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Quarterly Report For The Period Ended 31 December 2022
January 30, 2023
Challenger Exploration (ASX: CEL) (“CEL” the “Company”) is pleased to provide its Quarterly Activities Report for the period ended 31 December 2022 (“Quarterly”, “Reporting Period”).
Highlights
- Hualilan Gold Project - San Juan, Argentina
- Drilling post CEL's Maiden Mineral Resource Estimate (MRE) of 2.1 million ounces (AuEq)1 continues to significantly expand the mineralisation with results Including (Table 4);
- 50.0m at 3.4 g/t AuEq1 - 2.4 g/t Au, 16.8g/t Ag, 1.8% Zn from 441.0m including,
40.0m at 4.2 g/t AuEq1 - 2.9 g/t Au, 20.9 g/t Ag, 2.2% Zn from 441.0m including,
22.5m at 7.0 g/t AuEq1 - 4.8 g/t Au, 33.5 g/t Ag, 3.8% Zn from 456.5m (GNDD-316 ext) - 65.3m at 2.4 g/t AuEq1 - 2.3 g/t Au, 1.7 g/t Ag, 0.2% Zn from 209.0m and
12.2m at 11.0 g/t AuEq1 - 10.1 g/t Au, 11.7 g/t Ag, 1.5% Zn from 324.9m(GNDD-684) - 16.5m at 5.9 g/t AuEq1 - 4.1 g/t Au, 18.9 g/t Ag, 3.4% Zn from 53.0 including,
10.5m at 9.3 g/t AuEq1 - 6.5 g/t Au, 29.6 g/t Ag, 5.3% Zn from 59.1m (GNDD-670), - 94.0m at 0.7 g/t AuEq1 - 0.6 g/t Au, 1.2 g/t Ag, 0.1% Zn from 17.0m including
2.0m at 8.8 g/t AuEq1 - 8.8 g/t Au, 0.2 g/t Ag, 0.1% Zn from 109.0m and
45.0m at 0.7 g/t AuEq1 - 0.5 g/t Au, 6.3 g/t Ag, 0.2% Zn from 314.0m (GNDD-661);
- 50.0m at 3.4 g/t AuEq1 - 2.4 g/t Au, 16.8g/t Ag, 1.8% Zn from 441.0m including,
- Additional 50,000 metre drill program (to take total metres at Hualilan to 250,000 metres) more that 50% complete (assays pending)
- Work on an updated MRE based on approximately 200,000 metres of assays underway with a March completion date to be followed by a third update, based on 250,000 metres, in H2 23.
- Scoping Study commenced with Mining Plus appointed as managers for the Study.
- Drilling post CEL's Maiden Mineral Resource Estimate (MRE) of 2.1 million ounces (AuEq)1 continues to significantly expand the mineralisation with results Including (Table 4);
- El Guayabo/Colorado V Gold/Copper Projects - El Oro, Ecuador
- 11 hole exploration program targeting the next 8 regionally significant Au-soil anomalies in Ecuador completed with all holes intersecting mineralisation and discoveries on 4 of the 8 anomalies. Outstanding results from first Phase 2 drill holes on the GY-B anomaly (Table 5):
- 778.2 m at 0.3 g/t AuEq2- 0.2 g/t Au, 0.6 g/t Ag, 0.01% Cu, 0.8 ppm Mo from 77.3m including;
171.3m at 0.5 g/t AuEq2 - 0.5 g/t Au, 0.9 g/t Ag, 0.01% Cu, 2.1 ppm Mo from 328.1m including;
98.4m at 0.7 g/t AuEq2 - 0.6 g/t Au, 0.6 g/t Ag, 0.01% Cu, 2.3 ppm Mo from 328.1m and
150.8m at 0.5 g/t AuEq2 - 0.4 g/t Au, 0.6 g/t Ag, 0.02% Cu, 3.1 ppm Mo from 688.2m including;
42.5m at 1.4 g/t AuEq2 - 1.3 g/t Au, 1.2 g/t Ag, 0.1% Cu, 2.4 ppm Mo (GYDD-22-019)
(First hole CP-A Anomaly - new gold discovery) - 638.2m at 0.6 g/t AuEq2 - 0.3 g/t Au, 2.1 g/t Ag, 0.1 % Cu, 10.5 ppm Mo from 10.1m including;
304.3m at 1.0 g/t AuEq2 - 0.5 g/t Au, 3.4 g/t Ag, 0.3 % Cu, 14.5 ppm Mo from 344.0m including;
108.5m at 2.4 g/t AuEq2 - 1.3 g/t Au, 7.8 g/t Ag, 0.6% Cu, 20.0 ppm Mo from 344.0m including;
54.2 m at 4.0 g/t AuEq2-2.2 g/t Au, 12.9 g/t Ag, 1.0% Cu, 24.7 ppm Mo (GYDD-22-024)
(GY-B Phase 2 drilling - hole ending in mineralisation)
CORPORATE
The exploration expenditure for the quarter was $7.7 million including approximately $0.9m Argentinian VAT which will be recouped. Exploration spend was primarily drilling and assay expenditure which accounted for 70% of the total exploration spend and Scoping Study activities of
$150k.
