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Analyst Report Touts Ora Gold’s Crown Prince Project’s Compelling Economics
Description
Positive progress on the development of Ora Gold’s (ASX:OAU) Crown Prince project is a key factor in Argonaut Securities’ recent equity research report issuing a speculative buy recommendation for Ora Gold.
“OAU is making steady progress on its Crown Prince development targeting first production towards the middle of next year. Once in production, we expect Crown Prince to be a high-margin, open-pit operation with a ~2-year mine-life,” the report said,
The report also noted the potential for extending the mine life given recent “encouraging exploration results” at Crown Prince.
“We make a slight price target increase to $0.019 ($0.018 prior) and maintain our speculative buy recommendation,” the report said. The valuation is modeled based on Ora Gold entering production in the second quarter of 2026, with a small but high-grade open pit mine returning cash flows.
Crown Prince (JORC 2012) Mineral Resource Estimate
The project’s prospects are further de-risked by the ore purchase agreement with Westgold (ASX:WGX), the report said.
Key Highlights:
- Diamond drilling for geotechnical studies is currently underway to finalise the open pit designs for Crown Prince. Environmental studies have been completed and metallurgy work indicates excellent free milling material with total recoveries ranging between 98 to 99 percent.
- OAU plans to submit a mining proposal to DEMIRS mid to late H2 of CY2024. OAU’s cash position totalling AU$7 million is expected to fund development work up to a decision to mine. Pre-production capex and working capital requirements for Crown Prince is AU$15 million.
- An updated mineral resource estimate (MRE) is expected in October 2024. Current MRE totals 240 koz at 4.1 g/t gold with 67 percent in the indicated category.
- Despite its relatively small production size, Crown Prince is one of the highest margin development projects, with a resource that includes 164 koz shallow high-grade (5.2 g/t gold) ounces, driving a compelling economics.
For the full analyst report, click here.
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Ora Gold Limited
Investor Insight: Why Ora Gold Stands Out
For investors with an eye on mining stocks, Ora Gold (ASX:OAU) presents a unique opportunity. The company's shallow, high-grade Crown Prince gold deposit, significant land package in the prolific Murchison goldfields, and strategic alliance with established Australian gold producer Westgold Resources, positions it as a noteworthy contender in the Western Australian gold exploration space. As Ora Gold continues to navigate the path to production, its journey is one that astute investors will watch with keen interest.
Overview
Within the heart of Australia's Murchison gold district, a region host to +35 Moz gold endowment (historic production and current resources), stands Ora Gold, a forward-thinking gold explorer with a clear strategy to maximise shareholder value driven by a highly experienced management team. The company’s value proposition centres on growing and de-risking its shallow, high-grade Crown Prince gold deposit (part of the company’s Garden Gully gold project) and a strategic alliance with established Australian gold producer Westgold Resources, offering a clear pathway to production and cash flow generation.
Key Project
Garden Gully
Ora Gold’s flagship Garden Gully gold project is located c. 20 kilometres north-west of Meekatharra, Western Australia. The project boasts a 677 square kilometre tenement package that covers the Abbotts Greenstone Belt. The project includes granted mining leases and Native Title agreements in place over the Crown Prince, Abbotts and Lydia prospects. Garden Gully is in close proximity to a number of operating gold mines and existing gold processing facilities.
Ora Gold has a strong pipeline of exploration and development prospects at Garden Gully, with the most advanced being Crown Prince.
Crown Prince deposit
The company published an updated mineral resource estimate for the Crown Prince deposit of 1.8 Mt at 4.1 g/t gold for 240 koz (68 percent indicated category), which includes a maiden resource for the Southeastern Zone (SEZ) of 1 Mt at 5.2 g/t gold for 164 koz (discovered in late 2022).
The resource is shallow, delineated from surface, remains open at depth and along strike, and located within a 300 m x 200 m area demonstrating strong open pit mining potential. There is significant resource growth potential at new mineralised zones at the north eastern end of SEZ and Crown Prince East (350 m from SEZ).
Ora Gold also published strong metallurgical performance from advanced test work at Crown Prince with high recovery of gold through gravity and cyanide leach test work, reporting overall gold recovery rates ranging from 98.2 to 99.8 percent.
