July 30th, 2020 | 08:33 CEST
Kinross Gold, Osino Resources, Scottie Resources - why now is the right time
Table of contents:
"[...] We have a clear strategy for neutralizing sovereign risk in Papua New Guinea. [...]" Matthew Salthouse, CEO, Kainantu Resources
Born and raised in Hannover, Lower Saxony follows social and economic developments around the globe. As a passionate entrepreneur and columnist he explains and compares the most diverse business models as well as markets for interested stock traders.
Exit in focus
Osino Resources is an exploration company focused on exploring and developing its own projects in Namibia. The company is headed by Heye Daun, who already established a gold company in 2012 and made it ready for takeover. There are parallels between then and now, as the previous company was also looking for gold in Namibia. At that time, Heye and his colleagues were able to prove around 2 million ounces and the company was valued at almost USD 100.00 per ounce in ground at the time of the takeover.
With Osino Resources, management is also aiming for the discovery of at least 2 million ounces. The company is well funded to drill a sufficient number of holes in the coming months to demonstrate the appropriate amount of gold if successful. Given that in 2012 the gold price has already fallen from its then highs and is now at record levels, it is quite possible that this development will have a positive impact on a takeover bid by a producer.
In the Golden Triangle of Canada
Scottie Resources operates in British Columbia and focuses on the exploration of its own projects in the so-called Golden Triangle. On one of the company's properties, 95,426 ounces with an average grade of 16.2 g/t have already been mined from 1981 to 1985. The other properties around the Scottie Gold Mine have similar geological characteristics. For this reason, it is clear that the company's goal is to explore the size of the gold deposits through drilling.
Scottie Resources can take advantage of the Golden Triangle's infrastructure which allows access in all weather conditions. There is also a high voltage power line nearby to provide power. Numerous gold companies operate in the area surrounding the company. It stands to reason that at a later stage of development, takeovers and mergers may also take place. It is possible that a new producer will enter the region. With Eric Sprott as investor the company has already attracted some attention.
Gold price makes profits rise
Kinross Gold is a gold producer that is active around the globe. The company has projects in the USA, Brazil, Chile, Ghana, Mauritania and Russia. According to its own information, Kinross employs about 9,000 people worldwide. Experts predict that by 2020 a global peak in gold production will be reached and a significant decline of over 40% by 2029 is expected.
In the past fiscal year 2019 the company produced about 2.5 million ounces of gold. The all-in costs were USD 983.00. With a share of 56%, the majority of the gold produced came from North and South America, 23% from West Africa and 21% from Russia. In the second quarter of 2020, the company sold 584,477 ounces of gold. All-in costs were stable at USD 984.00. Net income more than doubled to USD 195.7 million from the same period last year and was USD 0.16 per share.
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