A total of 11,745 metres were drilled during the December Quarter in Hualilan with 3-rigs utilised full time and rig production ahead of budgeted metres. With the drill out for the Hualilan Mineral Resource Update now completed the rig count has been reduced to 2-rigs with a second rig programmed to depart at the end of the quarter. Budgeted drill metres during the current quarter are approximately 7,500 metres, a 40% reduction.
Total drill metres during the quarter in Ecuador were 7,041 metres. Approximately 4,500 metres remain in the program designed to produce a maiden Mineral resource estimate, in accordance with the JORC Code, over the GY-A and GY-B anomalies. Consequently, the company will move from 2-rigs to 1-rig during February with this program expected to be completed around the end of the quarter.
In line with the current drill programs at both projects nearing completion, budgeted exploration spend is forecast to reduce significantly in the current quarter and again into the June quarter.
Net spend during the quarter was $9.1million which included the exploration spend of $7.7 million and Administration and Corporate costs of $1.2M including approximately $0.9m Argentinian VAT which will be recouped. The $1.2M administration and corporate costs included Interest associated with the Convertible Debenture with QRC of $400k. The balance was related to administration and other corporate costs. Amounts payable for staff costs of ($113k) and exploration staff costs ($91K) were to related parties and their associates. Cash at bank at the end of the quarter was $15.4 million.
Click here for the full ASX Release
This article includes content from Challenger Exploration, 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.
CEL:AU
13 December
Top 5 Canadian Mining Stocks This Week: O3 Mining Up 60 Percent on Agnico Eagle Takeover Deal
Welcome to the Investing News Network's weekly look at the best-performing Canadian mining stocks on the TSX, TSXV and CSE, starting with a round-up of Canadian and US news impacting the resource sector.
The S&P/TSX Venture Composite Index (INDEXTSI:JX) fell 1.12 percent on the week to close at 607.84 on Friday (December 13). Meanwhile, the S&P/TSX Composite Index (INDEXTSI:OSPTX) posted a 1.71 percent decrease to hit 25,274.3, and the CSE Composite Index (CSE:CSECOMP) sank 2.68 percent to reach 131.45.
The US Bureau of Labor Statistics released November consumer price index (CPI) data on Wednesday (December 11).
The report shows the all-items index increased by 0.3 percent monthly, compared to the 0.2 percent recorded in each of the previous four months. Core CPI was also up 0.3 percent, steady compared to the previous three months.
On an annualized basis, CPI increased by 2.7 percent, up from the 2.6 percent rise recorded in October. Core CPI, which excludes food and energy, was unchanged from October, increasing 3.3 percent.
Overall, the increase in the CPI shows some stickiness in inflation, but most analysts think the US Federal Reserve will cut interest rates by 25 points when it meets on December 17 and 18, before pausing in the new year.
In the commodities space, gold passed US$2,700 per ounce midweek, but finished the period virtually unchanged at US$2,648.34; silver sank 1.43 percent to US$30.54 per ounce. Copper lost just 0.23 percent for the week at US$4.20 per pound on the COMEX. More broadly, the S&P GSCI (INDEXSP:SPGSCI) was up 2.83 percent to close at 546.29.
Equity markets were mixed this week. The S&P 500 (INDEXSP:INX) fell 0.52 percent to end Friday at 6,051.08, while the Nasdaq-100 (INDEXNASDAQ:NDX) gained 0.96 percent to come in at 21,780.25. Meanwhile, the Dow Jones Industrial Average (INDEXDJX:.DJI) finished the week down 1.81 percent at 43,828.07.
