Gold, also known as yellow metal, is considered as a haven during the times of economic or geopolitical tension. Investing in the stocks of gold miners is interesting, as gold mining is challenging and complex; however, it does come with the allure of high rewards.
Identifying a good gold mining/exploration stock can take quite a bit of research and arriving on a decision means choosing companies with a good track record. But what are the factors that an investor needs to consider while deciding on injecting his/her hard-earned money into gold miners and associated companies.
Below discussed are some of the key factors that an investor needs to consider for successful investing in gold mining/exploration stocks.
- Effective Management - Find companies with management teams that succeeded in the past. Management that has a vested interest in the success of the company continues to do a great job of improving operations, reducing costs, managing resources effectively and seeking out new resources, thereby protecting your investment.
- Financial Position - It takes a lot of capital to develop and run a mine, so an investor needs to consider a miner that have deep pockets and a sound financial record. Check their current cash position and outstanding debt. Moreover, examine the ability of the company to obtain necessary financing.
- Mine Location – Mining is a politically vulnerable business and often involves difficult jurisdictions in poor regions of the world. Thus, companies need to have good relations with the community and government departments in such locations. However, preferably pick companies that are operating in secure and politically stable regions.
- Mining Costs – The higher the grade of the gold ore, the lower the mining cost per ounce and vice versa. Pick low-cost miners, as they have a greater chance of creating long-term shareholder value.
- Reserves – Seek companies with strong reserves or those that are already producing. Check for how long the company’s reserves are going to last. The companies with low reserves are required to deliver consistent success in their exploration activities for boosting the mine production.
- Infrastructure – Check whether the mines or the projects of the company have well established infrastructure like access to roads and water supply.
- Collaborations – Usually, good mining stocks are those that are backed by some partners that have agreed to pay for the drilling costs or other exploration/development activities.
- Ability to Address Operational Concerns - As mentioned above, gold mining is a difficult business. Check the ability of the company to address environmental concerns, political concerns and internal issues like workers going on a strike.
Finalising a valuable nugget can take a lot of effort and time; however, when you decide to locate a gold mining stock capable of delivering valuable returns, all the efforts and time spent are worth.
Investing in gold stocks can be highly volatile; however, when done with research they often result in good long-term investments.
Advanced Gold Explorer, Alice Queen Limited – A Market Darling
Alice Queen Limited (ASX: AQX) is an advanced gold and copper exploration company, which has delivered more than 123 per cent return to investors in the last one year. In the near future, the company is expected to deliver on its planned activities, as Alice Queen is progressing well with its project portfolio in Australia.
AQX Project Portfolio
- Horn Island Gold Project in the Torres Strait in far north Queensland
- Kaiwalagal project the Torres Strait
- Mendooran Copper/Gold Porphyry Project in the Molong Volcanic Arc in central New South Wales (NSW)
- Yarindury Gold Project in NSW
Key Facts about Alice Queen Limited
- Management- AQX has an experienced team of mining executives with the requisite corporate and technical skills
- Capital- The company is backed by a broad base of investors including a new major shareholder – Datt Capital
- Infrastructure- Its flagship project - Horn Island is well supported by key infrastructure including airport, ferry terminal and port, water supply, and 4G telecommunications
- Collaboration- Joint Venture with St Barbara Limited (ASX: SBM) providing funding for further project exploration targeted towards reinforcing Horn Island as a gold project with true potential
- Reserves- Horn Island Gold Project is believed to have a pit deposit (JORC 2012) of 7.9Mt with grade of 1.9 gram per tonne gold for 492,000 ounces
- Project Potential- Discovery of significant porphyry gold-copper mineralisation nearby other major project of Alice Queen Limited - Yarindury Project
Stock Price Information
The stock of Alice Queen has delivered excellent returns of 38.10 per cent and 107.14 per cent in the last three and six months, respectively, while the year-to-date return of the stock stands at 61.11 per cent. The stock last traded at $ 0.029 on 10 December 2019 with a market cap of 23.14 million and 798.04 million outstanding shares.
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.
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