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Summary
- Gold is shining brighter amid the volatility and uncertain situation driven by the pandemic, with investors maintaining an upbeat stance concerning the bright gold prospects.
- With surging gold prices, potential around gold sector players has significantly boomed.
- Several ASX-listed gold companies have reported excellent quarterly performances with promising guidance for the upcoming period.
COVID-19 pandemic driven volatility and uncertain situation has prompted investors towards the safe haven, with gold spot delivering an impeccable price return since the onset of the year 2020. As a tool to hedge their portfolio, investors have embraced gold in 2020, resulting in the current attractive bullion market, which is staging series of gold rallies.
Gold was trading at US$ 1991.3 an ounce at 12:59 AEST on 18 August 2020. As gold prices are repeatedly smashing new records, attention of the market is diverted towards ASX-listed gold stocks, which are also gaining traction.
Must Read: Gold Rush and Eight ASX Momentum Gainers- SAR, NST, NCM, EVN, RMS, WAF, GOR, PRU
In that backdrop, let us discuss few ASX-listed gold stocks, covering their market updates.
Ramelius Resources Limited (ASX:RMS)
During late-July 2020, RMS released its June 2020 quarterly activities report, highlighting record group gold production for the quarter and FY2020.
- Record gold production of 86,517 ounces at an AISC of AUD 1,041/oz for Q4, up from original guidance of 65,000-70,000 ounces at an AISC of A$1,000 – A$1,100/oz.
- Record full-year production of 230,426 ounces at an AISC of AUD 1,164/oz for FY2020.
- Cash and gold of AUD 185.5 million, up from AUD 125.4 million at end-March 2020 quarter.
- Net cash and gold grew by AUD 68.2 million during Q4.
- Takeover of Spectrum completed in June 2020.
- Publication of 1.45Moz Mine Plan across six years to FY2026.
Production Guidance for FY2021: The Company is expecting a new record of group gold production for FY2021, between 260,000 – 280,000 ounces at an AISC of AUD 1,230 – AUD 1,330/oz.
On 18 August 2020 (AEST: 1:26 PM), RMS stock was trading at AUD 2.090, up by 4.5 per cent.
Saracen Mineral Holdings Limited (ASX:SAR)
Saracen Mineral Holdings, on 18 August 2020, announced a new 7-year group production outlook, underwritten by reserves of 8.6Moz at 30 June 2020. The eight-year track record of SAR of meeting or beating guidance is expected to give investors much confidence in the company’s ability to deliver its next round of growth, according to SAR Managing Director Raleigh Finlayson.
On 21 July 2020, the company released its June 2020 quarterly report, highlighting
- Quarterly production of 145,830oz at an AISC of AUD 1,152/oz and FY20 group production of 520,414oz at an AISC of AUD 1,101/oz, ahead of the full-year guidance of more than 500,000oz.
- Gold sales for Q4 stood at 148,011oz at an average price of AUD 2,280/oz, generating sales receipts of AUD 338 million.
- Cash and bullion of AUD 369 million at 30 June 2020, up from AUD 339 million at 31 March 2020.
- Debt stood at AUD 321 million; Net cash of AUD 48 million at 30 June 2020, up from net debt of AUD 21 million at 31 March 2020.
- In April 2020, AUD 45 million was drawn on the revolving credit facility, repaid in June 2020.
- Gold hedging of 493,200oz at an average delivery price of AUD 2,094/oz (542,500oz at AUD 2,056/oz at 31 March).
Production guidance for FY21 remains unchanged at more than 600,000oz.
On 18 August 2020 (AEST: 1:27 PM), SAR was trading at AUD 5.725, up by 1.868 per cent.
Northern Star Resources Limited (ASX:NST)
On 18 August 2020, Northern Star Resources announced increases in production guidance. The company expects FY21 production of 940koz-1,060koz, with production forecast to rise to ~1.15Moz in FY22, ~1.25Moz in FY23 and ~1.3Moz by FY27. The increases in forecast production and more growth in Reserves and Resources follow review conducted at its half-owned KCGM joint venture in WA.
