5 Gold Stocks Beating the S&P/ASX 200 Plummet

  • Mar 10, 2020 AEDT
  • Team Kalkine
5 Gold Stocks Beating the S&P/ASX 200 Plummet

Gold stocks on the Australian Securities Exchange are showing some momentum after a while as gold spot reaches a new record high in the domestic market.

Gold has been on a surge globally thanks to the fear of uncontained coronavirus outbreak, which is unabating as days are passing. Despite several relief packages from a various organisations such as the World Health Organization (or WHO) and prevention campaign in place, the virus is spreading like wildfire and instigating panic actions in the market.

To Know More, Do Read: Market Seeks Safe Haven Shelter Once Again, Coronavirus or Overvaluation?

In the wake of market turmoil and equity plummet, gold and the global bond prices are spiking with gold spot reaching a record high of $2,657.78 per ounce (as on 9 March 2020) and Australian 10-year bond yield on treasury reaching a new record low of 55 basis point (as on 9 March 2020), pushing the bond value up.

However, gold stocks such as Northern Star Resources Limited (ASX:NST), Saracen Mineral Holdings Limited (ASX:SAR), Evolution Mining Limited (ASX:EVN), Newcrest Mining Limited (ASX:NCM) are outperforming the market and sustaining despite the fall in S&P/ASX 200 Index.

NST, EVN, SAR, NCM, WAF Total Return Against S&P/ASX 200 (YTD) (Source: Thomson Reuters)

Northern Star Resources Limited (ASX:NST)

Northern Star Resources Limited reported revenue of $826.97 million for the half-year ended 31 December 2019, up by 31 per cent against the previous corresponding period (or pcp), despite a 6 per cent decline in sales.

The miner managed to sell 423,243 ounces of gold, which remained 6 per cent lower against pcp, and the gold production for the period fell by 0.02 per cent against pcp; however, despite that the revenue remained substantially high amid higher average realised gold prices.

NST realised an average price of $2,046 per ounce during the period, up by ~ 20.35 per cent against pcp, which further resonated into a net profit of $126.78 million, up by 54 per cent against pcp.

The stock rallied from its 31 December 2019 close of $11.310 to the high of $15.280 (as on 24 February 2020), which underpinned a price appreciation of over 35 per cent, delivering a YTD total return of 28 per cent.

Post adjusting with the benchmark, i.e., S&P/ASX 200, the YTD total return of the stock stands at 45.88 per cent.

Evolution Mining Limited (ASX:EVN)

Evolution Mining Limited (ASX:EVN) reported a record FY20 half-year statutory net profit after tax of $147.2 million, up by 62 per cent against pcp, and a record cash generation of $242.4 million for the period with an operating cash flow of $511.8 million, which remained 32 per cent higher against pcp.

The company produced 362,857 ounces of gold with an all-in sustaining cost of $1,041 per ounce, which makes EVN one of the low-cost gold producer in Australia.

The profitability of the company was reflected in the share price, which rose from its 31 December 2019 close of $3.80 to a high of $4.56 on 24 February 2020, which marked a price appreciation of over 20 per cent and a YTD total return of 15 per cent.

Post adjusting with the benchmark, the YTD total return of the stock stands at 32.52 per cent.

Saracen Mineral Holdings Limited (ASX:SAR)

Saracen Mineral Holdings Limited reported revenue of $409.93 million for the period ended 31 December 2019, up by 45 per cent against pcp. The strong revenue was on account of high gold prices and sales.

SAR managed to sell 206,277 ounces of gold during the period, which remained 23 per cent up against the pcp, and the miner realised an average gold price of $1,981 per ounce during the period, up by 18 per cent against pcp.

The higher sales and realised price further resonated into a net profit of $83.01 million, up by 90 per cent against pcp.

The stock rose from its 31 December 2019 close of $3.31 to the high of $4.57 (as on 25 February 2020), reflecting a price gain of 38 per cent and a total YTD return of 21 per cent.

Post adjusted with the benchmark; SAR delivered a total return of 41.62 per cent.

Also Read: Regis Production Cost Surmounts, While SAR Stands Tall; Halted Gold Rally To Impact the Shine?

Newcrest Mining Limited (ASX:NCM)

The company reported a statutory profit of USD 236 million for the first half of the financial year 2020 (ended 31 December 2019), including proceeds of USD 44 million from the write-down of Gosowong following its classification as ‘held for sale’; and,

  • The underlying profit of USD 280 million for the period remained ~ 15.35 per cent higher against the previous corresponding period amid a higher realised average realised price, favourable impact on operating costs for the Australian operations from the weakening of the Australian dollar against the US dollar, and a lower depreciation expense.

Despite a 12 per cent fall in gold production for HY2020, the stock rose from its 31 December 2019 close of $30.150 to a high of $32.730 (as on 22 January 2020), which marked a price gain of 8.55 per cent. However, the stock plunged after that to mark a low of $25.100 (as on 2 March 2020), but soon NCM gained momentum to reach a high of $30.935 today on ASX.

The stock delivered a YTD total return of -0.86 per cent, which remained lower against the peer group, but high as compared to the benchmark S&P/ASX 200 Index, which delivered a YTD total return of -12 per cent. `

Post adjusted with the benchmark; NCM delivered a YTD total return of 12 per cent, and it remained one of the top-performing stock for the day.

Also Read: Free Cashflow Declines For Newcrest Post Red Chris Stake; West African Expects Early Gold Pour

West African Resources Limited (ASX:WAF)

WAF is an emerging new gold mining entrant, and the miner recently announced that it has completed commissioning of the primary crusher ahead of schedule at its Sanbrado Gold Project, which is the flagship gold prospect of the company; and,

  • WAF intends to produce over 300k ounces of gold from 12 months post the production at the prospect commences, which is now expected during early second quarter in 2020 and aims to keep the ASIC below USD 500 per ounce.

There has been a significant development across the prospect, which as per the company is now 90 per cent complete.

The stock of the company rallied from its 31 December 2019 close of $0.430 to the high of $0.645, which underpinned a price appreciation of 50 per cent, which further resonated into a YTD return of 45 per cent.

Post adjusted with the benchmark; WAF delivered a YTD total return of 67.301 per cent. 

 

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