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Commodity-linked ETFs have marked a capital inflow surge over the recent rise in the commodity prices. As per the data, over US$5.0 billion of capital marked an inflow in the commodity-linked ETFs till June 2019.
The recent upsurge in gold brought more than US$139 million of capital inflows in gold-linked ETFs alone. The gold prices skyrocketed over global cues and the United States Federal indication over a possible interest rate decline, which in turn, reduced the dollar valuation and supported the gold prices.
The gold rush has marked interest from shark investors as well, and as per the data, SPDR Gold shares received over US$1.5 billion of inflows on 25th June.
More than gold, the recent escalation in middle east tension and the war situation between the United States and America have seen oil prices jumping high in June 2019, which in turn, marked a capital inflow of more than US$420 million.
The global uncertainty is pulling the Gold-ETF demand, and in the first quarter of the year 2019, assets in European gold-backed ETPs reached the level of 1,121.4 tonnes, which in turn, mark a value of US$48 billion. The European gold-backed exchange traded products now accounted for 45 per cent of the global exchange-traded product market.
Source: World Gold Council
Gold Price Trend:
XAU Daily Chart (Source: Thomson Reuters)
On a daily chart, the gold prices have crossed the initial hurdle offered by the downward sloping trend line. Post witnessing a Golden Cross (Bullish signal) of 200 and 100 days exponential moving average on a daily chart; the prices rose; however, the prices corrected and took the support of 200-days EMA and managed to breach the first hurdle.
Presently, the prices have almost reached the level of 161.8 per cent of the projected Fibonacci Series, which is at US$1443.93, where the prices are expected to take a short-term hurdle. The investors should keep a close eye around the level as a break above or failure to do so would decide further price action in gold.
While, the gold prices are skyrocketing, and the related ETFs are showing large capital inflows, let us take a look at the gold miners as well, as, the gold rush supports the gold mining companies fundamentals.
The high gold prices help miners to realise higher price amid high sales proceed, which in turn, boost the balance sheets of the company, and all this could translate to uptick in the share prices as well.
ASX-Listed Gold Miners:
Predictive Discovery Limited (ASX: PDI)
PDI is a gold miner with many gold projects in Africa. The project portfolio of the company is spread across Burkina Faso, Cote DâIvoire, and Guinea. In Burkina Faso, the gold prospects of the company include Bongou Area, Bira Area, Tambiri, and many other such permits.
In Guinea, PDI holds three prospects in the Siguiri Basin, and the company recently inched up its landholdings in the Siguiri Basin. PDI recently commenced drilling at Ferkessedougou North.
Latest Update: In an announcement made public by the company on 4th July 2019, PDI mentioned that the company received a new Reconnaissance Authorisation which covers 100km2 over the Kaninko Project, which is approx. 10km from the Cassidy Gold Kouroussa gold deposit.
Kaninko Project: Upon the terrain-scale assessment in late 2018 and by utilising the companyâs Predictore⢠system, PDI highlighted the Kaninko area. PDIâs geologist would now commence a low-cost initial geological mapping and sampling of the artisanal sites and would further start the regional stream sediment sampling. The assay results of the sampling would be out in the next 4 to 6 weeks.
PDIâs Strategy: PDI is a gold miner with many gold projects in Africa. The project portfolio of the company is spread across Burkina Faso ,Cote DâIvoire, and Guinea. In Burkina Faso, the gold prospects of the company include Bongou Area, Bira Area, Tambiri, and many other such permits.
In Guinea, PDI holds three prospects in the Siguiri Basin, and the company recently inched up its landholdings in the Siguiri Basin. PDI recently commenced drilling at Ferkessedougou North.
Greenpower Energy Limited (ASX: GPP)
GPP is an Australian Securities Exchange listed multi-commodity miner, and the company recently entered into an Option Agreement to acquire the former gold producing mines of Camel Creek, Golden cup and Big Rush in Northern Queensland with Q-Generate Pty Ltd.
The Camel Creek mine produced over 150,000 ounces of gold in the mid-1990s with an average grade of 1.91 gram per tonne of gold. As part of the Due Diligence, GPP is compiling the available data from the Camel Creek Gold Mine, which was operated by the Golden Ant Mining from 1989-1995.
Source: Companyâs Report
The Golden Ant Mining mined a total of 1,059,696 tonnes of ore to produce 57,238 ounces of gold.
Exploration at Camel Creek Mine: GPP defined a near-surface gold exploration target at the tenement; however, the quality and grade of the exploration target remains conceptual in nature.
The down to 100m vertical depth exploration target (conceptual) is as:
Source: Companyâs Report
As per the company, a Reverse Circulation and Diamond Drilling Program, consisting of approx. 75 holes would be required to test the exploration target, and GPP would complete it within six months upon commencement. The company received high grades from its Lincoln Springs Project.
On 5 July 2019, the shares of GPP closed the dayâs trade at A$0.002 unchanged as compared to its previous dayâs close.
Emmerson Resources Limited (ASX: ERM)
ERM is an Australian Securities Exchange listed gold and copper explorer, and the project portfolio of the company includes Australiaâs most prospective geological belts. The project such as Tennant Creek Mineral Field and Macquarie Arc is in the companyâs bucket.
