Musk Effect: Where ASX-Listed Gold Miners Stand Amid Record Rally of Bitcoin

  • February 10, 2021 01:49 PM AEDT
  • Hina Chowdhary
    Director, Equities Research Hina Chowdhary
    1706 Posts

    Hina Chowdhary is the Director, Equity Research at Kalkine and has an extensive experience of about 15 years in the area of Research, which includes 5+ years in Equities Research particularly.She has earned a Master of Science degree from the renowne...

Musk Effect: Where ASX-Listed Gold Miners Stand Amid Record Rally of Bitcoin

Summary

  • The news of Elon Musk’s investment in bitcoin pushed cryptocurrency to record highs.
  • There is something to cheer for gold investors too. Tesla plans to invest in gold bullion and ETFs as an alternative investment measure.
  • Gold is trading around $1,835 per ounce in the spot market.
Gold MTF non-AMP

Electric car maker Tesla, Inc. (NASDAQ:TSLA) recently disclosed an investment of $1.5 billion in the digital cryptocurrency space. In its annual report, Tesla unveiled an initiative of investment in alternative assets, including cryptocurrency and gold. The EV maker also highlighted plans to accept bitcoins as payment for car purchases.

As the news broke, bitcoin crossed its all-time high mark of $44,000 per coin. Earlier, companies like Square and MicroStrategy had also publicly announced their investment in cryptocurrency space.

Copyright © 2020 Kalkine Media Pty Ltd.

More on the News: Bitcoin Hits Record $44,500-Mark On Tesla’s $1.5-Billion Investment

Gold is also on the radar of Elon Musk, founder member of Tesla. The yellow metal was the hottest commodity of 2020.

After touching the level of $2,000 per ounce, the precious metal is trading around $1,835 per ounce in the spot market. As the US dollar is gaining momentum, the sheen of gold seems to be declining.

Gold Price Chart of 12 months (Source: Refinitiv Eikon)

As per the December 2020 edition of the Resources and Energy Quarterly report, gold consumption at the global level is expected to increase by 3.1% in 2021. The global jewellery demand is forecast to expand by 30% in 2021. The main drivers of this demand are anticipated to be India and China, as per the industry analysts.

Interesting Read: How is the Gold Market Unfolding for ASX-listed Gold Stocks in 2021?

Amid the record-breaking price rise in bitcoin, and investment announcement by the world’s richest person in the gold bullion market, let us walk through few of the ASX-listed gold explorers.

Newcrest Mining Limited (ASX:NCM) is among the biggest ASX-listed gold miners. The Company has gold assets in Australia, Papua New Guinea, Canada, and Ecuador. It is engaged in the exploration and mining of copper and silver apart from gold. The Company has a market cap of around A$20 billion.

Newcrest produced 535,477 ounces of gold at an AISC of A$968/oz during the December 2020 quarter. The Company has given a gold production guidance range of 1.95-2.15 Moz for FY21.

The stock traded at A$25.175 on 10 February 2021 (AEDT 12:59 PM).  

Evolution Mining Limited (ASX:EVN) announced the gold production of 180,305 ounces for the December 2020 quarter. All-in Sustaining Cost (AISC) stood at A$1,166 per ounce. The FY21 guidance range for gold production is around 670,000-730,000 ounces.

Mine operating cash flow stood at around A$258.9 million, and the Company reduced its debt from A$93.4 million to A$86.9 million during the December quarter.

EVN is also engaged in the production of copper and silver. The Company operates goldfields in Australia and Canada. Most of the projects are located in Australia. Its Red Lake Project is in Ontario, Canada.

EVN traded at A$4.715 on 10 February 2021 (AEDT 1:03 PM) with a market cap of A$7.91 billion.

Northern Star Resources (ASX:NST) announced gold production of 244,309 ounces for the December 2020 quarter. The Company reported an unaudited NPAT for the quarter in the range of A$75-85 million. The operating mine cash flow stood at A$290 million for the quarter.

Northern Star has provided the gold sale guidance in the range of 940,000-1,060,000 ounces for FY21.

The Company operates four gold projects in Australia, including Yandal Gold Operation, Kalgoorlie, Pogo, and KCGM (50%).

The stock of NST traded at A$12.230 at around 1:08 PM (AEDT) on 10 February 2021 with a market cap of A$8.81 billion.  

 

 


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