financial position with cash and bullion balances of $106 million at the end of 2020. The company expects sufficient cash flows in 2021 to support $50 million in debt repayment. 

In addition to that, the company will take proceeds of $105 million from the sale of Bibiani to Chifeng. The amount will be used to fast-track the company's debt repayment. RSG is working to resolve its position with the Ghanaian Government on the recently terminated lease of Bibiani.

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Apart from that, the company has provided production guidance for Syama and Mako. Syama is determined to increase production by more than 25 per cent, with an AISC to lie between A$1,200/oz and $1,275/oz. Mako is forecasted to produce 115-120koz at an AISC between $1,175/oz and $1,225/oz.

RSG closed at $0.44 a share on 31 March 2021.

All financial information pertains to Australian Dollars unless stated otherwise.




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