March 9th, 2020 | 12:41 CET
Kinross Gold, Triumph Gold, Yamana Gold - the beginning of a rally
Table of contents:
"[...] Our projects are at the initial, high reward exploration stage. [...]" Humphrey Hale, CEO, Managing Geologist, Carnavale Resources Ltd.
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.
The opportunity of gold stocks in 2020
In 2008, when investors around the world panicked and sent stock markets into a downward spiral, they also temporarily pulled out of gold company stocks. As a result, the share prices of the major gold companies also went into decline. Compared to other industries, however, share prices of the well-known companies working with gold recovered quickly. In 2020 everything is a little different, as the value of most gold companies has been trading at a low level for several years.
The price of the precious metal increased
In connection with the current corona crisis, there has so far been no significant price capers among the large gold companies. The price of a troy ounce of gold has risen since last summer from under USD 1,300.00 by more than 30% to now almost USD 1,700.00. Based on this situation, it can be assumed that shares of gold companies will be able to continue to trade at a stable price of the precious metal. The large companies such as Kinross Gold with a market value of CAD 9.3 billion and Yamana Gold with a market value of CAD 5.4 billion are much demanded by investors.
Triumph Gold as takeover target
Investors wishing to enter the market at an earlier stage of value creation usually invest in exploration companies. The Canadian company Triumph Gold explores and develops its own properties in the Yukon. The company already has Newmont on board as a major shareholder with a 9% stake. The exit strategy of investors in Explorer is usually a takeover by a producer - as soon as enough data on gold reserves is available. Triumph Gold's share price is still at a low level, but this also represents an opportunity. The company's most recent market value was CAD 19.0 million.
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