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Magnetic Resources NL (ASX:MAU) (Magnetic or the Company) is pleased to announce that LJN4 continues to deliver with deepest intersection at 650m.
- After a significant intersection of 16m at 4.51g/t from 411m within MLJDD033, which was a very large 200m step out below the current resource (Figures 1 and 4) a further seven deeper diamond holes totalling 2,354m holes averaging 336m were drilled to ascertain the depth continuity in other parts of the LJN4 Deposit. Some compelling intersections are outlined below.
- MLJDD039 has the deepest intersection to date of 28m at 1.19g/t from 432m including 7m at 2.57g/t from 432m and is 100m down dip of MLJDD033 which intersected 25m at 3.01g/t from 408m and includes 16m at 4.51g/t from 411m. These intersections (Figure 1) are part of a 650m down dip, 45-degree mineralised zone, which is the longest so far within the 750m long LJN4 deposit.
- In the northern part of LJN4 there is a strong green fuchsite-silica-pyrite alteration within the ultramafic. Drill holes MLJDD040 intersected 7m at 4.73g/t from 380m (Figure 2 ) and contained silicified ultramafic with fuchsite and quartz veins. This intersection is 100m down dip of MLJRCD829 which intersected 17m at 2.31g/t from 287m which includes 7m at 4.22g/t from 292m (which is also intensely fuchsite altered with quartz veins). The extend of this down dip zone is 450m and is still open at depth.
- This ultramafic alteration is much more prevalent and occurs within the 350m long northern part of LJN4 (Figure 3) and is also present in holes MLJDD044 (from 376-396m), MLJDD045 (from 313-350m) and MLDD051 (from 313-340m), which have assays pending. The central and northern parts of LJN4 are still open at depth and there is a suggestion that the zones plunge to the SE (Figure 3).
- These intersections in MLJDD039 and 40 are far below the open pit from our PFS study (ASX release 7 March 2024) and are also not included in our current resource, this augers well for the enlargement of the resource, increasing both the potential size of the open pit and the accompanying positive economic studies.
- MLRDD036 intersected 18.9m at 2.26 g/t from 275M within a 21m zone, which is a 40m step out down dip from MLJRCD807 which intersected 15.2m at 1.79g/t from 287m (Figure 4).
- As described in the 5 March 2024 ASX release there was a 7.7% increase in overall resource in the Laverton Project to 24.9Mt @1.66g/t totalling 1.33moz of gold at 0.5g/t cut off and LJN4 has increased 11% to 948,200 oz (Table 1).
- It is particularly interesting that we have 8 stacked lodes in the central part of LJN4 and we have one planned 600m hole that will be testing for stacked lodes beneath the current mineralised stacked lodes.
- A number of deeper step out holes have now been carried out to see whether the LJN4 resource appears to extend further at depth and there are assays pending for 7 diamond drillholes totalling 1980m averaging 396m and include MLJDD042-46, 48, 50, 51) and 14 RC drillholes totalling 946m (MLJRC839-859). In addition, there are 6 holes being drilled in this current programme totalling 2800m and averaging 466m and are expected to be completed by the end of May 2024 with three diamond rigs operating.
The central and northern part of the 750m long LJN4 deposit has been drilled with very promising results. Highlights of this drilling are shown in Table 4, Figures 1-4.
Figure 1. Composite section for LJN4 central area showing high-grade dipping gold zone containing resource model outline and MLJDD039 being a down dip extension of over 100m from MLJDD033and being part of a very large 650m interpreted down dip mineralised zone.
Figure 2. Cross section for LJN4 northern area showing high-grade dipping gold zone containing resource model outline and MLJDD040 being a down dip extension of over 100m with intense fuchsite alteration.
Figure 3. Composite Inclined Longitudinal Projection of LJN4 in gram-metres. Highlighting continuous mineralisation over the whole 750m length, being open at depth in the central area and suggesting a SE plunging zone. New drilled holes awaiting assays (in blue) and further planned holes (in yellow).
