3 gold stocks to buy amid fear of economic slowdown

Highlights

  • Gold as a metal has multiple applications across different industries. Besides industrial use, gold has a connection with the country’s monetary system as well.
  • Higher gold prices in the international market are positive for gold mining companies.
  • Fresnillo Plc, Greatland Gold Plc, ARC Minerals Limited are gold stocks in focus.

Gold as a metal has multiple applications across different industries. It is used in electronic and electric industries, medical devices, and many other industries. Besides industrial use, gold has a connection with the country’s monetary system as well. In the past, Gold Standard was used by many countries were in currency or paper money value was linked to the gold price.

Most importantly, gold is considered a safe haven investment by investors. Also, gold prices tend to move upside whenever there are some negative sentiments in the global markets like economic recessions, the war-like situation between countries. During the start of the Covid-19 pandemic, gold prices rose by over 25%.

Higher gold prices in the international market are positive for the gold mining companies as they are able to sell their inventories at a higher average realised price, benefiting the company’s revenue and profitability. Let us explore FTSE listed three gold mining stocks, Fresnillo Plc, Greatland Gold Plc and ARC Minerals Limited:

Gold Stock to buy

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Fresnillo Plc (LON: FRES)

FTSE100 listed company is one of the largest gold producers in Mexico. Besides gold, the company also does the exploration of silver, lead and zinc. Its principal mining project is located in Mexico.

The company reported a 37.1% rise in the half-yearly revenue mainly due to higher precious metal prices and a boost in production. The company’s gold production rose by 12.3% at 428,356 oz, while its silver production was at 27,530 koz, up by 2.7% during the period. As a result of higher volume, the company was able to generate adjusted revenue of USD 1,543.1 million.

The company is on track to achieve its full-year production guidance of 53.5 to 59.5 moz of silver and 675 to 725 koz of gold. Also, the company is expected to reduce its estimated capital expenditure to USD 580 million from USD 680 million.

Fresnillo Plc’s current market cap is £5,951 million, while its current dividend yield stands at 3.1% as of 8 October 2021.

Greatland Gold Plc (LON: GGP)

The company’s primary mining project is located in Western Australia, and it does the exploration of gold, nickel, cobalt, and other industrial base metals.

The company’s flagship mining asset is Havieron gold-copper deposit, which is located in Western Australia. The company is developing the mining site along with its joint venture partner Newcrest Mining Ltd. The company will soon release a pre-feasibility study regarding the gold-copper deposit at the mining site.

The company also operates other mining sites at the same location. These mining sites are currently undergoing a drilling program to investigate the potential reserve at the site and the feasibility of commercial production. 

Greatland Gold Plc current market cap is £781.02 million as of 8 October 2021.

ARC Minerals Limited (LON: ARCM)

The company does the acquisition and development of mining projects in different African countries. It does the exploration of copper, cobalt, and gold. 

The company has announced that it has found sulphide copper mineralization at its Zambia mining project. It is the most significant copper sulphide discovery since the start of the company’s various drilling campaigns.

The company is currently in the growth stage of the business cycle and carrying out various drilling programs to unearth reserves of copper, gold, and other base metals at its mining sites. 

ARC Minerals Limited current market cap is £40.14 million as of 8 October 2021.

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