Recent high-grade gold intersections at SEZ
Westgold Strategic Alliance
Ora Gold announced a strategic alliance and $6 million placement with Australian gold producer Westgold Resources.
The Westgold transaction provides a clear pathway to commercialising Crown Prince in a strong gold price environment, validates the quality of the deposit and enables Ora Gold to leverage Westgold’s internal resources, intellectual property and infrastructure to accelerate development.
The primary aim of the strategic alliance is to fast track the development of Ora Gold’s Crown Prince deposit into production. As part of the strategic alliance, Ora Gold and Westgold will use their best endeavours to agree on the terms of a proposed ore purchase agreement (OPA). Crown Prince is located only 33 km from Westgold’s 1.6 – 1.8 Mtpa Bluebird Mill. A key term of the OPA will include Ora Gold granting Westgold a right of first refusal to the future purchase of all ore produced from tenements owned by Ora to be processed at Bluebird.
In addition to the OPA, the strategic alliance may also encompass other strategic collaboration initiatives such as access to Westgold’s expertise and infrastructure. Upon completion of the strategic placement, Westgold will be an 18.7-percent shareholder (undiluted basis) and have the right, but not the obligation to an Ora Gold board seat and an equity participation right.
Proceeds from the strategic placement and current cash will allow Ora Gold to fast track further resource development, project development and mining proposal workstreams at Crown Prince and continue systematic regional exploration across Ora’s commanding 677 sq km tenure.
Major players are increasingly partnering with junior explorers to secure access to high-grade, quality gold resources. Ora Gold's collaboration with Westgold epitomises this movement, setting a blueprint for mutual success in the industry.
Key Focus
The near-term focus for Ora Gold will be further resource growth and rapidly advancing project development and mining proposal workstreams at Crown Prince:
- Crown Prince Drilling: Further delineating new high-grade mineralised zones at the north-eastern end of SEZ and Crown Prince East (350 metres from SEZ) and resource definition drilling along strike and below 100 metre vertical depth
- Crown Prince Resource: Updated Mineral Resource Estimate expected in September of 2024.
- Crown Prince Development: progress detailed technical programs, preliminary project development and mining proposal workstreams and agree on an ore purchase agreement and other strategic collaboration initiatives with Westgold
- Regional: Continue systematic regional exploration programs across Ora’s commanding 677 sq km tenure package
Management Team
Ora Gold is led by a team of experienced professionals with a diverse set of skills and expertise. At the helm of the company's operations is CEO Alex Passmore, a qualified geologist with extensive corporate finance experience to guide Ora Gold's strategic plan. The board is chaired by Rick Crabb, with extensive experience in the legal and mining sectors providing invaluable governance and oversight.
Supporting the company's governance structure, Malcolm Randall serves as a non-executive director, bringing a wealth of knowledge from his tenure in the resource sector, including 25 years at Rio Tinto. Frank DeMarte, director and company secretary, contributes over 39 years of mining industry experience in areas of financial management governance and secretarial practice.
The collective experience of Ora Gold's board and management is a cornerstone of the company's success, positioning it to capitalise on the opportunities within the Garden Gully project and beyond.
For further information on Ora Gold's strategic initiatives and investment opportunities, sign up for a free investor kit.
Recommended Takeover of Mako Gold By Aurum Resources: Bid Implementation Agreement
Aurum Resources Limited (ASX: AUE) (“Aurum”) and Mako Gold Limited (ASX: MKG) (“Mako”) refer to today's announcement "Recommended Takeover of Mako Gold by Aurum Resources" and enclose a copy of bid recommendation agreement.
This joint announcement was authorised for release to the ASX by the Board of Directors of each of Aurum Resources and Mako Gold Limited.
Click here for the full ASX Release
This article includes content from Aurum Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
New Gold Vein System Discovery at Grenadier Prospect, Golden Ridge, NE Tasmania
Flynn Gold Limited (ASX: FG1, “Flynn” or “the Company”) is pleased to announce the discovery of significant gold mineralised quartz veining at the new Grenadier Prospect at the Company’s flagship Golden Ridge Project, located in north-east Tasmania (see Figure 1).