Find out how the five best-performing Canadian mining stocks performed against that backdrop.
Data for this article was retrieved at 4:00 p.m. EST on December 13, 2024, using TradingView's stock screener. Only companies trading on the TSX, TSXV and CSE with market capitalizations greater than C$10 million are included. Companies within the non-energy minerals and energy minerals sectors were considered.
1. Orosur Mining (TSXV:OMI)
Weekly gain: 88.89 percent
Market cap: C$28.27 million
Share price: C$0.16
Orosur Mining is an explorer focused on the development of early to advanced-stage assets in South America.
Its flagship Anzá gold project in Colombia was previously a 49/51 joint venture with Minera Monte Aguila (MMA), a corporation owned equally by Newmont (TSX:NGT,NYSE:NEM) and Agnico Eagle Mines (TSX:AEM,NYSE:AEM).
Exploration has revealed multiple gold deposits at the site, which is located 50 kilometers west of Medellin, and according to Orosur sits along Colombia’s primary gold belt.
Orosur also owns several early stage projects: the El Pantano gold-silver project in Argentina, the Lithium West project in Nigeria and the Ariquemes project in Brazil, which is prospective for tin, niobium and rare earths.
Shares of Orosur jumped significantly following a November 28 announcement that it has completed its takeover of MMA. The acquisition gives Orosur 100 percent indirect ownership of the Anzá gold project.
Under the terms of the agreement, Newmont and Agnico will each receive a 0.75 percent net smelter royalty, plus a fixed royalty of US$37.5 per ounce of gold or gold equivalent on the first 200,000 ounces produced.
Since the transaction's completion, exploration has resumed at the Pepas prospect to test high-grade results from a 2022 drill program. On Friday, Orosur announced the delivery of initial assays, saying they confirm the previous results. The samples encountered grades of 5.58 grams per metric ton (g/t) gold over 75.1 meters from the surface, including an intersection of 13.68 g/t over 13.95 meters.
2. NOA Lithium Brines (TSXV:NOAL)
Weekly gain: 80.65 percent
Market cap: C$34.59 million
Share price: C$0.28
NOA Lithium Brines is advancing three projects in the lithium triangle area of Argentina's Salta province: the 37,000 hectare Rio Grande project, the 78,000 hectare Arizaro project and the 10,200 hectare Salinas Grandes project.
Of the three projects, Rio Grande is the most advanced. The company updated the resource estimate for the site in July, noting that measured and indicated resources had increased to 2,658,000 metric tons of lithium carbonate equivalent, with 2,039,000 metric tons of lithium carbonate equivalent in the inferred category.
Shares of NOA gained this week after the company said on Tuesday (December 10) that it has closed a C$13.5 million private placement with Clean Elements, a private holding company established to develop lithium assets. If Clean Elements exercises all warrants, it will receive 39.9 percent of outstanding common shares on a fully diluted basis.
NOA plans to use the proceeds of the offering to pay off debts and fund exploration work at Rio Grande.
3. O3 Mining (TSXV:OIII)
Weekly gain: 60.19 percent
Market cap: C$179.47 million
Share price: C$1.65
O3 Mining is a gold explorer and developer working to advance its assets in Québec, Canada.
The company’s Marban Alliance gold project is composed of 65 mining claims covering 2,189 hectares in Western Québec. Exploration at the site dates back to the 1940s and has seen drilling to a depth of 1,475 meters.
A prefeasibility study from 2022 outlines a pre-tax net present value of C$775 million for the asset with an internal rate of return of 30.2 percent and a payback period of 3.5 years.
O3 also owns the Horizon project, made up of 192 claims over 8,778 hectares directly to the northwest of Marban.
Shares of O3 jumped this week following news on Thursday (December 12) of a friendly takeover offer by major miner Agnico Eagle Mines. The offer, valued at C$204 million, will see Agnico Eagle purchase all outstanding common shares in O3 at C$1.67 each, a 58 percent premium to the closing price on December 11.
The news was followed on the same day by a joint announcement that O3’s largest shareholder, Gold Fields (NYSE:GFI), will support the transaction through a lock-up agreement with Agnico to tender its common shares in O3. Gold Fields owns approximately a 17 percent stake in O3.