Good Read: Gold Rush and Gold Outperformers- Northern Star, and Newcrest Mining
On 23 July 2020, NST released its June 2020 quarterly report, highlighting:
- Record gold sales in the June quarter of 262,717oz at an AISC of AUD 1,475/oz (USD 969/oz)
- Australian Operations (including 50 per cent KCGM) sold a record 212,466oz at an AISC of AUD 1,360/oz (USD 894/oz)
- Pogo Operations sold 50,251oz at an AISC of USD 1,276/oz
- FY20 Group sales were a record 900,388oz at AISC of AUD 1,496/oz (USD 983/oz)
- Australian Operations sold a record 727,352oz at AISC of AUD 1,350/oz (USD 887/oz), within the stated 720,000oz - 800,000oz guidance range
- Pogo Operations mined 200,718oz and sold 173,036oz at AISC USD 1,402/oz
- During Q4, strong underlying free cash flow of AUD 218 million generated despite investing ~AUD 44 million in growth capital and exploration
- Cash, bullion and investments rose by 40 per cent to AUD 770 million at 30 June 2020
- Corporate bank debt of AUD 700 million at end-June 2020, with AUD 200 million repaid post quarter on 6 July
- Fully franked interim dividend of 7.5cps was paid on 16 July.
On 18 August 2020 (AEST: 02:31 PM), NST stock was trading at AUD 15.015, up by 5.221 per cent.
Newcrest Mining Limited (ASX:NCM)
On 14 August 2020, NCM released full-year results for FY20, delivering a solid performance for the financial year, with 2.2 million ounces of gold production at an AISC of USD 862 per ounce.
Its statutory profit stood at USD 647 million and underlying profit was noted at USD 750 million. Operating cash flow for the period was noted at USD 1.5 billion from an average realised gold price of USD 1,530 per ounce. Free cash flow before M&A activity was USD 670 million (pre ~USD 1.3 billion in major M&A investments)
The company strengthened its balance sheet with a successful equity raising to support the healthy growth portfolio. Moreover, it acquired 70 per cent ownership and operatorship of the Red Chris mine, while increasing exposure to the cash flows generated by the Tier 1 Fruta del Norte mine.
With a final dividend of US17.5 cents per share (100 per cent franked), full-year dividend stood at US25 cents per share.
On 18 August 2020 (AEST: 02:32 PM), NCM stock was trading at AUD 34.700, up by 1.7 per cent.
West African Resources Limited (ASX: WAF)
On 23 July 2020, WAF released June 2020 quarterly update, with following highlights:
Production Update
- Sanbrado achieved commercial production status during the quarter. It produced 32,626 ounces of gold during the June quarter and 40,458 ounces year to date.
- Sanbrado processed a total of 736kt ore tonnes at a mill head grade of 1.50 g/t Au and a recovery of 92 per cent in the June quarter, and 937kt at 1.46 g/t at an improvement of 92 per cent year to date.
Financial Update
- Gold sales totalled 22,225 ounces for the quarter at an average price of USD 1,727 per ounce.
- Concluded Q1 of Sanbrado operations in a robust financial position with AUD 83.2 million cash on hand and steady cash generation from operating activities.
- WAF remains unhedged and continues to benefit from recent high gold prices.
Must Read: Your guide to Investing in Gold Stocks in a Market Crash - WAF, ALK
On 18 August 2020 (AEST 02:39 PM), WAF was trading at AUD 1.070, up by 3.382 per cent.
Evolution Mining Limited (ASX: EVN)
On 18 August 2020, Evolution Mining announced that operations at the Red Lake gold mine in Ontario have resumed. The mine remains on track to deliver planned September quarter gold production.
Recently, EVN released its FY20 financial results for the period ended 30 June 2020, highlighting strong performance in safety and sustainability, with no material impact to operations from COVID-19. The company stated that it would pay a record final dividend for FY20 of 9 cents per share, fully franked, delivering a total dividend of 16 cents per share, a 68 per cent increase on FY19.
FY20 Group Highlights
- Statutory net profit after tax increased 38 per cent to a record AUD 301.6 million, while underlying net profit after tax improved by 86 per cent to a record AUD 405.4 million.
- EBITDA grew by 41 per cent to a record AUD 1,029.4 million.
- Gold production stood at 746,463 ounces with AISC of AUD 1,043 per ounce, among the lowest-cost gold producers in the world.
- Operating mine cash flow increased by 45 per cent to a record AUD 1,121.4 million, while net mine cash flow increased 48 per cent to a record AUD 736.0 million.
- Group free cash flow rose 86 per cent to a record AUD 541.8 million.
- Net bank debt of AUD 197.4 million at 30 June 2020 (cash AUD 372.6 million; bank debt AUD 570.0 million).
On 18 August 2020 (AEST 02:46 PM), EVN stock was trading at AUD 6.265, up by 2.874 per cent.
Good read: Dividend Corner: Investment Tips, Stocks Under the Scanner -EVN, CL1
