LAS VEGAS, June 05, 2024 (GLOBE NEWSWIRE) -- Global Financial Markets Communications News Commentary - Recent months have seen the gold price move decisively into a higher trading range, and momentum return to the precious metals mining sector following three years of consolidation.
Gold has risen over 10% during 2024 so far, while gold miners have recovered the sector’s February lows. While encouraging, these returns represent only a fraction of the performance exhibited by gold equities during previous upcycles.
The potential catch-up trade for gold equities versus gold is substantial, given the extreme low valuations from which the sector is recovering. Gold miners have lagged behind gold bullion since their significant drawdown during the global financial crisis of 2008 and 2009. However they have recently shown signs of performing better:
Public companies active in the gold sector include: Seahawk Gold (OTC: SEHKF), Barrick Gold (NYSE: GOLD), Newmont Corporation (NYSE:NEM), Agnico Eagle Mines (NYSE:AEM).
Sector Highlights:
- Gold miners are historically undervalued relative to gold, a trend likely to reverse and overshoot during the forthcoming secular gold bull market.
- Gold miners have significantly reduced their debt levels in the past decade, unlike other sectors, which have accumulated more.
- Gold miners are also historically undervalued compared to the S&P 500, presenting a unique and attractive entry point.
- Merger and acquisition activity in the mining sector is vigorous, driving up premiums.
Analysts expect gold prices to be supported above the $2,000-per-ounce level in 2024, driven by expectations of a more accommodative monetary policy from the Federal Reserve. This sentiment has been amplified by slowdowns in inflation and a cooling job market. Lower interest rates could lead to a weaker U.S. dollar, making gold more attractive as an investment,
The analysts also foresee substantial support for gold prices in the coming year from robust central bank purchases. In the third quarter alone, central banks acquired 337 tons of gold, marking the third-highest quarterly total on record. The World Gold Council's 2023 survey indicates that 24% of central banks plan to increase their gold reserves over the next 12 months. The survey reveals a shift in central banks' sentiments, with a more optimistic view toward gold than the previous surveys, as 62% believe that gold will have a greater share of total reserves than 46% last year.
Against a backdrop of ongoing geopolitical instability and major global elections, including those in the United States, EU, India and Taiwan, analysts perceive that investors’ need for portfolio hedges will likely be higher than normal.
Seahawk Gold Corp. (OTC: SEHKF) has announced that the company is planning further exploration for its two properties in the Quevillon-Windfall area of north-western Quebec.
Both properties are 100% owned and adjacent to the largest gold producer in the Abitibi Greenstone Belt.
90% of ALL gold produced in Canada is from the Antibi Greenstone Belt – historically and today.
1. The Blitz property is located approximately 30 km of Quevillon, Quebec.
2. The Touchdown Property is located approximately 30 Km east-south-east of the currently being developed Windfall Lake Property of Osisko Mining Inc. and Goldfields Ltd.
Seahawk Gold has engaged Earthlabs Inc. (ALS GoldSpot Discoveries Ltd. or "GoldSpot") to review and compile all data on the Touchdown and Blitz Properties. GoldSpot is a technology company using Artificial Intelligence to revolutionize the future of Global Mineral Exploration with a full suite of data and knowledge driven SAAS tools and services.
Other recent developments in the markets include:
Barrick Gold (NYSE: GOLD) (TSX:ABX) recently reported its first quarter results which were in line with guidance and position the Company well to meet its full year targets. Gold production is expected to ramp up steadily during the year, supported by the completion of the Pueblo Viejo plant expansion and the resumption of operations at the Porgera mine.
Barrick Gold Corporation engages in the exploration, mine development, production, and sale of gold and copper properties in Canada and internationally. The company also explores and sells silver and energy materials. It has ownership interests in producing gold mines located in Argentina, Canada, Côte d'Ivoire, the Democratic Republic of Congo, the Dominican Republic, Mali, Tanzania, and the United States. The company also has ownership interests in producing copper mines located in Chile, Saudi Arabia, and Zambia; and various other projects located in the Americas, Asia, and Africa. Barrick Gold Corporation was founded in 1983 and is based in Toronto, Canada.
Newmont Corporation (NYSE: NEM) (TSX: NGT), (ASX: NEM), (PNGX: NEM) recently announced first quarter 2024 results and declared a first quarter dividend of $0.25 per share.
"Newmont delivered a strong first quarter operational performance, producing 2.2 million gold equivalent ounces and generating over $1.4 billion in cash from operations before working capital changes," said Tom Palmer, Newmont's President and Chief Executive Officer.
"Underpinned by the gold industry's leading portfolio of Tier 1 gold and copper operations, we remain well-positioned to achieve our full-year guidance and deliver meaningful synergies and productivity improvements from the combined portfolio. We remain focused on delivering on the commitments we laid out at the beginning of this year, creating an attractive value proposition for new and existing investors during this unique time in the gold industry."
Newmont Corporation engages in the production and exploration of gold. It also explores for copper, silver, zinc, and lead. The company has operations and/or assets in the United States, Canada, Mexico, Dominican Republic, Peru, Suriname, Argentina, Chile, Australia, Papua New Guinea, Ecuador, Fiji, and Ghana. The company was founded in 1916 and is headquartered in Denver, Colorado.
Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) recently reported financial and operating results for the first quarter of 2024.
"Building on a very strong close to 2023, we are reporting our second consecutive quarter of record operating margins and record free cash flow, on the back of solid operational and cost performance. With this strong start to the year, we are well positioned to achieve our production and cost guidance for 2024," said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer.
"During the quarter, we continued to advance our key value drivers and project pipeline, and our exploration program yielded significant results at Hope Bay, Canadian Malartic and Detour Lake. We strengthened our balance sheet in the quarter and our focus remains on capital discipline and cost control, while investing in our projects pipeline and providing returns to shareholders," added Mr. Al-Joundi.
Agnico Eagle Mines Limited, Agnico Eagle is a Canadian based and led senior gold mining company and the third largest gold producer in the world, producing precious metals from operations in Canada, Australia, Finland and Mexico. Agnico Eagle Mines Limited was incorporated in 1953 and is headquartered in Toronto, Canada.
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