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Summary
- Gold spot is once again the poster boy with prices almost reaching the seven-year high to trade at $1,763.42 per ounce, leading to a splash in ASX-listed gold stocks.
- The rise in gold prices is bringing the gold exploration back as the top agenda for many ASX-listed gold mining companies such as Ramelius Resources Limited (ASX:RMS), Evolution Mining Limited (ASX:EVN).
- Post announcing encouraging drilling results, RMS has once again rewarded stakeholders with a record high production guidance for the June 2020 quarter and FY20, prompting the stock to contour a new record high of $2.130.
- Furthermore, amidst ongoing exploration drive, Northern Star Resources Limited (ASX:NST) has decided to offload its Ashburton Project in Western Australia for a deferred contingent cash consideration of $17.5 million as it no longer suits the portfolio of the miner.
- Kalamazoo Resources Limited (ASX:KZR) has emerged as a buyer of the project, and NST suggests that the royalty structure would allow it to retain exposure in the project, which has strong potential on both the exploration and production front with its JORC 2012 classified Mineral Resource of 20.8 million tonnes for 1.65 million ounces of contained gold.
Gold spot is again making it to the headlines with prices climbing above USD 1,700 per ounce and reaching to the recent high of USD 1,763.42 (as on 22 June 2020), and couple of points away from its previous seven-year high of USD 1,765.94 (as on 18 May 2020).
The rise in gold prices is mainly supported by the fear and emergence of the second wave of COVID-19 infections across many countries such as China and New Zealand, which in turn, is once again reducing the risk appetite of the global investing community and diverting a majority of their cash towards the safe haven.
Many ASX-listed gold companies such as Northern Star Resources Limited (ASX:NST), Newcrest Mining Limited (ASX:NCM), Ramelius Resources Limited (ASX:RMS) are currently cherishing over the high gold price environment and pulling all major string to fast track exploration and secure future sales.
To Know More, Do Read: Gold Retracement- Gold Exploration Once Again on Agenda- Ramelius and Gold Road
While the ongoing high exploration scenario across the continent is demonstrating some encouraging results for some miners like Ramelius Resources Limited (ASX:RMS), prompting the stock to contour a new record high of $2.130 (as on 22 June 2020).
To Know More, Do Read: Evolution Mining Downgrades FY20 Production Guidance By 1.4 per cent, Stock Under Pressure
Ramelius Upgrades June 2020 and FY20 Production Guidance to a Record High
The recent turnaround undertaken by Ramelius over its many prospects is now seeming to be bringing considerable positive outcomes with miner upgrading its June 2020 quarter and FY20 guidance to a record high.
On 22 June 2020, the Company announced that it surpassed the June 2020 production guidance of 65,000 to 70,000 ounces of gold with a record production (as on 22 June 2020) 74,371 ounces. Post witnessing a record production for the June 2020 quarter, RMS now anticipates that the June 2020 production would touch another record high with total quarterly production reaching 80,000 ounces for the period.
Furthermore, the miner anticipates a 7.14 per cent increase from the lower range of the previous FY20 guidance of 210,000 to 220,000 ounces of gold and suggests that FY20 production would now reach a record level of 225,000 to 230,000 ounces of gold.
The stock of the Company last traded at $2.155 (as on 24 June 2020 12:19 PM AEST), up by 2.133 per cent against its previous close on the exchange.
Northern Star Resources Limited (ASX:NST)
NST Divests Ashburton Project in WA
Amidst high exploration by many ASX-listed miners to boost the production and lock-in high price trade, NST decided to divest from Mt Olympus Project, which includes mostly the Ashburton Project in Western Australia for a deferred contingent cash consideration of $17.5 million as the miner assesses that the project to longer suits its portfolio.
KZR Emerges as the Buyer of 217km2 Ashburton Project
Kalamazoo Resources Limited (ASX:KZR) has emerged as a buyer of the project and would pay NST deferred contingent cash of $17.5 million, which includes $5.0 million on mining the first 250,000 tonnes of ore and a 2 per cent Net Smelter Royalty on the first 250,000 ounces of gold along with a 0.75 per cent Net Smelter Royalty on any subsequent gold produced from the tenements, which as per NST, enables the Company to retain an exposure in the 217km2 Ashburton Gold Project.
Furthermore, the same royalty structure would be applicable on any other metal produced by KZR from the tenement.
The Ashburton project, which is located on the southern edge of the Pilbara Craton in WA has produced 350,000 ounces of gold and at present holds JORC 2012 classified Mineral Resources of 20.8 million tonnes at an average grade of 2.5g/t of gold, leading to an estimated 1.65 million ounces of contained gold.
The transaction of the project is conditional on Ministerial approval and third party rights being observed, and KZR suggests that the miner would immediately commence on-site exploration, including a self-contained camp, core farm, and supporting infrastructure.
NST last traded at $13.750 (as on 24 June 2020 12:19 PM AEST), up by 2.3 per cent against its previous close on ASX, while KZR at $0.655 (as on 24 June 2020 01:59 PM AEST), down by 10 per cent against its previous close on ASX.
