Go to a mining conference at the moment and you will see a lot of long faces in one corner of the room. Those are the gold miners. But COMEX gold futures prices demonstrate how interest in gold has been building since November, partly driven by central bank buying, with many emerging economies also looking to diversify their assets away from USD concentrations.
“The risks that emerged during the lead-up to the resolution of the debt ceiling issue could leave some investors more cautious regarding their investment choices in the future and could favour gold and other safe assets for some time,” said Bas Kooijman, CEO at Luxembourg fund manager DHF Capital. “Over the longer term, gold could continue to see some support in particular if central banks expand their purchases. Central banks could shift part of their reserves toward gold with the dollar coming increasingly under pressure and seeing competition from other assets.”
With many investors considering gold miners as possible alternatives to bullion, we thought we’d bring our readers five we think worthy of consideration:
#1. Fortitude Gold [OTCQB:FTCO]
Fortitude Gold is a unique gold producer and explorer with substantial operations in Nevada and five high grade gold properties in the Walker Lane mineral belt. Its Isabella Pearl mine is currently in production. The management team is wedded to an organic growth strategy which keeps the company debt free. This also allows it to pay out substantial dividends and it offers an excellent yield coupled with the dynamics of its exposure to gold. It even paid out a special dividend last month, on top of its regular monthly dividend. Some investors just hold this one for the yield.
#2. Tectonic Gold [AQSE:TTAU]
A gold explorer with outright licenses for seven tenements covering more than 850 square km in and adjacent to New England Orogen in Queensland. Tectonic Gold wants to leverage its market-leading knowledge of IRGS deposits to become one of the world’s lower dollar-per-ounce discovery-cost gold exploration businesses. Tectonic Gold’s lead project at Specimen Hill has over 50 drill holes which are intersecting gold mineralisation and is being processed to resource definition. Tectonic has identified multi-million ounce targets previously untested at depth and under cover. IRGS systems are a new class of gold dominant intrusion-related deposit, first classified in Alaska and Canada in the 1990s.
#3. Barton Gold [ASX:BGD]
Barton Gold is looking increasingly tempting as Alexander Scanlon and his team push forward with an intriguing consolidation project in South Australia, which combines a 5000 square kilometre land package with a 1.1m ounce resource base, as well as an operational gold mill which can serve third party miners. This is a big scale project that is starting to get attention with shares doubling in price since October, in a depressed market for mining stocks. The company just announced an independent valuation report on its Central Gawler Mill has and associated infrastructure at over A$100m (A$50m on an ‘as is’ basis).
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#4. Cabral Gold TSXV:CBR
Cabral Gold has been quiet on the news front since it closed the first tranche of a private placement in November. Shares have been starting to rally in recent weeks though following Cabral’s announcement that it was commencing a pre-feasibility study on trial mining and heap leach processing of near-surface material at its flagship Cuiú Cuiú project in northern Brazil. Ultimately, the objective is to eliminate Cabral Gold’s dependency on expensive and dilutive private placement financings in order to fund further exploration and drilling within the Cuiú Cuiú district.
#5. Besra Gold [ASX:BEZ]
Besra recently got backed to the tune of $300m via a non-binding term sheet for a pre-purchase drawdown and offtake funding agreement, courtesy of Quantum Metal Recovery (also a major shareholder). This was one of the largest financings of the kind to involve an ASX-listed miner. With its issued capital now intact, Besra Gold can progress its Bau goldfield project in Malaysia’s Sarawak region. Besra currently covers 94% of the field, which has not been mined since the 1990s. Shares have been trading as high as 45 cents Australian on the ASX over the winter months, down at 22 cents at time of writing, but investors are still looking at +350% on this stock since last year.
