A Closer Look At 5 Gold Stocks – SFR, RSG, AMI, OGC AND WGX

  • Aug 29, 2019 AEST
  • Team Kalkine
A Closer Look At 5 Gold Stocks – SFR, RSG, AMI, OGC AND WGX

Gold Spot (XAU/USD) at the time writing traded at US$1542.42 (August 29, 2019 15:12 (UTC+10)), which is around a strong resistance zone ranging from US$1563.55 and US$1543.25. If this resistance zone is broken, the Gold Spot price will witness another upside rally in the coming times.

On June 20, 2019, the gold spot broke important resistance level of ~US$1366 on weekly chart framework, on account of escalation of trade war between the USA and China. Other macroeconomic concerns included, the USA and Iran war concerns in the region of “Strait of Hormuz”, Brexit, etc. The Gold price fluctuations affect stock prices of gold exploration, development and production companies. Five eminent Australian gold stocks are Sandfire Resources NL (ASX: SFR), Resolute Mining Limited (ASX: RSG), Aurelia Metals Limited (ASX: AMI), OceanaGold Corporation (ASX: OGC) and Westgold Resources Limited (ASX: WGX).

Sandfire Resources NL (ASX: SFR)

Sandfire Resources NL (ASX: SFR) is involved in the production and sale of copper concentrate, containing gold and silver by-products from the Group’s 100% owned DeGrussa operations in Western Australia. It is also involved in the exploration, evaluation and development of mineral tenements and projects in Australia and overseas, including investment in early-stage mineral exploration companies.

FY19 Result Report:

According to the released results for FY19, total revenue for the period was noted at $592.2 Mn, up ~3.9% over the previous year. Total revenue was majorly contributed by sales of copper at 87.1%, whereas sales of gold and silver contributed 11.8% and 1.1%, respectively, to the company’s revenue. Moreover, fall in Copper prices was offset by weaker Australian Dollar and record low C1 costs at the DeGrussa Operation.

This outstanding result reflects company’s 2nd best financial performance in its 7 years of operation. This underpins consistency and quality of the DeGrussa Operation as well as determines company’s growth aspirations to build a diversified portfolio of high-quality base metal assets.

FY19 Revenue Segmentation (Source: Company Reports)

On the context of stock price performance, SFR’s share last traded at $6.030 down 2.427% (August 29, 2019 AEST 2:35 PM).

Resolute Mining Limited (ASX: RSG)

Resolute Mining Limited (ASX: RSG) is a gold mining company with more than 30 years of operations. The company’s operates as an explorer and developerof gold mines in Australia and Africa. These mines have had a cumulative output of more than 8 million ounces of gold. It currently owns gold mines, namely, the Mako Gold mine, the Bibiani Gold mine, the Ravenswood Gold mine and the Syama Gold mine in Senegal, Ghana, Australia and Mali, respectively.

FY18 Result Report:

As per the annual report for FY18 (for the period of July 1, 2018 to December 31, 2018), the gold production stood at 129,199 oz at the All-In Sustaining Costs of $1,449 per oz. The company generated a revenue of $223 Mn from gold sales of 128,275 ounces at an average realised price of $1,734 per oz, which was close to the average gold spot price over the period at $1,690 per oz. The gross profit from operations was reported at $24 Mn after depreciation and amortization (related to gold sales) of $10 Mn. RSG reported a net loss after tax of $5 Mn, which was inclusive of an adverse movement in the valuation of net realisable inventory of $29 Mn offset by $15.5 Mn of unrealised foreign exchange gain on intercompany loans. The company continued to invest heavily in the business during the period with Capital Expenditures on development, property, plant and equipment totalling $175 Mn and exploration and evaluation expenditure of $10 Mn.

FY2018 Production Metrics (Source: Company Reports)

On the context of stock price performance, RSG’s share last traded at $1.727 up 0.7% (August 29, 2019 AEST 2:35 PM).

Aurelia Metals Limited (ASX: AMI)

Aurelia Metals Limited (ASX: AMI) is involved in the gold, copper, lead and zinc production and mineral exploration from Hera and Peak mines. Its revenue is majorly derived from bullion and base metal sales.

FY18 Result Report:

Its sales revenue for FY18 (ended on June 30, 2018) increased by 127% to $248.60 Mn on $109.3 Mn in FY17. Backed by higher growth in revenues, EBITDA for FY18 also increased by 182% to $136.72 Mn as compared to FY17. Bottom-line for FY18 at $99.11 Mn witnessed a whopping growth of 413% on FY17.

Quarterly Production Highlights (Source: Company Reports)

On the stock information front, AMI’s share last traded at $0.540 down 6.897% (August 29, 2019 AEST 2:35 PM).

OceanaGold Corporation (ASX: OGC)

The company is a multinational gold producer and is listed on the ASX (ASX: OGC). Its productive assets are located in the Philippines, New Zealand and the United States.

Q2FY19 Key Highlights:

The company recently published its operational and financial results for the Q2FY19. It highlighted that its operation, particularly at Haile, had a significant improvement from the previous quarter with the production growth of 45%. Its total material mined at Haile increased by 45% (Q-o-Q) and its unit cash costs decreased by 39%. The company accelerated pre-stripping activities under improved weather conditions at the Red Hill pit during the period, leading to approximately one quarter ahead of schedule.

OGC's Performance Metrics (Source: Company Reports)

On the context of stock performance, OGC’s share last traded at $3.650 up 2.817% (August 29, 2019 AEST 2:35 PM).

Westgold Resources Limited (ASX: WGX)

Westgold Resources Limited (ASX: WGX) is primarily involved in the exploration, development, and operation of gold mines. Its operations are concentrated primarily in Western Australia.

Buldania Lithium Project Update:

The company recently informed the market that Liontown Resources Ltd had inked a formal sale agreement with Westgold Resources Limited to acquire the revenue and production royalties relating to lithium and related minerals over its 100%-owned Buldania Lithium Project in Western Australia. The royalties comprise production royalty of A$2 per tonne of ore mined and/or processed from three key tenements (E63/856, P63/1977 and M63/647) and 1.5% gross revenue royalty and are being acquired for a total consideration of $2 Mn in cash. The location of Buldania is around thirty-kilometre east of Norseman, which is Liontown’s 2nd Western Australia lithium project and is being progressed alongside its flagship Kathleen Valley Lithium Project, where substantial resource spudding program is in progress.

Q4FY19 Cash & Bullion Position (Source: Company Reports)

On the context of stock price performance, WGX’s share last traded at $2.335 up 2.412% (August 29, 2019 AEST 2:35 PM).

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