- New in-situ gold vein system discovered during recent surface sampling and trenching programs at the Grenadier Prospect, within the Golden Ridge Project in NE Tasmania
- The gold vein system was discovered by Flynn’s exploration team following up gold-in-soil anomalies with 29 surface float and in-situ rock chip samples returning assay grades including 16.0g/t Au, 13.2g/t Au, 12.0g/t Au and 10.2g/t Au
- Assays from channel sampling of three initial trenches has confirmed in- situ quartz-sulphide veining, with significant mineralised intercepts including:
- 1.3m @ 6.6g/t Au, including 0.4m @ 17.7g/t Au (Trench 3)
- 1.0m @ 2.2g/t Au (Trench 2)
- 6.4m @ 1.3g/t Au, including 2.0m @ 3.0g/t Au (Trench 1)
- Trenching has exposed the vein hosted mineralisation over a 50 metres strike length (open) with follow-up trenching underway testing for strike extensions and parallel vein zones
- Significantly, there is no evidence of historical workings in the area
- These latest results continue to emphasise the increasing scale of the intrusive-related gold system at Golden Ridge, which has been delineated over a total length exceeding 9km
- For further information or to post questions to management, go to the Flynn Gold Investor Hub at:https://investorhub.flynngold.com.au/link/oPBqVr
Managing Director and CEO Neil Marston, commenting on the results, said:
“We are very pleased to report the discovery of gold mineralisation in quartz veins in trenches at our Grenadier prospect, which forms part of our Golden Ridge Project in north-east Tasmania.
“The trenches were excavated to test gold-in-soil anomalies delineated as part of our on-going regional soil sampling campaign. The gold mineralisation at Grenadier is coincident with the granodiorite-metasediment contact zone, which is the same contact that hosts the extensive Brilliant and Trafalgar vein systems located along strike to the east.
“These results continue to demonstrate the increasing scale of the intrusive-related gold system at Golden Ridge, as well as highlighting the effectiveness of soil sampling as a first- pass exploration tool for identifying gold mineralisation in this environment.
“Soil sampling coverage of the Golden Ridge Granodiorite and its contact zones is continuing to expand. Our aim is to generate further gold anomalies to target with follow-up trenching, sampling and drilling as we continue to define the broader extents of this large, high-grade gold system.”
Click here for the full ASX Release
This article includes content from Flynn Gold, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Recommended Takeover of Mako Gold by Aurum Resources
Aurum Resources Limited (ASX: AUE) (“Aurum”) and Mako Gold Limited (ASX: MKG) (“Mako”) are pleased to announce that they have reached an agreement to merge to create a well-funded, stand-out emerging exploration and development gold business in West Africa.
- Mako Gold Limited (ASX:MKG) and Aurum Resources Limited (ASX:AUE) have entered into a Bid Implementation Agreement (BIA), for an agreed merger pursuant to which Aurum proposes to acquire 100% of the issued shares in Mako and 100% of two classes of unlisted options by way of an off-market takeover bid (Proposed Merger)
- Proposed Merger will create an emerging exploration and development gold business in West Africa, with cash of over A$20 million1 to advance the flagship Napié and Boundiali Projects in northern Côte d'Ivoire
- Aurum to offer:
- 1 Aurum share for every 25.1 Mako shares, representing an offer price of $0.018 per Mako share2 (Share Offer)
- 1 Aurum share for every 170 Class A Options3
- 1 Aurum share for every 248 Class B Options4 (together, the Option Offers)
- Offer represents a 112% premium for Mako shareholders based on the 30-day VWAP of A$0.008555
- Mako shareholders will own 20.5% of the merged entity under the Share Offer while Aurum shareholders will own the remaining 79.5%6
- Mako Directors unanimously recommend that, in the absence of a superior proposal, all shareholders and option holders accept Aurum’s offers7
- The combined group will be pursuing its growth strategy from a position of greater market scale, underpinned by a strong cash balance of $20 million8 and lower consolidated cost base
- Aurum has 6 company-owned drill rigs operating at its Boundiali Project and has ordered two new diamond drill rigs to deploy following completion of the Proposed Merger
Recommended Takeover Offer for Mako
The companies have executed a Bid Implementation Agreement (the “BIA”) to effect the merger by way of off-market takeover bids (the “Offers”) under which Aurum will bid for 100% of the shares and 100% of the Class A Options and Class B Options in Mako (“Proposed Merger”).9
The Proposed Merger will allow both Aurum and Mako securityholders to benefit from the combination of Aurum’s strong balance sheet and exceptional drilling efficiencies, with A$20 million in cash to deploy into rapid work programs targeted at further resource definition across Aurum and Mako’s assets in northern Côte d'Ivoire.
