Five ASX listed gold stocks to look at in Sep 2021 

Highlights

  • Gold prices are on the move because of an uncertain pandemic.
  • Shares prices of gold miners often follow the gold price trajectory, though other factors do contribute to price volatility.
  • While gold has been given uneven returns, few ASX gold stocks have proven profitable in 2021.

Australia is a major force in the world's gold mining and refining industry. The country has the world's largest reserves of gold and is forecasted to be the number one gold producer for 2021. Most of the gold processing before export is done locally. The Perth Mint refinery is one of the biggest in the world. 

Why should investors go for gold mining stocks?  

The persisting uncertainty arising from uneven vaccine rollouts and resurging COVID-19 cases is currently influencing the gold demand. Gold is often considered a safe-haven asset during periods of uncertainty. As a result, the prices of gold miner stocks often follow gold price movement. However, factors like production costs, aligning metal explorations, reserves and other project developments also contribute to price determination. Therefore, though gold prices have moved only AU$50/oz in six months, few ASX gold stocks are trading in red while few have made profits to date in 2021. 

Against this backdrop, let's look at five ASX listed gold stocks shortlisted based on YTD returns.  

Perseus Mining Limited (ASX:PRU) 

PRU is a West-African gold explorer engaged in mining, evaluation, and development activities. Its portfolio lies gold mines from Côte d'Ivoire and Ghana. PRU exceeded its production guidance in the June 2021 quarter as it reported a 16% hike in gold production compared to the previous quarter of March 2021 and up 50% compared with the December 2020 quarter.

                     

Five ASX listed Gold Stocks for September 2021

 

The company’s quarterly gold sales increased 23% to 106.9K ounces at an average realised gold price of US$1,652 per ounce, 1.5% above the prior quarter.

In FY21, PRU experienced a net profit after tax of 48% and an EBITDA growth of 11%. The company will return 1.50 cents per share to its shareholders, representing a 1% yield.

As a result, PRU shares have provided its holders with almost a 12.37% YTD return as of 30 August 2021. PRU was trading at AU$1.55 per share on 31 August 2021 (1:55 PM AEST).

OZ Minerals Limited (ASX:OZL) 

Australian modern mining company OZL focuses on copper, gold and silver, exploration activities. It owns and operates the copper-gold mines Prominent Hill and Carrapateena in South Australia.   

Antas, a tiny, high-quality copper-gold mine in Brazil, is also under its control. 

In the second quarter of 2021, it reported strong operational performance. The company’s gold production increased, and cash costs lowered. 

OZL experienced a 71% rise in revenues pcp, in H1-21 ended 30 June 2021. OZL also declared a fully franked combined dividend of 16 cents per share.

On Aug 24, 2021, OZ Minerals and Resolution Minerals entered into a Farm-in and JV agreement on the Wollogorang Copper Project in the Northern Territory, Australia.

OZL has provided its investors with a 19.64% YTD return as of 30 August 2021. OZL was trading at AU$23.415 per share on 31 August 2021 (1:55 PM AEST).

De Grey Mining Limited (ASX:DEG) 

DEG is another base and precious metals explorer based in Subiaco, Australia. The company claims to be Australia's fastest-growing gold company.

Its current operations are redefining operational scope in the Pilbara region. It has come up with new gold discoveries at Hemi within its Mallina Gold Project at Pilbara. DEG's drilling results provided evidence of an increase in current Hemi resources.

In Q42021, DEG remains well funded with cash reserves worth AU$71 million. It is focusing on Hemi resources which showed potential gold resources.

Till now, DEG shareholders have earned 9.73% YTD returns on holdings as of 30 August 2021.  DEG was trading at AU$1.210 per share on 31 August 2021 (1:55 PM AEST).  

Chalice Mining Limited (ASX:CHN) 

CHN is a Perth-based precious metals explorer, with a focus on gold, nickel, and cobalt.

CHN recently announced a demerger of its gold business. It intends to pursue a demerger and IPO of Pyramid Hill and its other gold projects in the fourth quarter of 2021. The demerger will allow CHN to focus on its Julimar (Nickel-Copper) project in Western Australia. In addition, it will deliver CHN shareholders a standalone, listed Australian gold-focused exploration company having tier-1 gold discoveries in Victoria and WA.

Chalice bought an additional property surrounding Gonneville for AU$4.5 million during its June quarter, which settled in July 2021. Post this acquisition, the company holds 2,146 hectares of private land at the Southern end of the Julimar Project.

CHN shares have performed well, with a YTD return of 58% as of 30 August 2021. CHN was trading at AU$6.870 per share on 31 August 2021 (1:55 PM AEST).

Sandfire Resources Limited (ASX:SFR)  

SFR is engaged in the production and sale of copper, gold, and silver dens. It also has ores and exploration projects under its business.  The company has operations in the Asia Pacific, European and American exploration regions. In Australia, SFR explores gold from its' 100% owned DeGrussa Operations.  

In Q4-21, SFR saw copper production exceed FY21 guidance, with gold production touching the upper end of guidance.

SFR’s FY 21 results highlights:

  • Recorded sales revenue of AU$813.0 million.
  • Cash flow from operating activities was recorded at AU$471.1 million.
  • DeGrussa Operations segment EBITDA of AU$549.8 million
  • Group net profit after income tax was recorded at AU$170.1 million.

On guidance, Sandfire’s Managing Director, Mr Karl Simich commented:

Source: SFR ASX update, 31 August 2021

SFR is currently progressing towards its gold transition strategy. It has retained its control over the Sams Creek gold project in New Zealand. It is also progressing the development of a gold processing train at the DeGrussa.

SFR shares have given holders a YTD return of 18.42% as of 30 August 2021. SFR was trading at AU$6.440 per share on 31 August 2021 (1:55 PM AEST).

Bottom Line

While gold is a haven for investors, it's doesn't guarantee exceptional returns even over long. However, investing in gold-focused mining stocks can give investors the needed safety along with fast-growing returns.

Also Read: How to invest in gold stocks in Australia? 

Suggested Read: Which are the best gold stocks on the ASX? 

Australia is a major force in the world's gold mining and refining industry. The country has the world's largest reserves of gold and is forecasted to be the number one gold producer for 2021. Most of the gold processing before export is done locally. The Perth Mint refinery is one of the biggest in the world. 

Why should investors go for gold mining stocks?  

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