Gold is once again under the spotlight with the commodity trading around the record levels of US$1,740 an ounce, hitting these levels after a gap of 7 years. The global uncertainty and weak economic growth have motivated investors to flock to the safe haven asset-gold. The total ETF holding reached an all-time record high of 3,185 tonnes of Gold in March 2020.
Gold Experiencing Record Gains with Increasing Demand
Gold has become “The Commodity” replacing Crude oil which tumbled to multiyear low levels, and currently offers a return of ~12% and ~24% in US$ and $ terms since the beginning of 2020.
Gold Prices Source: World Gold Council
Gold traded at $2,683 an ounce on 17 April 2020. The growing investment in the commodity requires backing the commodity with increased supply. In fact, the demand in 2019 experienced record levels of gold buying from ETFs to 2,885.5 tonnes and the central bank’s reserves growing by 650.3 tonnes.
With the global economy plagued by Coronavirus outbreak which crossed the 2 million confirmed cases mark, the demand for gold in 2020 is expected to grow even higher. In addition, the perpetual love of India and China for gold should augur well for gold investors. The two Asian nations have contributed to almost half of the global gold demand in the past.
Australia Gold Target 2021
Australia focusses on emerging as the largest gold producer globally in 2021. The country enjoys an attractive currency exchange due to weaker $ performance against the US$, ensuring the gold producers to incur cost in local currency and realise the revenues in the US$ further maximising the margins. Australia will require a larger supply of gold in 2020 and thereafter, requiring capacity expansions and commencement of new operations.
A mining project undergoes multiple evaluation and planning stage before coming onstream. In order to commence soon, the projects are required to either be in the advanced stages of evaluation or possess early mining options.
The interest among the investors who are looking at gold players on the ASX is on the rise and one attractive gold player is First Au Ltd.
First Au Holding Key Gold Project in the WA Goldfields
First Au Ltd (ASX:FAU) owns the flagship Gimlet Gold project in close vicinity of the Kalgoorlie Goldfields. The Gimlet gold project shares its boundaries with the Horizon Minerals’ Teal gold mine (JORC Resources 289,000 Ounces) and is located almost 15km north west of Kalgoorlie in Western Australia.
The gold mining friendly regions of Kalgoorlie hosts excellent existing mining infrastructure. The au courant audience must know that Kalgoorlie accounts for Australia’s majority gold production and is one of the richest gold mining regions in the world.
First Au has also applied for a mining lease over Gimlet Mineralised zone to potentially advance to an early mining stage and utilising the mining site’s advantage of proximity to 5 operating mills for toll treatment.
First Au Timeline Source: First AU Limited
Extensive exploration programs including aircore, reverse circulation and Diamond drilling exploration program have been undertaken in the past. The maiden inferred mineral resources were estimated in April 2019 and the high grade resources offer better value generation potential.
Inferred Mineral Resources as of April 2019 at 1.3 g/t Au cut-off grade Source: First Au
$100,000 Government Grant to the Gimlet Project
Gimlet Gold has been awarded a $100,000 grant under the Exploration Incentive Scheme (EIS). First Au plans to utilise the grant for the deep diamond drilling hole with a vertical depth of 450 to 500m from the surface. With the excellent intersections observed in the moderate depth drilling holes, First Au anticipates scheduling more deeper drilling programs with depths over 150 metres.
First Au’s Flagship Gimlet Gold Project in the Western Australia Gold Fields: Must Read
Future Options Leading to Accelerated Development Options
First Au plans to undertake the following further exploration and evaluation programs-
- Advanced RC drilling Program
- Geophysics and Exploration Drilling
- Small Infill Drilling Campaign
- Further Metallurgical test works
The initial metallurgical testwork suggests a recovery of 98% for the oxide material and 78% for the upper transitional zone located near to surface. The company anticipates that the infill drilling campaign may generate additional oxide and transitional material suitable for toll treatment. The high metallurgical recoveries indicate higher commercial plausibility for a toll treatment option leading to the early commencement of the project with minimum capital requirements.
First Au traded at $0.007 a share on 16 April 2020, with a market capitalisation of $2.09 million.
First Au anticipates commencing the Gimlet gold operations at the right times when the gold prices are skyrocketing, at the right place in the neighborhood of the largest gold mines.
This website is a service of Kalkine Media Pty. Ltd. A.C.N. 629 651 672. The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is sponsored but NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. We are neither licensed nor qualified to provide investment advice through this platform.