4. KWG Resources (CSE:CACR)
Weekly gain: 50 percent
Market cap: C$19.19 million
Share price: C$0.015
KWG Resources is a chromite and base metals exploration company focused on moving forward at its Ring of Fire assets in Northern Ontario, Canada. It does business as the Canadian Chrome Company.
The firm's properties consist of the Fancamp and Big Daddy claims, along with the Mcfaulds Lake, Koper Lake and Fishtrap Lake projects. All are located within a 40 kilometer radius, and according to the company are home to feeder magma chambers containing chromite, nickel and copper deposits.
KWG is currently working with local First Nations to improve transportation to the region through the development of road and rail links. The company announced on November 7 that it had signed a memorandum of agreement with AtkinsRealis Canada in its capacity as a contractor representing the Marten Falls and Webequie First Nations.
The agreement will allow AtkinsRealis temporary access rights over some mineral exploration claims in support of work permits for an environmental assessment for the design, construction and operation of a multi-use, all-season road between the proposed Marten Falls community access road and the proposed Webequie supply road.
Once completed, the link will provide improved access to communities and mining companies in the region.
KWG did not release any news in the past week.
5. Vior (TSXV:VIO)
Weekly gain: 47.06 percent
Market cap: C$48.91 million
Share price: C$0.25
Vior is a gold exploration company with a portfolio of assets located in Québec, Canada.
The company’s main focus has been advancing its flagship Belleterre project in Southwestern Québec. The property consists of 635 claims covering an area of 350 square kilometres, and hosts the past-producing Belleterre gold mine, which produced 750,000 ounces of gold and 95,000 ounces of silver between 1936 and 1959.
Vior says that the mineralization trend at the property extends for 6 kilometers, and in addition to gold and silver has demonstrated the presence of copper, lead and zinc.
On September 24, Vior commenced a fully funded 60,000 meter drill program at Belleterre, which will operate through mid-2025. The company says it is the largest drill program at the site since the mine closed in 1959.
The first assays were announced on November 12, and the company reported high-grade gold at depth. The results include highlighted intercepts of 9 g/t gold over 1.2 meters from the Belleterre area, and 4 g/t gold over 1.2 meters from the Aubelle area. Vior said the results confirm the continuity and potential for expansion of mineralization at the site.
The company’s most recent announcement came on Thursday, when it announced that Mathieu Savard, Osisko Mining's former president, will become Vior's new president and CEO. He will be joined by Pascal Simard, who was Osisko’s vice president of exploration. Simard will hold the same role at Vior.
FAQs for Canadian mining stocks
What is the difference between the TSX and TSXV?
The TSX, or Toronto Stock Exchange, is used by senior companies with larger market caps, and the TSXV, or TSX Venture Exchange, is used by smaller-cap companies. Companies listed on the TSXV can graduate to the senior exchange.
How many companies are listed on the TSXV?
As of June 2024, there were 1,630 companies listed on the TSXV, 925 of which were mining companies. Comparatively, the TSX was home to 1,806 companies, with 188 of those being mining companies.
Together the TSX and TSXV host around 40 percent of the world’s public mining companies.
How much does it cost to list on the TSXV?
There are a variety of different fees that companies must pay to list on the TSXV, and according to the exchange, they can vary based on the transaction’s nature and complexity. The listing fee alone will most likely cost between C$10,000 to C$70,000. Accounting and auditing fees could rack up between C$25,000 and C$100,000, while legal fees are expected to be over C$75,000 and an underwriters’ commission may hit up to 12 percent.
The exchange lists a handful of other fees and expenses companies can expect, including but not limited to security commission and transfer agency fees, investor relations costs and director and officer liability insurance.
These are all just for the initial listing, of course. There are ongoing expenses once companies are trading, such as sustaining fees and additional listing fees, plus the costs associated with filing regular reports.
How do you trade on the TSXV?
Investors can trade on the TSXV the way they would trade stocks on any exchange. This means they can use a stock broker or an individual investment account to buy and sell shares of TSXV-listed companies during the exchange's trading hours.
Article by Dean Belder; FAQs by Lauren Kelly.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Securities Disclosure: I, Lauren Kelly, hold no direct investment interest in any company mentioned in this article.
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13 December
Top Stories This Week: Gold Price Reacts to Inflation Data, Trump Makes Big Permitting Promise
The gold price rose early on this week, breaking US$2,700 per ounce on Wednesday (December 11).
