Gold Mining Stocks Charge into Overdrive
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.
Gold & Gold Equities Performance May 4th-8th, 2020
Federal Reserve Keeps on Printing
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.
Gold: History Doesn’t Repeat Itself, but it Sure Does Rhyme!
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.
Shandong Gold Acquires TMAC Resources (TMR)
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.
TMAC Resources 5-Year Share Price
IAMGOLD (IAG) Q1 Earnings
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%.
IAM Gold Share Price May 4th-8th, 2020
EPS came in at a loss of $-0.01/share versus consensus estimates of $0.03/share. IAG’s 2020 production guidance was revised lower to 685-740koz, -2% below their previous guidance 700-760koz. Additionally, cash costs and and all-in sustaining costs were revised higher, 5% and 8% respectively.
IAMGOLD – 2020 Updated Guidance
Kirkland Lake (KL) Q1 Earnings
Kirkland Lake reported Q1 results that were in-line with street consensus pre-market on May 6th, the stock traded down -3% that day.
Kirkland Lake completed it’s acquisition of Detour Gold on January 31, 2020, Detour Lake is a large-scale open pit mine located in Northern Ontario that will provide KL with a pathway for production growth.
Kirkland Lake YTD Share Price
EPS ($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.
Kirkland Lake Q1 2020 Results
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