Chaarat Gold Report Excellent Results In 2020, Lens on Gold Stocks

Source: Phongphan, Shutterestock

Summary

  • Rising production levels and commodity prices have fuelled the growth of Gold stocks.
  • Gold stocks can be an immaculate solution to take indirect exposure in physical Gold.

Chaarat Gold Holdings Ltd's (LON: CGH)  latest results reveal that the firm has moved into profits in 2020, driven by the increased production in its Kapan mine located in Armenia. During the second half of 2020, the Gold miners were benefited by increased production, rising commodity prices, and so did Chaarat Gold Holdings. The precious metal miner’s revenue was up by 12.5 per cent to US$76 million in 2020.

Due to significant improvement in operating performance at Kapan and lower overhead costs at both corporate and Kyrgyz Republic level, the company’s witnessed an EBITDA of US$9.3 million in 2020 (2019: loss of US$12.8 million). Despite the unprecedented challenges posed by the pandemic, the miner managed to achieve an operating profit of US$1.9 million in 2020, compared to a loss of US$18.4 million in 2019. By the end of 2020, the miner’s cash balances soared to US$6.9 million (2019: US$3.6 million).

The precious metal miner proactively raised an equity capital of US$13.8 million to strengthen its balance sheet in 2020 during the first wave of the pandemic. This move by the company helped it reduce the gross debt and interest costs. Shares of Chaarat Gold have yielded a price return of 7.10 per cent since January so far. Chaarat Gold has a market capitalization of over £175 million.  

Also read: Which Are the 5 Best Gold Stocks to Watch in April?

Copyright © 2021 Kalkine Media Pty Ltd. 

                                         

Let us put our lens at some other Gold stocks listed on the LSE.

Fresnillo Plc (LON: FRES)

FTSE 100-listed metals & mining business Fresnillo reported a strong financial performance as it announced an increase of 14.9 per cent year-on-year to US$2,608.1 million in Adjusted Revenue in 2020, driven by higher gold and silver prices.

During the FY2020, both gross profit and EBITDA rose by 90.5 per cent and 73.4 per cent increase year-on-year to US$879.4 million and US$1,169.1 million, respectively. The company recommended a final dividend of 23.5 US cents per share for the year 2020. Notably, the annual dividend yield of the company stood at 2.6 per cent, is at par with the sector.

Due to vicious nature of the Covid-19 pandemic prevalent in Mexico, Fresnillo is expected to take a more prudent approach for 2021. Fresnillo expects attributable production in the range of 675 to 725 koz of gold and 53.5 to 59.5 moz of silver (including Silverstream) in the year 2021. Shares of Fresnillo have yielded a price return of 37.29 per cent in the past one year. Fresnillo has a market capitalisation of over £6,714.57 million. 

Polymetal International Plc (LON: POLY)

Polymetal International is among the world’s leading producers of Gold known for strong growth along with a robust dividend yield. Amid a challenging global backdrop in 2020, the precious metal miner reported an increase in revenue of 28 per cent to US$ 2,865 million. Driven by higher production volumes and commodity prices along with lesser cash costs, the company reported an increase of 57 per cent year on year in adjusted EBITDA that stood at US$ 1,686 million.

Also, the Gold sales in 2020 were in line with production volume trends, up by 2 per cent year-on-year to 1,392 Koz. During 2020, the precious metal miner managed to reduce its net debt to US$ 1,351 million (31 December 2019: US$ 1,479 million). The board of the company has proposed a final dividend of US$ 0.89 per share in the light of strong balance sheet and underlying business performance in 2020. Notably, the annual dividend yield of the company stood at 6.56 per cent. Polymetal International has a market capitalisation of over £6,869.68 million. 

Centamin Plc (LON: CEY)

FTSE 250-listed Gold mining company Centamin’s share surge was driven by improved commodity pricing along with improved operating efficiencies and productivity that helped the company in delivering solid financial performance in 2020.

The company recorded 468,681 ounces of Gold sales at an average realised gold price of US$1,766 per ounce that led to record revenue generation of US$829 million in 2020. During the period, the precious metal miner recorded a 54 per cent increase in EBITDA to US$439 million. The company is debt free and has a strong balance sheet with liquid assets of US$310 million, as of 31 December 2020.

The free cash flow of Centamin has grown at a healthy rate of 91 per cent to US$142 million, which enables the company to propose and pay dividends worth US$104 million in 2020.  The board has proposed a final dividend of 3 US cents per share for 2020. Also, the board intends to pay a minimum US$105 million in annual dividends during 2021. Centamin has a market capitalisation of over £1,272.13 million. 


Disclaimer
The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is not authorised or regulated by the Financial Conduct Authority to provide regulated advice. The purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. The Content is guidance about the different types of investments that are available and sets out general principles to continue before making investment decisions. Kalkine Media is neither authorised nor qualified to provide regulated investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from an appropriately authorised and/or qualified financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.