The metal was reacting to the latest US consumer price index (CPI) data, which shows a 2.7 percent year-on-year increase for the month of November. That's up slightly from the 2.6 percent annual gain seen in October.
CPI was up 0.3 percent month-on-month, again higher than October's 0.2 percent rise. Core CPI, which excludes the more volatile food and energy categories, was up 3.3 percent year-on-year and 0.3 percent from the previous month.
The US Federal Reserve meets next week from December 17 to18, and was already widely expected to cut rates by 25 basis points, bringing the 2024 total to 100 basis points. This week's CPI data has further cemented those expectations.
Thursday (December 12) brought the release of producer price index (PPI) numbers out of the US, with the year-on-year increase for November coming in at 3 percent — above October's 2.4 percent and higher than projections. PPI was up 0.4 percent from the previous month, also higher than the 0.2 percent rise reported in October.
Core PPI was up 3.4 percent year-on-year and 0.2 percent from the previous month. Analysts believe the PPI data points to stickiness in inflation and indicates the US Federal Reserve's 2 percent target is further away than it looks.
"The Federal Reserve can feel largely pleased with the progress made on lowering high levels of inflation over the last couple years," Yahoo Finance quotes Rick Rieder, BlackRock global CIO of fixed income, as saying. "But the bulk of this progress is behind us now and inflation may remain stubbornly sticky near current levels for a time."
Gold finished the week about flat from where it began at US$2,646.63.
Bullet briefing — Trump talks permitting, Agnico to buy O3
Trump to fast track permitting
Incoming President Donald Trump caught the attention of resource sector investors this week with his promise of "fully expedited approvals and permits" for people or companies that invest at least US$1 billion in the US.
Trump announced the news on his social media platform Truth Social, but so far has provided little in the way of specifics. Even so, mining industry participants have taken the news as a positive sign that builds on his nominations of Chris Wright and Doug Burgum, who respectively will run the departments of energy and the interior.
Speaking recently to the Investing News Network, Chris Temple of the National Investor emphasized the importance of Burgum's appointment. Here's how he explained it:
"Not only is Burgum going to run the interior department, he is going to be a 'super czar,' if you will, who will oversee energy, and the (Environmental Protection Agency), and the interior department and the agencies — all of those who have got anything to do ... with permitting, with environmental issues, with all of these different things — not just for energy, but for metals, for mining and all of that.
Last but most important is that Burgum will be on the president's National Security Council ... So Burgum is going to have a much, much, much larger role in all of this than has been reported."
Agnico offers C$204 million for O3 Mining
M&A activity was in the air in the gold space once again this week as Agnico Eagle Mines (TSX:AEM,NYSE:AEM) announced plans to acquire O3 Mining (TSXV:OIII,OTCQX:OIIIF) in a friendly takeover deal.
The all-cash offer of C$1.67 per share represents a 58 percent premium to O3's closing share price on Wednesday and values the company at C$204 million. Agnico said in a press release that it expects O3's Marban Alliance project to complement its Canadian Malartic complex, a major gold operation located in Québec, Canada.
"The all-cash offer at a significant premium to market is an excellent outcome for our shareholders and is validation of the efforts made by the O3 Mining team" — José Vizquerra, O3 Mining
The deal was structured as a tender offer due to an ongoing Canada Post strike, meaning it doesn't require a shareholder vote at O3. Shares of O3 climbed substantially after the news and were up about 60 percent for the week.
Want more YouTube content? Check out our expert market commentary playlist, which features interviews with key figures in the resource space. If there's someone you'd like to see us interview, please send an email to cmcleod@investingnews.com.
And don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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12 December
Lawrence Lepard: "Big Print" Coming — Fully Expect US$5,000 Gold, US$200,000 Bitcoin
Speaking to the Investing News Network, Lawrence Lepard, managing director at EMA, voiced his thoughts on the outlook for gold and Bitcoin as the debt doom loop intensifies in the US.
"I call it a doom loop — it's a vicious circle in the wrong direction, which I believe will ultimately lead to the government having to say, 'Okay, this isn't going to work. We are going to institute yield curve control or QE, or we're going to buy the bonds,'" he explained on the sidelines of the New Orleans Investment Conference.
Lepard believes it's important to hold both gold and Bitcoin, noting that the only wrong allocation is zero.
"I fully expect Bitcoin's going to go to US$200,000, and I fully expect gold's going to go to US$5,000 (per ounce) in the next couple of years," he said. "All the suffering gold stock holders out there ... we're going to be very pleasantly surprised."
