First Majestic Silver, Desert Gold Ventures, Skeena Resources – The time has come

Desert Gold Ventures with bright prospects

Desert Gold Ventures, a company with significant gold projects in West Africa, is on the watchlist of many investors due to its promising developments and strategic plans. Under the leadership of CEO Jared Scharf, the Canadians have already discovered 1.1 million ounces of gold on their 440 km² flagship project SMSZ, which currently results in a market capitalization of around USD 10.60 per troy ounce in the ground.

It is noteworthy that of more than 27 gold zones discovered, only 5 have been included in the current resource estimate, which offers significant potential for future discoveries and value appreciation.

In this context, Scharf emphasizes the importance of the current high gold price of over USD 2,600 per troy ounce, which is improving the economics of the projects and will be reflected in a forthcoming preliminary economic assessment (PEA) in the first quarter of 2025. This assessment will provide crucial details on the viability of the planned mining, which initially envisages the extraction of approximately 200,000 ounces of gold from two open-pit mines. Planned production costs are between USD 800 and USD 1,300 per ounce, which could allow for high-profit margins at current gold prices.

The Company is considering covering the construction of Phase 1 with debt and possible financing alternatives, with discussions already underway with several financial groups. Production is already planned for the second half of 2025. With a market capitalization of around CAD 16.87 million, Desert Gold Ventures could become an outperformer if the targeted production comes closer.

First Majestic Silver – Caution Still Advised

The bull market in gold and silver stocks has not bypassed the recently weakening mining company from Vancouver. After forming a double bottom at USD 4.50, First Majestic Silver was able to move away from its lows, driven by rising base prices. A breakout from the horizontal resistance at USD 6.88 generated a buy signal on Friday, which could lead the stock towards its annual high from April at USD 8.44 in the short term.

It remains to be seen whether the silver producer is really experiencing a sustainable turnaround as the preliminary production figures for the third quarter were not outstanding.

The Company produced 5.5 million ounces of silver equivalent, a marginal increase of 4% over the second quarter. However, the acquisition of Gatos Silver could be a turning point for First Majestic Silver and improve the performance achieved in recent months. Gatos has recently raised its production forecasts, which should benefit First Majestic not only in terms of production volume but also in terms of cost structures and, thus, free cash flow.

In addition, First Majestic Silver resumed exploration work at the ailing Jerritt Canyon mine in Nevada in the third quarter. This mine, which was previously considered a bad financial investment, is currently out of operation. CEO Keith Neumeyer recently emphasized that there are no plans to restart operations in the coming months; even higher gold prices are not motivating this. The project's production results have been too unsatisfactory so far.

Skeena Resources – Explorer with potential

As described above, smaller producers and exploration companies have historically had the opportunity to outperform significantly during a prolonged uptrend in the gold price. One example is the Canadian mining company Skeena Resources, which is on track to become a producer in the near future. The all-time high was set in 2007 at CAD 214, while the current price is a modest CAD 13.59. A prominent resistance level is currently at CAD 16.85. If that were to be broken, a short-term move toward CAD 28 would be possible, which could mark the end of the years-long bottoming-out phase.

Skeena Resources operated the Eskay Creek project, a past-producing mine in British Columbia, Canada, from 1994 to 2008. During this time, 3.3 million ounces of gold and 160 million ounces of silver were mined. The Company is now focusing on this advanced project, which, together with the Snip project, is one of its most interesting ventures.

A major development for Eskay Creek already took place in 2017, when Skeena Resources reached an agreement with Barrick Gold that allowed Skeena to begin initial exploration work. Skeena finally acquired the mine from Barrick Gold in 2020.

Eskay Creek's strategic location is underscored by its proximity to major projects such as Seabridge Gold's KSM project and Newmont's Brucejack mine, which further highlights the region's importance and potential.

In the current gold rush, opportunities for long-term outperformance of the gold price are particularly available in smaller exploration companies such as Skeena Resources and Desert Gold Ventures. By contrast, despite the good chart-technical condition, caution is advised with First Majestic Silver after the preliminary production figures.