The merged company will be driven by a highly experienced Board and Management team with extensive gold experience from grass roots discovery, through to resource drill-out, feasibility studies, project finance and production.
Commenting on the proposed merger, Aurum Managing Director Dr Caigen Wang said:
“The Aurum team is excited to apply our skills to the Napié Project, which we consider has great potential to quickly evolve into a multi-million ounce project with a dedicated owner-operated multi-rig drilling programme which can be delivered at a cost significantly below standard contract rates.”
“We see strong similarities between Napié and the Abujar Project where the Aurum executive team, when running Tietto Minerals Ltd, were able to rapidly grow resources to 3.8Moz, and propel Abujar into production before being acquired in mid-2024 for over A$768 million.”
“We look forward to collaborating with the strong Mako technical team to marry their exploration skills with our exploration and cost efficiencies to drive benefits for all of our shareholders. Between driving growth at Napié and being well on the path to delivery of a maiden resource at our own Boundiali Project later this year, we see strong potential for Aurum to become a strong emerging gold developer in Côte d’Ivoire with two assets with long-life potential in close proximity to each other.”
Commenting on the proposed merger, Mako Managing Director Peter Ledwidge said:
“We are pleased to agree this deal with the highly capable team at Aurum. The Aurum executive team have a demonstrable track record of being able to rapidly and very cost effectively drill-out resources using their owner-operator model.”
“We have always believed our Napié Project has potential to host multi-million ounces of gold, and pleasingly, due to relative sizes of Mako and Aurum, upon close of the Proposed Merger, Mako securityholders will remain a meaningful part of the expanded group, and therefore will share in the continued upside to the growth in Napié, as well as gain exposure to the rapidly evolving Boundiali Project where Aurum expects to deliver its maiden resource in late 2024.”
“We recommend all securityholders embrace this merger as a catalyst to unlock value from Napie.”Click here for the full ASX Release
This article includes content from Aurum Resources, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here.
Trump vs. Harris: How Could the US Election Affect the Gold Price?
With the election between Vice President Kamala Harris and former President Donald Trump less than three weeks away, polling is showing the candidates in a virtual dead heat.
In the resource sector, investors are wondering how the presidential race may affect the gold price. While diverse factors drive the gold price, the US — and by extension its leader — impacts many of them, including the global geopolitical environment, interest rates and the performance of the US dollar.
In 2020, Biden and Harris presented themselves as a team who would bring Republicans and Democrats together, challenging Trump’s divisive and populist rhetoric of making America great again. Although Trump ultimately lost that election, his popularity remained steadfast among his base.
During their terms, both the Trump/Pence and the Biden/Harris administrations have increased domestic oil production and increased tariffs on goods from overseas.
In the only debate planned between Harris and Trump, which took place on September 10, 2024, Harris focused on her platform’s key economic policies, including increased support for first-time home buyers, families and small businesses. She was also committed to investing in diverse forms of energy, including renewables and oil and gas, to reduce dependence on foreign oil.
Meanwhile, Trump maintained a focus on the key issues of his base including policing and immigration, but also discussed his economic plan that would see him increase tariffs on goods from China.
When it came to the conflict between Russia and Ukraine, Harris pledged her support for both Ukraine and other US allies in Europe. While Trump did not say he supported Ukraine, he said he was also committed to ending the war, and planned to push Ukrainian funding to European partners while attempting to bring Russian President Vladimir Putin and Ukrainian President Volodymyr Zelenskyy to the negotiating table.
The gold price has climbed significantly under both administrations. It's been holding at historic levels above the US$2,600 mark, reaching an all-time high of US$2,672.51 on September 18, more than double its price when Trump took office in 2017.
Some of the recent rise in gold prices is attributed to a 50-point cut to interest rates following the Federal Open Markets Committee meeting on September 17 and 18. It is the last time the committee will come together before the November 5 election, as the next FOMC meeting is scheduled for November 6 and 7.
How does gold typically perform post-election, and how has it moved during Trump and Biden's presidencies? While the past doesn't necessarily dictate the future, reviewing gold price trends can help investors plan their election strategy.
