Good afternoon
Strong numbers in the US from Durable Goods, Personal Spending and New Home Sales
Gold ETf´s saw some pretty massive outflow - 840.000oz over the last two days.
We have seen a heavy fall of gold recently and I guess mainly because of this outflow -but it looks like the 200-day moving average could hold the fall at around 1800 US$. As I have pointed out so often, there are numerous reasons to hold gold and/or gold stocks! I think the current ewakness across the board offers us some nice opportunities.
company performance since 30.9.2019 performance since 30.9.2020
Evolution + 7,7% - 15,1%
Northern Star + 13.4% - 8,2%
Ramelius +51% - 17,8%
Perseus + 56% - 19,7%
Resolute - 46% - 18,2%
West African + 69% - 23,3%
As can be seen - share prices have fallen regardless of the production costs recently. West African should have by far the lowest leverage to the gold price, with AISC for the mine expected to be below 600 US$ …but the stock has risen the most previously, making it easier for investors to sell it! I think this is my best buy in the gold sector, followed by Perseus, which looks like bringing Yaoure into production in December without too much trouble. And last but not least - Evolution for consistency, good management and a turnaround of the North American aquisition! On the charts, I think EVN as well as PRU have 5-6-7% downside risk - WAF are at buying level already. If you are a large fund, EVN is the most interesting - WAF for others.
West African Resources - are continuing to drill, and continuing to increase underground production. The mine is fully staffed now, exploration drilling at Toega is starting just about now. And the election last weekend has been done without any trouble. The recent fall is a great buying opportunity, in my opinion!
Strike Energy/Warrego - APA, the pipeline operator, will be building a pipeline, conencting the Perth Basin with the Eastern Goldfields. So far, these guys are getting their gas from the North Westv Shelf, 2-3 times the distance. This will undoubtedly inspire more demand, as gas will become cheaper to replace diesel! Excellent news for the Perth Basin gas producers/developers! Strike/Warrego should reach the main gas-bearing zone before Christmas…hopefully and probably - giving us another reason to celebrate!
Galaxy - big demand for lithium stocks does not seem to go away…the Perth-based company is raiding these funds underwritten, at 1,70 A$ -just a 8% discount, and will use them to bring their Chilean brime-project into production by 2022. My favourite is still Liontown - exposure to a great lithirm hard rock project in Australia, and also a look-a-like project to Julimar, being so succesully explored by sister-company Chalice ( which has hit a new high today! ).
Poseidon Nickel - Peter Harold´s new company is starting to look interesting, the main reason being their discovery of high grade nickel at Black Swan. The first nice intersection in April 2020 was 23m with 4% Ni, the second one in August 9m with 10% Ni, and theird one was announced today , 6.4m with 9.6% Ni. There is also significant potential from a downhole EM surrvey, which indicates more upside….and recent footwall EM plates identified show potential for a different, mineralized system. I do not own any, as I have quite a bit of Ni-exposure via Panoramic and Centaurus - but I am tempted to back Peter Harold again on this one…
have a nice evening
WS