Figure 4. The Lady Julie North 4 deposit has numerous significant thick intersections from the latest drill programme (yellow large rectangular label) and previous drilling (white label) with maximum gold projected to surface and planned deeper drillholes (in yellow).
The follow up deeper diamond holes have tested and are looking to extend up to two and in some cases eight, stacked lodes mainly found in the central parts of LJN4. Hole MLJDD053 is a 600m deep hole and is designed to investigate for further stacked lodes below the current bottom stacked lode. Many of these are outside the existing resource and have potential for the enlargement of the LJN4 (Indicated and Inferred) of 15.4mt at 1.92g/t for 948,200oz at a 0.5g/t cutoff (Table 1).
Click here for the full ASX Release
This article includes content from Magnetic Resources NL, 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.
MAU:AU
Lahontan Gold Announces Positive Preliminary Economic Assessment for Santa Fe
Lahontan Gold Corp. (TSXV:LG)(OTCQB:LGCXF)(the "Company" or "Lahontan") is pleased to announce results from a positive Preliminary Economic Assessment(" PEA") on its flagship Santa Fe Mine gold-silver project located in Nevada's prolific Walker Lane Trend. The PEA was prepared by Kappes, Cassiday & Associates ("KCA") of Reno, Nevada with mine planning and production scheduling contributions from RESPEC Company LLC ("Respec"), Reno, Nevada and mineral resource estimation by Equity Exploration Consultants Ltd. ("Equity"), of Vancouver, British Columbia, in accordance with Canadian National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101").
PEA Highlights:
- Pre-tax Net Present Value at a 5% discount rate ("NPV5") of US$265.1 M with a 41.0% IRRwith an After-tax NPV5 of US$200.0 M with a 34.2% IRR utilizing a $2,705/oz gold price and a $32.60/oz silver price ("spot metal prices") (see spot metal price to base case metal price comparison in Table 1).
- Total Life-of-Mine ("LOM") Pre-tax net cash flow of US$373.3 M and After-tax net cash flow of US$288.9 M over a nine-year project life using spot metal prices.
- Total projected LOM revenue of US$930.8 M over a nine-year project life using spot metal prices.
- LOM strip ratio of only 1.54 (waste to mineralized material ratio).
- Estimated pre-production capital costs of US$135.1 M including a 20% contingency, with a payback of 2.9 years using spot metal prices.
Kimberly Ann, Lahontan Gold Corp Executive Chair, CEO, President, and Founder commented: "Lahontan is very excited about the results of the PEA: a low-capex, highly profitable mining project with a quick payback certainly bodes well for the future of Lahontan and all stakeholders. There is considerable potential to expand gold and silver resources, therefore this is just the first step in restarting mining operations at Santa Fe. With mine permitting well under-way, targeting a 2026 mine ground-breaking, the potential for the Company to realize the economic outcomes outlined in the PEA is very real, especially given current trends in gold and silver prices. Continued optimization of the mine plan, resource expansion drilling, and refining the metallurgical flow sheet are planned for 2025, in parallel with our permitting activities."
The PEA is preliminary in nature, includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Company has not defined any Mineral Reserves at the Santa Fe Mine project.
Economic Sensitivities
Sensitivity of the project economics to metals prices is shown in Table 1, showing the base case metal prices used for the PEA, as well as a low case, a high case and the spot case.
