Gold mining equities had a stellar week in the market, outperforming gold bullion and the S&P 500. Institutional Portfolio Managers are increasing their allocation to gold mining stocks as a way to protect downside risk related to quantitative easing and fiscal budget expansion.
The Federal Reserve has continued it’s massive balance sheet expansion, triggered by the COVID-19 pandemic. Total assets rose another $65.5 billion to a fresh record $6.7 trillion. Bank of America expects Fed’s balance sheet to rise to nearly $10tn by year-end.
In their World Gold Forum presentation, Novagold presented a heck of a chart comparing gold’s current run to it’s run in the 70s.
On Friday May 8th, TMAC Resources announced that it had been acquired by Shandong Mining at a price of $1.75 in cash (4% premium to the previous day’s trading price). TMAC has a market cap of $194 million.
Needless to say this is a negligible premium for a stock that has been over $15 in the last 5 years and over $5 in 2019. The more important takeaway is the interest of Chinese mining companies in gold assets.
IAMGOLD reported Q1 results on May 4th after-market that were below street estimates, the stock initially fell -7% on the following trading day, however it was able to recoup losses ending the day down -1%.
EPS came in at a loss of $-0.01/share versus consensus estimates of $0.03/share. IAG’s 2020 production guidance was revised lower to 685-740koz, -2% below their previous guidance 700-760koz. Additionally, cash costs and and all-in sustaining costs were revised higher, 5% and 8% respectively.
Kirkland Lake reported Q1 results that were in-line with street consensus pre-market on May 6th, the stock traded down -3% that day.
Kirkland Lake completed it’s acquisition of Detour Gold on January 31, 2020, Detour Lake is a large-scale open pit mine located in Northern Ontario that will provide KL with a pathway for production growth.
EPS ($US) came in at $0.70/share which as in-line with analyst estimates. The company had withdrew 2020 guidance on April 1st as a result of COVID-19, in this earnings result the company stated that it will release new 2020 guidance when the Detour Lake and Macassa mines have returned to predictable levels of production.
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Why have you stopped the Florida Cannibus report?
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Dont you think it's too early for Gold stocks. Consensus opinion is deflation first then inflation possibly hyper inflation. Why not wait till we go down to recent lows or even lower, S&P, 1700-1800.Gold stocks will go down with the plunging market.