Watch the interview above for more from Lepard on gold and Bitcoin, as well as silver. You can also click here to view the Investing News Network's New Orleans Investment Conference playlist on YouTube.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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12 December
Chris Temple: Gold's Next Leg Higher, Plus Uranium and Natural Gas in 2025
Chris Temple, founder, editor and publisher of the National Investor, outlined the main factors he sees impacting the gold price heading into 2025, saying the yellow metal will undoubtedly move higher.
In his view, its rise will come as market participants realize how many problems the US economy is facing.
"I think that once that reality sets in, gold will get its next big lease on life and the stock market is going to bog down. I think we're going to see a lot of rotation in the market that will start to favor real assets and real value — away from everybody chasing the same relative handful of stocks as we've seen," Temple explained.
Aside from gold, Temple spoke about natural gas and uranium, his other two favorite commodities in the near term.
He also discussed the potential implications of Donald Trump's second presidency, saying it will be key to watch how he develops the US' relationship with China, especially as the Asian nation grapples with internal problems.
"This is the most important thing that consumers and investors and policy makers need to watch in 2025 — is Trump smart on how he deals with all of this and rebuilds our own industries to compensate for years down the road? Or is he going to be ham-fisted about it and cause more problems than he solves?" Temple questioned.
Watch the video above for more from Temple on what's to come in 2025.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
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12 December
WGC: Gold to Face Complex Drivers in 2025, Price Likely to Cool After Record-Breaking Year
The World Gold Council (WGC) has released its 2025 gold outlook, highlighting various macroeconomic factors, geopolitical risks and central bank activity as pivotal forces influencing demand and prices.
While 2024 saw gold achieve a stellar performance with a 28 percent annual increase, the outlook for 2025 is characterized by a mix of opportunities and challenges stemming from both global and regional developments.
The yellow metal has benefited from its historical role as a hedge against uncertainty, but the WGC forecasts that its performance next year will depend on other key variables as well.
Gold to face complex drivers next year
Looking back at 2024, the WGC outlines multiple factors that drove gold's strong performance.
For instance, central bank demand reached significant levels, underscoring the metal's enduring role as a safe-haven asset. Central banks have now been net buyers of gold for nearly 15 years.
Meanwhile, investor interest surged amid geopolitical instability and market volatility, particularly in the third quarter, when western investors returned to the market, driven by lower yields and a weakening US dollar.
Asian demand, a critical component of the gold market, played a supportive role in the first half of the year.
Indian demand was buoyed by favorable policy changes, including a reduction in import duties, while Chinese investors turned to gold amid concerns about economic growth.
Heading into 2025, the complex global economic picture is creating uncertainty for gold.
In the US, Donald Trump is expected to introduce policies that stimulate domestic economic growth during his second term as president, potentially driving risk-on sentiment in the short term. However, these policies could also create inflationary pressures and disrupt supply chains, leading investors to seek the stability of assets like gold.
Central banks, including the US Federal Reserve, are anticipated to continue cutting interest rates. Market consensus suggests the Fed will cut by 100 basis points in 2025, with similar actions expected in Europe.
The WGC forecasts in its report that a dovish monetary policy environment could be supportive for the gold price, particularly if inflation remains above target levels. On the other hand, any reversal in monetary policy or a prolonged pause in rate cuts could present challenges for gold, as higher opportunity costs may deter investors.
Similarly, subdued economic growth could limit consumer demand, particularly in Asia, where gold plays a dual role as an investment and a cultural staple.
Asia and central banks to lead gold buying
In 2025, the WGC predicts that Asia will remain a cornerstone of the global gold market. The continent accounts for over 60 percent of annual demand, excluding central bank activity.
Chinese consumer demand, which has been relatively muted, is likely to hinge on the country’s economic policies and growth trajectory. Trade tensions and domestic stimulus measures could sway demand either way, while gold may face increased competition from alternative investment avenues such as equities and real estate.
For its part, India is better positioned to sustain gold demand. With economic growth projected to remain above 6.5 percent and a smaller trade deficit compared to other US trading partners, the WGC believes Indian consumers are likely to continue purchasing gold both for investment and cultural purposes.
Central bank activity will remain a critical driver for gold in 2025. While demand may not reach the heights of recent years, it is expected to surpass long-term averages, providing a consistent source of support for the market.
