Gold prices are recovering in the domestic market, with gold spot prices recovering from $2,113.03 (low on 12 November 2019) to the present high of $2,167.21 (as on 4 December 2019 02:48 PM AEST). The current recovery in gold and its high value in the international market is promoting the ASX listed gold companies to progress across many prospects, which is supporting their stock prices on ASX.
Presently, the gold prices are in a see-saw ride with prices responding to mainly to the geopolitical events rather than basic fundamentals.
However, we would like to encourage our readers to explore fundamentals before investing in gold or gold-related stocks. While fundamental analysis involves analysis of a vast array of facts and figures, we would like you to look at attempt to guide the reader in the gold market. Please Read: Does Gold Investing Intimidate you? Discover the Right Parameters for Astute Judgement
Gold Road Resources Limited (ASX: GOR)
The company operates Gruyere gold mine in a joint venture with the global behemoth miner- Gold Fields. The top-tier gold mine of the company contains a life-of-mine of 12 years with a production rate of 300,000 ounces of gold per annum at an all-in sustaining cost (or AISC) of $1,025 per ounce.
The Gruyere gold mine is currently operating at the throughput of 8 million tonnes per annum and contains 3.92 million ounces of Ore Reserves and 6.61 million ounces of Mineral Resources.
The Measured, Indicated, and Inferred Mineral Resources of the Gruyere JV stands at 155 million tonnes with an average grade of 1.32g/t of gold, while the Proven and Probable Ore Reserves of the JV stands at 97 tonnes with an average grade of 1.25g/t of gold.
Gold Road further anticipates the all-in sustaining cost to decline in the coming years to AISC, ultimately reaching approx. $8,00 per ounce by 2030. However, the production is also anticipated to witness a slight decline post a boom in 2024.
AISC and Production Projections for Gruyere Gold Mine (Source: Company’s Report)
Presently, GOR is outperforming the S&P Commodity Producers Gold Index Total Return with 34.54 per cent on a YTD basis (benchmark adjusted).
YTD Returns of GOR and SPCPGTR (Source: Thomson Reuters)
On a YTD basis, GOR delivered a total return of 81.15 per cent, while the total return delivered by the S&P Commodity Producers Gold Index stands at 34.65 per cent. The S&P Commodity Producers Gold Index tracks the performance of the global gold mining stocks and contains some of the prominent names like Barrick Gold Corp, Newmont Gold Corp, Kirkland Gold Corp, etc.
On the price-performance counter, the stock is up by 1.88 per cent, while the ASX All Ordinaries Index is up 2.94 per cent, and the sectoral index (S&P/ASX 200 Materials) is up 2.34 per cent (over the last 5 days). Over the medium to long-term, the company has outperformed both the general index and the sectoral index on ASX.
GOR Relative Change Against All Ordinaries and S&P/ASX 200 Materials (Source: Thomson Reuters)
In a nutshell, the Gruyere Gold mine is under production from June 2019 and it also contains large resources. GOR is defining further gold resources at its Gilmour and Renegade gold prospect and is currently outperforming its sectorial index and global gold producers index.
The stock last traded at $1.170 (as on 4 November 2019), up by 7.834 per cent against its previous close on ASX.
Resolute Mining Limited (ASX: RSG)
RSG is an Australian gold mining company with exposure in Africa, a region much believed to be underexplored. RSG hosts three key projects in Africa, namely, Syama Gold Mine in Mali, Mako Gold Mine in Senegal, and Bibiani Gold Mine in Ghana, and also owns and operates Ravenswood gold prospect in Queensland.
The Syama Gold Mine contains a life-of-mine of 14 years with 8.2 million ounces of Mineral Resources and 3.4 million ounces of Ore Reserves with an average all-in sustaining cost of USD 746 per ounce (over the life of mine). The plant at the Syama gold prospect operates at 4 million tonnes per annum with a target production of 300,000 ounces per annum.
- The recently acquired Mako Gold Mine of the company contains a life-of-mine of 7 years with 1.2 million ounces of Mineral Resources and 0.9 million ounces of Ore Reserves.
- The plant capacity at the Mako gold prospect is 2.3 million tonnes per annum, and the production average AISC is at USD 780 per ounce (over the life of mine) with a targeted production of 140,000 ounces of gold per annum.
Another Gold Prospect in Africa- Bibiani contains a life-of-mine of 10 years with 2.5 million ounces of Mineral Reserves and 3 million tonnes per annum of plant capacity. The targeted production of the mine is 100,000 ounces at an average AISC of USD 764 per ounce (over the life of mine).
In Queensland, the Ravenswood gold prospect of the company contains a life-of-mine of over 10 years with 5.9 million ounces of Mineral Resources and 2.7 million ounces of Ore Reserves. The nameplate capacity of the plant is at 5 million tonnes per annum with a targeted production of 200,000 ounces per annum with an average AISC of USD 823 per ounce over the life of mine.
The gold prospects of the company currently host 18.8 million ounces of Mineral Resources and 7.7 million ounces of Ore Reserves.
However, despite excellent exposure to international gold resources, the stock is relatively underperforming the global gold stock benchmark of S&P Commodity Producers Gold Index by 26 per cent.
YTD Returns of GOR and SPCPGTR (Source: Thomson Reuters)
On a YTD basis, RSG delivered a total return of -0.43 per cent, while the benchmark delivered the return of 34.65 per cent.
RSG Relative Change Against All Ordinaries and S&P/ASX 200 Materials (Source: Thomson Reuters)
On the price-performance counter, the stock is up by 3.65 per cent, while the ASX All Ordinaries Index is up 4.74 per cent, and the sectoral index (S&P/ASX 200 Materials) is up 4.12 per cent (over the last 5 days).
To summarise, RSG contains decent gold resources; however, the miner is currently underperforming the global gold producers index.
The stock last traded at $1.150 (as on 4 December 2019), up by 1.322 per cent against its previous close on ASX.
To know more about the Australian gold industry, export figures, and mining operation of ASX-listed gold mining companies, Please Read: ASX Gold Stocks At The Brim Of The Rejuvenating Gold Industry In Australia
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