- Gold price reached a record high in 2020, and the market conditions remain extremely positive for further opportunities.
- Platina Resources is focused on unlocking value from its gold assets in Australia.
Amid the extremely uncertain market conditions in 2020, gold proved again why it is called the safe heaven, with investors making a beeline to entrust the precious yellow metal with their hard-earned cash. It is no secret that gold prices skyrocketed during the pandemic, creating extremely favourable conditions for gold-related projects.
In 2021, the precious metal continues to shine brighter, maintaining an extremely positive outlook.
Few of the tailwinds that contributed to gold rally, making it one of the best-performing assets of 2020, were low-interest rates, positive price momentum mainly during summer and spring, and gloomy economic conditions. The pandemic-induced circumstances saw gold price reach an all-time high during August 2020, surpassing USD 2,000 an ounce. Last year, gold price averaged about US$1,780 an ounce.
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As per the Resources and Energy December 2020 report, gold price is expected to reach USD 1,560 an ounce in 2022. The Australian gold mine production is expected to reach 384 tonnes in 2021–22. Additionally, the value of gold exports from Australia is likely to reach AUD 30 billion in 2020–21, underpinned by higher export volumes and soaring prices.
Macro Conditions Fuelling Growth of the Yellow Metal
Gold is known to perform well during equity market pullbacks and high inflation periods. Such periods are characterised by high financial stress and low-interest rates, which always strengthen the gold demand. During such times, investors get concerned about the impacts of growing budget deficits which, along with increasing money supply and low-interest-rate environment, contribute to inflation.
Currently, the global economy is rebounding, thanks to the vaccine rollout programs and other encouraging government efforts. Consequently, investors are also expecting the markets to recover from the early impacts of the pandemic. The recovery is likely to be slow for some time, and relatively the stable performance of the yellow metal will encourage the opportunities.
In the light of the above, let us discuss an ASX-listed company that is focused on creating value through its strategic focus on precious metals.
Platina Resources Focuses on Gold Assets to Leverage the Emerging Opportunities
Last year, when the pandemic unleashed its fury worldwide dealing devastating blow to industries, Platina Resources (ASX:PGM) was quick to foresee the upcoming opportunities amid the record gold prices. Consequently, the Company strategically decided to focus on gold assets in Australia.
The Company maintains promising gold assets to get the most out of the emerging opportunities.
Challa Gold Project: The project sits within the prolific gold producing district of Western Australia between Mt Magnet and Sandstone. The 100%-owned Challa Gold project has two exploration licences covering an area of 293km2. The region attracts copious corporate interest on account of its lucrative location, offering a wide range of development options with four processing mills situated nearby.
Image source: ASX announcement dated 16 Feb 2021
The tenements are covered by shallow outcrop and hold prospects for a huge amount of gold metal. Moreover, the project field remains largely untapped, having undergone the slightest of modern exploration.
PGM performed Phase 1 soil sampling at the project in late-2020, which returned gold grades of 1.62g/t and 5.89 g/t. Phase 2 sampling program was concluded in February. The company is now planning to conduct phase 3 drilling to follow up on the targets defined from soil sampling.
Mt Narryer Project: Located in the western Yilgarn Craton region, the project application E09/242 is for an area of 165km2.
Just like Challa Gold Project, Mt Narryer has undergone little modern exploration. The best rocks are located between Archean granites, sediments, and gneisses. Platina Resources is waiting for the tenement to be granted, then it plans to begin the soil sampling program.
PGM was trading at AUD 0.045 on 12 March 2021 (AEDT 2:32 PM), up 4.651% from its previous closing price.