Central bank purchases are influenced by geopolitical risk, sovereign debt levels and portfolio diversification. These drivers are unlikely to wane, ensuring that central banks will continue to play a stabilizing role in the gold market.
However, any significant deceleration in central bank demand could exert downward pressure on the gold price, particularly if combined with other bearish factors such as higher interest rates or reduced investment flows.
Overall, the WGC predicts that in 2025 the gold market is likely to be shaped by the interplay of four primary drivers: economic expansion, risk, opportunity cost and momentum.
Economic growth, though expected to remain positive, will likely be below trend, limiting the scope for consumer demand growth. Geopolitical risks, including ongoing tensions in regions like South Korea and Syria, may prompt investors to increase their allocations to gold as a hedge against uncertainty.
The opportunity cost of holding gold, determined by interest rates and yields, will be a critical factor. Lower rates should support gold, but any unexpected tightening of monetary policy could dampen investment demand.
Finally, market momentum, influenced by technical factors and investor sentiment, will play a role in determining gold’s short-term performance. A strong start to the year, fueled by initial risk-on sentiment, could pave the way for a more stable or even bullish trajectory, provided macroeconomic conditions remain favorable.
How will the gold price perform in 2025?
Market consensus suggests gold will remain rangebound in 2025, potentially seeing modest gains.
However, the WGC reminds investors that the market is not without risks. A rapid deterioration in financial conditions, unexpected geopolitical developments or a sharp rise in central bank demand could provide upside surprises.
Conversely, a reversal in monetary policy or subdued demand from key markets could cap gold’s performance.
Either way, both investors and analysts will closely monitor developments related to the key regions and variables mentioned to gauge the direction of the gold market this coming year.
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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12 December
Increased M&A Activity a Win-Win for Gold Sector, Brightstar Resources Exec Says
Following the completion of its acquisition of Alto Metals, Brightstar Resources (ASX:BTR) plans to conduct 50,000 metres of reverse-circulation and diamond drilling, beginning next year, at Alto Metals' approximately 900 square kilometre Sandstone gold project in Western Australia.
In an interview with the Investing News Network, Brightstar Managing Director Alex Rovira outlined the next steps for merging Alto Metals with Brightstar’s assets and the strategy for moving forward.
“From an exploration perspective … it's really focusing on the Sandstone package. We will do near-mine brownfields exploration at our Menzies and Laverton gold projects. And really, the aspiration there is to take a number of those mines toward development decisions,” he said.
Brightstar’s Alto Metals acquisition is one of an increasing number of mergers and acquisitions within the gold space in recent years, fueled by a strengthening gold price and a desire to boost gold production.
In 2024 alone, Brightstar has acquired three companies — Linden Gold, Gateway Mining and Alto Metals — boosting the company’s gold resources and bringing it closer to production.
Rovira added that Brightstar’s global resources have grown from 400,000 ounces to 3 million ounces to date through a combination of M&A and resource exploration.
“For us in our business, it made a lot of sense to conduct some of this M&A, because it was almost cheaper at times to be acquiring ounces than it was to raise the money and explore for them. So we managed to consolidate a number of mispriced or undervalued opportunities in Western Australia,” he said.
Rovira offered his insight on the trend of increasing M&A in the gold sector, calling Northern Star Resources' (ASX:NST,OTC Pink:NESRF) planned US$5 billion acquisition of De Grey Mining (ASX:DEG,OTC Pink:DGMLF) a “win-win.”
“What that does is it frees up capital in the sector so investors can monetise those positions and they can look to reinvest that in other gold-mining companies. So it is good for liquidity, it's good for investors (and) ultimately for the companies as well. It provides access to capital whether there's operational synergies, different teams coming in and looking at different projects,” Rovira said.
Watch the full interview with Alex Rovira, managing director of Brightstar Resources, above.
Disclaimer: This interview is sponsored by Brightstar Resources (ASX:BTR). This interview provides information which was sourced by the Investing News Network (INN) and approved by Brightstar Resources in order to help investors learn more about the company. Brightstar Resources is a client of INN. The company’s campaign fees pay for INN to create and update this interview.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Brightstar Resources and seek advice from a qualified investment advisor.
This interview may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, receipt of property titles, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The issuer relies upon litigation protection for forward-looking statements. Investing in companies comes with uncertainties as market values can fluctuate.
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