In this article:
How do US elections affect the gold price?
Looking at past US elections can provide insight on how the gold price may move in the days and weeks following November 5. However, on a broad scale, changes post-election tend to normalize fairly quickly.
In an email to the Investing News Network, Lobo Tiggre, CEO of IndependentSpeculator.com, said he doesn’t see either candidate having a large effect on the price of gold post-election. “The outcome of the election will have ideological consequences, but it’ll make no difference to gold, silver, uranium or the commodities super-cycle,” he said.
In 2016, when Trump ran against Hillary Clinton, the gold price climbed by about US$50 in the weeks leading up to the November 8 election, peaking at just above US$1,300 per ounce on November 4. Following Trump's win gold fell substantially, moving as low as US$1,128 in mid-December. Following that low point, the gold price began to rebound, and by the middle of January 2017 was once again above the US$1,200 level.
Gold price, November 1, 2016, to January 30, 2017.
Chart via Trading Economics.
The 2020 election was on November 3, and in the week leading up to the vote gold was trading at around US$1,900, although it fell as low as US$1,867 on October 30. After the election, the gold price performed positively, spiking from US$1,908 on the day of the vote to US$1,951 on November 6.
However, gold fell back down over the following weeks, and dipped briefly below US$1,800 as vote recounts in Georgia and several districts and legal challenges by Trump’s team dragged on.
Gold price, November 1, 2020, to January 30, 2021.
Chart via Trading Economics.
Gold began to climb again in December ahead of January 6, 2021, when the electoral college met to formalize Biden’s victory. That day, the attack on the US Capitol building, which aimed to stop this process, caused the gold price to plunge from US$1,949 on January 5 to US$1,848 by January 8. The events of January 6 were the start of a decline in the gold price that continued until March 8, when gold bottomed out at US$1,674.80.
Gold's behavior at this time went against the usual trend whereby it performs well amid crisis and turmoil; the decline may been a reaction to the successful affirmation of Biden. Stock markets also reacted opposite to expectations, seeing strong gains on January 6 and 7 as investors and Wall Street believed an economic recovery was in sight.
How did the gold price perform when Trump was president?
The gold price rose substantially during Trump's presidency, increasing from US$1,209 when he assumed office on January 20, 2017, to US$1,839 on his final day, which was January 19, 2021.
While these gains can't be directly attributed to Trump, his actions helped shape the geopolitical landscape both in the US and abroad. During his tenure, trade wars with both allies and competitors were in focus.
China was a key target for Trump. While tariffs on Chinese goods were already in place, his administration applied new restrictions to more items, including steel, electric vehicle batteries and consumer goods. Also under Trump's watch, relations with India fractured and the country lost its preferential trade status with the US. He also withdrew from the Iran nuclear treaty and imposed punishments on anyone who traded with Iran.
These and other “America First” protectionist policies and sanctions implemented by the Trump administration tarnished the image of the US as a reliable trade partner, helping to push the BRICS nations — Brazil, Russia, India, China and South Africa — away from the US dollar as a global reserve currency.
The BRICS have since expanded to include Iran, Egypt, Ethiopia and other emerging nations, and have increasingly turned toward gold. China and India in particular have increased purchases of gold through their central banks, leading some to speculate that they are attempting to create a new currency that is at least partially backed by gold.
One other factor that drove the gold price during Trump’s term was the outbreak of the COVID-19 pandemic and government policies put in place to support citizens and the economy. For example, the former president oversaw multiple stimulus efforts, including packages announced in March 2020 and December 2020. These actions led many to turn to gold as a safe haven out of concern for a weakening US dollar.
A second Trump term would likely bring more of the same protectionist policies. Indeed, his 2024 campaign has similarities to his 2016 and 2020 campaigns. He has reused his “America First'' rhetoric and promised a fresh round of tariffs if elected. Singling out China, Trump has said he would look to implement a 60 percent tariff on all goods imported into the US, a move that would likely increase tensions and the likelihood of a widening division between the countries.
How has the gold price performed with Biden and Harris in office?
Gold has also seen sizable gains during Biden's presidency. The price of gold was US$1,871 when he took over from Trump on January 20, 2021. And while Biden's term as president is not over until January 2025, as of October 15, the gold price was trading at about US$2,665. It reached a new record on September 25 of US$2,672.51.