Table 1: Santa Fe Project 2024 PEA Economics
Low Case | Base Case | High Case | Spot Case (1) | |
Gold Price (US$/oz) | 1,800 | 2,025 | 2,200 | 2,705 |
Silver Price (US$/oz) | 21.50 | 24.20 | 26.3 | 32.60 |
Net Revenue (US$) | 618.6 M | 696.2 M | 756.5 M | 930.8 M |
Pre-Tax NCF(2) (US$) | 65.0 M | 141.6 M | 201.2 M | 373.3 M |
Pre-Tax NPV5(3) (US$) | 21.7 M | 82.2 M | 129.2 M | 265.1 M |
Pre-Tax IRR(4) | 8.5% | 17.4% | 23.9% | 41.0% |
After-Tax NCF(2) (US$) | 47.8 M | 107.7 M | 154.1 M | 288.9 M |
After-Tax NPV5(3) (US$) | 8.7 M | 56.5 M | 93.3 M | 200.0 M |
After-Tax IRR(4) | 6.4% | 14.0% | 19.5% | 34.2% |
Payback Period(5) (years) | 5.1 | 4.2 | 3.8 | 2.9 |
(1) As of December 10, 2024
(2) NCF means net cash flow
(3) NPV5 refers to net present value at 5% discount rate
(4) IRR means internal rate of return
(5) Pre-production capital, excluding sustaining capital
Capital Costs
Capital costs for the project are summarized in Table 2. Capital costs associated with the mining operation were estimated by RESPEC and based on mining by contractor. Pre-stripping costs were based on the operating costs discussed below. Capital costs associated with processing such as crushing, heap leaching and metal recovery, along with support and infrastructure costs associated with laboratory, water and power distribution and general site services were estimated by KCA. Reclamation and closure costs of $12.5 M were estimated by KCA.
Table 2: Project Capital Costs
Pre-Production (US$ M) | LOM Sustaining (US$ M) | |
Mining | 2.5 | 0.8 |
Processing, Support & Infrastructure | 116.0 | 17.0 |
Owner's Costs | 5.3 | 0.0 |
Initial Fills | 0.5 | 0.0 |
Working Capital(1) | 10.7 | 0.0 |
TOTAL(2) | 135.1 | 17.8 |
- Working capital is credited in Year 9
- Values are rounded and may not sum perfectly
Operating Costs
Operating costs for the project are summarized in Table 3. Mining operating costs were estimated by RESPEC and based on estimated anticipated equipment hours and personnel requirements at a 25% markup for contractor rates. The off-road red-dye diesel fuel price in this estimate was assumed to be $0.74/L. All other operating costs were estimated by KCA and based on first principles on certain components where possible, such as reagent and power consumption, along with benchmarking with similar operations for other components, such as labor, maintenance and discretionary expenses
Table 3: Project Operating Costs
LOM Total (US$ M) | Per Tonne Processed ($/t) | |
Mining | 204.2 | 7.36 |
Processing | 138.7 | 5.00 |
Support & Infrastructure | 17.3 | 0.62 |
G&A | 35.8 | 1.29 |
TOTAL(1) | 402.5 | 14.28 |
(1) Values are rounded and may not sum perfectly
Mine Production Schedule
The PEA mine production schedule includes mining of leach material and waste for the Santa Fe, Calvada, Slab, and York deposits. Leach material was assumed to be sent to a centralized crushing plant and then stacked on a leach pad and the waste material was sent to designed waste rock storage facilities (WRSF) or used as partial backfill into the Calvada pit.
Because the Santa Fe Mine is a brown-field project, minimal pre-stripping is required to develop sufficient stockpiles to feed the crusher. The mine production schedule requires 2 months of preproduction which begins in the Santa Fe deposit. The Calvada deposit is started in year 2 and mined concurrently with Santa Fe. Calvada mining is followed by mining of Slab and York deposits.
The process schedule was developed with a ramp up of production from year 1 through year 3 to a full 4.56 million tonnes per year. Table 4 shows the process production schedule.
