April 7th, 2022 | 14:35 CEST
Newmont, MAS Gold, Barrick Gold - This will be the hard currency
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"[...] We knew the world was rapidly electrifying and urbanising and needing significant amounts of copper to do so. [...]" Nick Mather, CEO, SolGold PLC
Gold as a crisis currency and inflation hedge
The current times are difficult. First, the Corona pandemic, then the flooding of the markets with cheap money by the central banks. With the Ukraine conflict, we face an uncertain future concerning further inflation rates. The Fed wants to combat the high inflation rates with several interest rate hikes. However, whether it can achieve this without stalling the already sputtering growth engine seems at least doubtful. Therefore, a well-diversified portfolio with a gold share of at least 10% is more than reasonable. In addition to buying physical gold such as bars or coins, investors should add the largest gold mining producers, such as Barrick Gold or Newmont, to their shopping cart for the long term. On the speculative side, there are also exploration companies that have historically outperformed the market, assuming a long-term rise in the gold price.
MAS Gold with solid development
One company in this category is MAS Gold, which has a market capitalization of just EUR 10.19 million. The team around CEO Jim Engdahl, which has decades of experience, focuses on one of the best mining regions globally, the La Ronge greenstone belt in Saskatchewan. Over 1 million ounces of gold are still believed to be in the ground in the area, which is equipped with world-class infrastructure. Since the 1940s, exploration has outlined numerous gold deposits and showings, including past producers such as the Komis, Jolu, Star Lake, Contact Lake, Roy Lloyd, Golden Heart and Jasper mines.
MAS Gold's current projects include the North Lake, Greywacke North, Bakos (Contact Lake) and Point gold deposits, and the historically defined Elizabeth Lake volcanic massive sulphide copper-gold deposit on four properties totaling 34,703.4 hectares. In addition, MAS Gold announced the final closing on the purchase of the 843-hectare Preview SW property from Comstock Metals, adjacent to Preview North.
The Preview SW property is an ideal addition to MAS Gold's current portfolio of hub and spoke properties. The concept is that mineralized material from various satellite deposits will be consolidated into a centrally located processing facility at Preview North. Steven Goldman, who was appointed President and CEO of Comstock Metals Ltd. in 2019, has been appointed to the Board of Directors at MAS Gold as an independent director.
With the Preview SW deposit acquisition, company leader Jim Engdahl is moving closer to his goal of expanding gold resources to more than 1 million ounces over the next few years through ongoing and planned drilling. A significant surprise could come from economic mineability analyses, which are expected to be published in a summary resource estimate in the coming weeks. The stock is trading at EUR 0.07 in Frankfurt.
The world's leading gold company and producer of copper, silver, zinc and lead, Newmont, succeeded in doing what the gold price in USD was denied. The only gold producer listed on the S&P 500 surpassed its September 1987 high of USD 81.92 and set a new milestone of USD 83.72. Currently, Newmont has not yet been able to hold this level. Thus, there is a risk of a double top and a fall back to the level of around USD 61.00. In the long term, the title belongs in every gold portfolio, but in the short term, investors should only observe the title. In addition, Newmont will publish figures for the first quarter of the current fiscal year on Friday, April 22.
Gold could shine again as a crisis currency, but a new all-time high was just missed on a dollar basis. In addition to physical gold, shares of gold producers such as Barrick Gold or Newmont and shares from the exploration sector such as MAS Gold are suitable for diversification.
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