Again, it's hard to say how many of the Biden administration's policies directly influenced these gains. Geopolitical conflict and black swan events outside of his control all affected the gold market during this time.
For example, Biden and Harris entered office one year after the start of the COVID-19 pandemic. Inflation was ballooning, which typically leads to higher gold prices. The US Federal Reserve has worked to counteract inflation and strengthen the US dollar by raising interest rates beginning in 2022, a move that tempered the gold price for a time. The anticipation of rate cuts and the 50 point cut that came in September were factors in driving gold to its record highs in recent months.
Biden came into office on a promise of restoring the US' place in the global community, and while his administration did close rifts among important trading partners like Canada and the EU, tensions with China remain. This rift is a holdover from the Trump administration's more isolationist policies, but has also been representative of a more competitive global trade landscape as the BRICS nations seek to move away from the US dollar and America’s influence on world economics.
Biden has attempted to at least partially mend the US' relationship with China, including by meeting with President Xi Jinping in the summer of 2023. However, a key sticking point in negotiations between the two has been Biden’s continued stance that the US would support Taiwan if China were to invade it; at the same time, he has said that the US does not support Taiwan’s independence. Both of these stances are in line with the US’ longtime position on the matter, but escalating tensions between China and Taiwan have brought this to the forefront.
Harris is unlikely to shift policy when it comes to Taiwan. In a September 2022 meeting with South Korean President Yoon Suk Yeol, she said the US was committed to opposing unilateral actions by China and would maintain the status quo in the South China Sea. The White House added that peace and stability across the Taiwan Strait was essential to a free Indo-Pacific region.
Harris discussed trade routes in the region again when she attended the ASEAN summit in Jakarta, Indonesia, in September of 2023. She told CBS’s Margaret Brennan that it's not about pulling out of Southeast Asia, but about de-risking the region and ensuring that American interests were protected.
On an economic level, the Biden administration has distanced itself from China with policies such as the Inflation Reduction Act and Chips Act, which support the development of western supply chains for a variety of industries, including clean energy, electric vehicles and semiconductor chips, in part by introducing subsidies for companies that don’t rely on China for their supply chain.
Meanwhile, China has accelerated its de-dollarization efforts, dumping roughly US$50 billion worth of US Treasuries and agency bonds during the first quarter of this year.
Additionally, Biden’s role in implementing a strict set of sanctions against Russia following its invasion of Ukraine in February 2022 deepened a divide between the US and Russia, as well as the other BRICS nations.
Among other sanctions, the US limited Russia's access to SWIFT, a communications network that helps facilitate the global movement of funds. The US Department of the Treasury also implemented controls that effectively cut off Russia’s central bank and key funds and personnel from accessing the US financial system. Some analysts believe the move may work to undermine the US dollar as the global reserve currency in the long term, as it sent a signal to the rest of the world that the US is willing to effectively weaponize the US dollar.
What will happen to gold after the election?
Though this year's presidential election may have a limited effect on the price of gold, a rate decision by the Fed could impact the metal's price in the days that follow the election. Decisions made by the US central bank, which is not controlled by the president, have a strong impact on the US dollar and thus often impact the gold price as well.
The Federal Open Market Committee, which is the board that ultimately decides whether to increase or decrease interest rates, is set to meet from November 6 to 7, just one day after the November 5 election.
Gold tends to rise when rates are lower and fall when they are high, but this year gold has reached all-time highs in the face of elevated rates. While strong expectations for cuts at the beginning of 2024 didn’t pan out, gold prices grew in the lead up to the September meeting of the committee, when the first cut finally came.
So what will happen to gold after the election? A post-election interest rate cut could boost gold, but it's not yet clear how the November meeting will play out.
Investor takeaway
Historically speaking, returns for gold under Democrat and Republican presidents have averaged 11.2 percent and 10.2 percent, respectively. But that might not be the data point investors should focus on.
Which party controls Congress, which is comprised of the House and Senate, has had a far stronger influence on the gold price. Under Democrat-controlled Congresses, gold has averaged a 20.9 percent gain, compared to just 3.9 percent when Congress is controlled by Republicans. In cases where neither controls Congress, gold has averaged 3.5 percent.
