- WORLD EDITIONAustraliaNorth AmericaWorld
Gold Stocks in Western Australia
Australia is a powerhouse in the gold industry, and Western Australia is a key area for production within the country. Find out which companies are operating in the state.
Widely considered a safe-haven asset and a store of wealth, gold is appealing to many investors.
Beyond buying physical gold itself, it's popular to invest in companies that mine and explore for the precious metal. But the universe of gold stocks is vast — so where should investors start?
Western Australia is one option. Australia is the world's second largest gold-producing country, and Western Australia is an increasingly sought-out jurisdiction. Read on for a breakdown of the state's gold market.
Where is gold found in Western Australia?
As mentioned, Australia is the second largest gold-producing country in the world. Gold output in the nation came in at 330 metric tons in 2021, up from 238 metric tons the previous year.
Western Australia is considered one of the best mining jurisdictions globally by the Fraser Institute, and it's also one of the more prolific gold-mining areas in Australia. In fact, it accounted for around 63 percent of the country’s entire gold production in 2021, as per government information.
Recent exploration activity in the Pilbara region of Western Australia has renewed interest and helped increase the country’s gold output. The area has been compared to South Africa’s Kaapvaal craton and Witwatersrand basin for their geological similarities, age and the fact that they sit atop Archean granite-greenstone.
While the Pilbara region is typically best known as one of the world’s largest producers of iron ore, it is currently experiencing increased gold exploration thanks to a major discovery in 2017 by Novo Resources (TSXV:NVO,OTCQX:NSRPF) and Artemis Resources (ASX:ARV,OTCQB:ARTTF); there was also a similar find by De Grey Mining (ASX:DEG,OTC Pink:DGMLF) more recently in 2020.
Other explorers that are active in the Pilbara region include NxGold (TSXV:NXN), Kairos Minerals (ASX:KAI,OTC Pink:MPJFF), Pacton Gold (TSXV:PAC,OTC Pink:PACXF) and Monterey Minerals (CSE:MREY). Major miners like Rio Tinto (ASX:RIO,LSE:RIO,NYSE:RIO) and BHP (ASX:BHP,NYSE:BHP,LSE:BHP) have also invested in the region.
How to invest in gold stocks?
Like all publicly listed stocks, gold companies issue shares that are available for investors to trade. When you purchase shares of a gold stock, you are essentially purchasing a stake in the company, making an investment that will either provide financial returns or losses depending on the firm's performance.
In Australia, companies are traded on the Australian Securities Exchange, known as the ASX. A wide range of gold stocks are listed on the exchange, from stable large-cap companies to more risky junior miners.
There's no way for gold stock investing to be 100 percent foolproof. But you can reduce some of the stress by doing your due diligence on companies — there are many factors to consider, but some of the key elements to consider are a strong management team, a well-stocked treasury and a clear plan for the future.
That said, it's important to understand that the performance of gold companies is correlated to the gold price. While they may not always move in tandem, it's typical for gold stocks to thrive when the metal's price is higher and vice versa. Gold itself is usually viewed as a counter-cyclical asset, meaning it increases in value while the market is down — that means times of turmoil can be a good opportunity to put money into gold stocks as well.
What are the top Western Australian gold stocks?
There are many ASX-listed gold companies focused on assets in Western Australia, and they may be a good place to begin if you're interested in getting gold exposure in the state.
The five companies below are ASX-listed gold stocks focused Western Australia, and they had seen the biggest share price gains year-to-date as of May 21, 2022. Data was gathered using TradingView’s stock screener, and companies with market caps of over AU$50 million at that time were considered.
1. Surefire Resources
Year-to-date gain: 208.33 percent; current share price: AU$0.03
Surefire Resources (ASX:SRN) holds the Yidby gold project in the southern portion of the Yalgoo-Singleton greenstone belt. In total, its three exploration licences cover 113.77 square kilometres.
Yidby is located near the Great Northern Highway, which connects multiple different mining centres, and the project is surrounded by other gold assets. These include the Mount Gibson gold project located 30 kilometres to the south; it was recently acquired by Capricorn Metals (ASX:CMM,OTC Pink:CRNLF).
2. Essential Metals
Year-to-date gain: 182.05 percent; current share price: AU$0.55
Essential Metals (ASX:ESS) owns 100 percent of the Golden Ridge project, which is located within the Menzies-Boorara shear zone (MBSZ). Golden Ridge is located 20 kilometres southeast of Northern Star Resources’ (ASX:NST,OTC Pink:NESRF) Kalgoorlie superpit. The MBSZ also hosts the Golden Ridge and Boorara deposits, owned by Horizon Minerals (ASX:HRZ), a mid-tier producer of the yellow metal.
Essential Minerals also owns 100 percent of the Juglah Dome project. Previous exploration efforts identified gold targets via soil geochemistry and drilling, and the area is seen as potentially very prospective for gold exploration.
3. Bulletin Resources
Year-to-date gain: 167.12 percent; current share price: AU$0.19
Western Australia-based Bulletin Resources (ASX:BNR) runs the Lake Rebecca gold project, which covers an area of over 600 square kilometres in the Laverton tectonic zone. Exploration and drilling efforts have shown that the Lake Rebecca project area shows potential for gold mineralisation.
Bulletin Resources also has the Chifley project, which covers 79 square kilometres of unexplored tenements on the Claypan fault. Bulletin is currently exploring the area for gold prospects.
There’s also Duketon North, where the company has found targets for gold-in-soil anomalies and nickel.
4. Red 5
Red 5 (ASX:RED) operates both the Darlot and King of the Hills assets in the Eastern Goldfields region of Western Australia. The King of the Hills gold project is in the state's Leonora-Leinster mineral province.
Currently, the company is constructing a 4 million tonne per year processing plant at King of the Hills. The whole property, underpinned by 2.4 million ounces of ore reserves and a 16 year predicted life, is fully financed after the company raised a total of AU$235 million in 2021.
In its 2021 fiscal year, Red 5 reported 76,104 ounces of gold production at its Western Australia operations at an average head grade of 2.63 grams per tonne.
Year-to-date gain: 25.53 percent; current share price: AU$0.59
Last December, Ausgold (ASX:AUC) released a resource upgrade for the Katanning gold project in the Yilgarn craton’s Katanning greenstone belt. The upgrade represented an increase of 53 percent in ounces and 14 percent in grade. Now, the project contains a measured, indicated and inferred 1.84 million ounces of gold at 1.24 grams per tonne, 65 percent of which is measured and indicated.
This is an updated version of an article first published by the Investing News Network in 2019.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Matthew Flood, currently hold no direct investment interest in any company mentioned in this article.
Matthew Flood is a writer and editor from Montreal, Canada. He's been writing professionally for four years on a wide array of topics ranging from investments and real estate to cookware and home improvement. Matt also enjoys creative writing and has written two novels and a novella.
Learn about our editorial policies.