Latest Update: The company recently received Bonanza grades from its Tennant Creek project, and the final results from diamond drilling enhanced the future development of the company wholly-owned Mauretania project.
The significant grades received by the company are as:
The diamond drill hole identified as MTDD003 returned 20m @ 38.5g/t of gold from 92m including 4m @ 158g/t of gold from 97m.
The diamond drill hole identified as MTDD004 returned 6m @ 14.2g/t of gold from 201m including 3m @ 25.1g/t of gold from 203m.
The diamond drill hole identified as MTDD005 returned 24m @ 2.19g/t of gold from 104m including 7m @ 4.83g/t of gold from 104m, and 4m @ 1.36g/t of gold & 2.04 per cent copper, 0.21 per cent cobalt.
ERM in collaboration with the Northern Territory Geological Survey completed a Sub-Audio Magnetics geophysical survey at Mauretania and follow-up drilling at the prospect would be taken upon the integration and interpretation of all the new drilling and geophysical datasets.
On 5 July 2019, the shares of ERM closed the dayâs trade at A$0.115 up by 4.545 per cent as compared to its previous dayâs close.
Alto Metals Limited (ASX: AME)
AME is a Western Australia based gold explorer, and the project portfolio of the company in Sandstone covers 800km2 of the historic Achaean Sandstone Goldfield.
Latest Update: AME recently conducted an exploration activity on its Vanguard Sandstone Gold Project, which accounted for 38 holes. The company collected the samples from these holes and sent it for assaying to Perth. In the recent event, the company received the assay results for 14 drill holes.
Post receiving the drill assay, AME decided to resume the previously halted drilling activity to bring the total drilling to ~ 10,000m. The drilling targeted extensions of known mineralisation along the strike and depth at the Vanguard Camp, Indomitable Camp, Havilah and surrounding targets.
Some of the significant assay results from the 14 received assays are as:
Drill hole identified as SRC 122 received 4m @ 4.2g/t of gold from 100m.
Drill hole identified as SRC 123 received 2m @ 10.8g/t of gold from 135m.
Drill hole identified as SRC 124 received 5m @ 4.9g/t of gold from 37m including 1m @ 21.5g/t of gold from 40m.
Drill hole identified as SRC 126 received 12m @ 1.0g/t of gold from 81m.
AME also intersected near the surface, and the result of the surface assay is 7m @ 2.5g/t of gold.
The company intersected gold mineralisation at its Ladybird prospect previously.
Sandstone Mineral Profile: The prospects across the Sandstone contains total Indicated Resource of 1,200 kilotonnes with an average grade of 1.6g/t of gold, which would account for 65,000 ounces of gold.
Likewise, the total Inferred Resources of the prospects is at 4,180 kilotonnes with an average grade of 1.7g/t of gold, which would account for 225,000 ounces of gold.
The prospect wise resources are as:
Source: Companyâs Report
Shares of ERM last traded on 27 June 2019 at A$0.035.
Red 5 Limited (ASX: RED)
RED is an Australian gold miner, and the project portfolio of the company includes Darlot and King of the Hills gold mines. The company recently conducted an underground drill program and infill sampling of historical drill core at the King of the Hills.
The underground drilling started by the company in December Quarter 2018 to extend the resources at KOTH, marked progress with the recent infill drilling results from the 30,000M Diamond Drill Program.
The significant results from the recent 30,000m DD are as:
The drill hole identified as KHRD0195 resulted in 374.7m @ 1.24g/t of gold.
The drill hole identified as KHRD0212 resulted in 213.0m @ 1.13g/t of gold.
The drill hole identified as KHRD0245 resulted in 87.1m @ 1.92g/t of gold.
The drill hole identified as KUGC0007 resulted in 459.0m @ 1.52g/t of gold.
The drill hole identified as KUGC0009 resulted in 389.1m @ 1.15g/t of gold.
The drill hole identified as KUGC0011resulted in 309.1m @ 1.21g/t of gold.
The drill hole identified as KUGC0019 resulted in 162.0m @ 3.03g/t of gold.
The drill hole identified as KUGC0021 resulted in 174.0m @ 2.32g/t of gold.
The drill hole identified as KUGC0028 resulted in 55.0m @ 1.22g/t of gold.
The drill hole identified as KUGC0030 resulted in 135.0m @ 1.33g/t of gold.
The drill hole identified as KUGC0041 resulted in 74.9m @ 1.89g/t of gold.
The drill hole identified as KUGC0042 resulted in 70.0m @ 1.80g/t of gold.
The drill hole identified as KUGC0044 resulted in 130.0m @ 1.24g/t of gold.
The drill hole identified as KUGC0045 resulted in 130.1m @ 1.30g/t of gold.
The drill hole identified as KUGC0046 resulted in 130.4m @ 2.10g/t of gold.
The RED 5 Managing Director stated that the latest results bode well for the company and provides additional support for the companyâs possible plans to develop KOTH as a stand-alone bulk mining and processing operation.
On 5 July 2019, the shares of RED closed the dayâs trade at A$0.210 up by 7.692 per cent as compared to its previous dayâs close.
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