With that in mind, investors should consider the effects of policies enacted not only by the executive branch of the US government, but also by Congress and the Senate. Those hoping to use the immediate aftermath of the election outcome to their advantage should also proceed with caution — when it comes to gold, past elections haven't provided great investment opportunities, with losses and gains typically being short-lived.
This is an updated version of an article first published by the Investing News Network in 2020.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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NexGold and Signal to Merge, Creating Near-term Canadian Gold Producer
NexGold Mining (TSXV:NEXG,OTCQX:NXGCF) and Signal Gold (TSX:SGNL,OTCQB:SGNLF) announced plans to merge on October 10 with the aim of creating a near-term gold producer with assets in Canada.
The transaction will create a combined entity focused on advancing two gold projects in the country: NexGold’s Goliath gold complex in Northern Ontario and Signal’s Goldboro project in Nova Scotia.
The deal will bring together approximately 4.7 million gold ounces in the measured and indicated categories, plus an additional 1.3 million gold ounces categorized as inferred resources.
The companies' goal is to ultimately produce over 200,000 ounces of gold per year.
“With the Transaction, we have significantly de-risked the combined company as it will no longer be a single asset company but rather a company with a pipeline of low-cost, low risk, high return mine development and expansion projects in Canada," said Morgan Lekstrom, president of NexGold, in last week's press release.
“Not only do we have a path to construction on both Projects when project financing is obtained, but both historic gold districts have demonstrated tremendous expandability and upside potential that could contribute to larger, longer-life Projects," he continued, adding that the companies see the combination as transformative.
Under the terms of the merger, NexGold will acquire Signal in an all-share transaction. Each Signal share will be exchanged for 0.1244 shares of NexGold, which will mean that existing NexGold shareholders will own approximately 71 percent of the new company, while Signal shareholders will hold the remaining 29 percent.
To support the merger, both companies will conduct concurrent non-brokered private placements aiming to raise total gross proceeds of up to C$11.5 million. NexGold will raise C$5 million, while Signal will raise C$6.5 million.
Once combined, the new entity will focus on growth at the Goliath and Goldboro properties through exploration drilling, while assessing additional opportunities for corporate growth.
A February 2023 prefeasibility study for NexGold's Goliath project outlines a nine year mine life with average annual production of approximately 109,000 ounces. It is being remediated as an open-pit and underground mine.
Meanwhile, Signal's Goldboro project, which is projected to be an open-pit mine, has an ancipated 11 year life with estimated annual output of around 100,000 ounces.
The merger comes at a time of gold price strength, with the yellow metal hitting record levels this year.
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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
Fatal Incidents Claim Lives of Two Miners in Separate Events
Two separate mining incidents this past week have resulted in fatalities, casting a spotlight on safety practices.
Resource companies G Mining Ventures (TSX:GMIN,OTC Pink:GMINF) and Griffin Mining (LSE:GFM) reported the deaths of workers at their respective sites, both caused by work-related accidents.
The most recent fatality occurred on October 13 at G Mining’s Oko West gold project in Guyana, where a road accident claimed the life of a contractor employed by Hopkinson Mining Security Services, a partner of G Mining.
In a statement, the company expressed its condolences to the family and colleagues of the deceased, and reiterated its commitment to ensuring worker safety across its operations.
Operations at Oko West were unaffected by the incident, as it occurred in an isolated area of the site.
Days earlier, on October 11, Griffin Mining reported the death of a contractor at its Caijiaying zinc-gold-silver-lead mine in China. The worker was trapped when excavated material from an ore pass buried the loader he was operating. Despite being swiftly taken to a nearby hospital, the contractor was pronounced dead upon arrival.
Operations at Caijiaying have been suspended to allow for a comprehensive investigation into the accident.
Mladen Ninkov, chairman at Griffin, addressed the tragedy in a press release, acknowledging the impact on the company’s workforce and the importance of maintaining rigorous safety standards.
“A death in any family or organization is inevitably a tragedy for the family involved and the numerous people, organizations and entities whose life that person would have interacted with on a regular basis,” he said. “It strengthens our continuing resolve to redouble our efforts to ensure safety is our first, second and last priority."
Both companies have committed to cooperating fully with authorities, and to taking all necessary steps to prevent future tragedies. While global efforts are being made to strengthen occupational safety in the workplace, the incidents serve as reminders of the inherent dangers in mining and the ongoing need for improved safety protocols.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
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