Table 4: Projected Production Summary
Year | Tonnes Processed (kt) | Gold Grade (g/t) | Silver Grade (g/t) | Gold Produced (koz) | Silver Produced (koz) | Gold Equivalent Produced(1) (koz) |
1 | 3,468 | 0.47 | 4.1 | 30.3 | 88.1 | 31.4 |
2 | 4,517 | 0.58 | 4.6 | 51.4 | 168.9 | 53.4 |
3 | 4,563 | 0.66 | 3.7 | 60.2 | 155.7 | 62.0 |
4 | 4,563 | 0.70 | 3.0 | 60.5 | 124.2 | 62.0 |
5 | 4,563 | 0.73 | 2.5 | 62.0 | 93.5 | 63.1 |
6 | 4,563 | 0.61 | 2.2 | 49.9 | 56.9 | 50.5 |
7 | 1,497 | 0.58 | 2.1 | 20.1 | 23.1 | 20.4 |
8(2) | 0 | 2.3 | 4.2 | 2.3 | ||
TOTAL(3) | 27,731 | 0.63 | 3.3 | 336.7 | 714.7 | 345.2 |
- Equivalent gold calculation is based on base case metal prices
- Residual leaching production only
- Values are rounded and may not sum perfectly
Table 5 shows the key production parameters for the mine and processing units used in the generation of the production and cash flow profiles.
Table 5: Key Mining and Processing Production Parameters
LOM | |
Mining | |
Total Waste Tonnes Mined (Mt) | 42.9 |
Total Processed Tonnes Mined (Mt) | 27.7 |
Total Tonnes Mined (Mt) | 70.6 |
Heap Recovery - Gold | |
Santa Fe Oxide | 71% |
Santa Fe Transition | 49% |
Calvada Oxide | 71% |
Calvada Transition | 45% |
Slab Oxide | 50% |
York Oxide | 60% |
York Transition | 45% |
Heap Recovery - Silver | |
Santa Fe Oxide | 30% |
Santa Fe Transition | 30% |
Calvada Oxide | 13% |
Calvada Transition | 0% |
Slab Oxide | 12% |
York Oxide | 0% |
York Transition | 0% |
Mining and Processing
The mineralized material will be mined by standard open-pit mining methods using a contractor-owned and operated mining fleet consisting of 92-tonne haul trucks and 11.5-m3 loading units and transported to the crushing circuit for processing.
Mineralized material from the Santa Fe, Calvada, Slab and York deposits will be processed by conventional heap leaching methods. The nominal processing rate will be 4.6 million tonnes per annum or 12,500 tonnes per day. Three-stage crushing of the material to 12.7 mm, will be followed by conveyor stacking on to a multi-lift heap leach pad. Dilute sodium cyanide solution will be applied to the heap, with the pregnant gold and silver-bearing solution effluent from the heap being processed in a carbon adsorption-desorption-recovery (ADR) plant. Gold and silver will be produced in the form of doré bars from the on-site smelting process.
Mineral Resource Estimation
The mineral resource estimate ("MRE") was prepared in accordance with the CIM Definition Standards and Canadian National Instrument NI-43-101. The effective date of the MRE prepared by Equity is October 9, 2024. The MRE is shown in Table 6.
Table 6: Project-wide Resources, Santa Fe Mine, Mineral County, Nevada
Notes to Table 6:
- Mineral Resources have an effective date of October 9, 2024. The Mineral Resource Estimate for the Santa Fe Mine was prepared by Trevor Rabb, P.Geo., of Equity Exploration Consultants Ltd., an independent Qualified Person as defined by NI 43-101.
- Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Inferred Resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be classified as Mineral Reserves. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that most of the Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
- Resources are reported in accordance with NI43-101 Standards of Disclosure for Mineral Projects (BCSC, 2016) and the CIM Definition Standards for Mineral Resources and Mineral Reserves (CIM, 2014).
- Mineral Resources were estimated for gold, silver, and gold equivalent (Au Eq) using a combination of ordinary kriging and inverse distance cubed within grade shell domains.
- Mineral resources are reported using a cut-off grade of 0.15 g/t Au Eq for oxide resources and 0.60 g/t Au Eq for non-oxide resources. Au Eq for the purpose of cut-off grade and reporting the Mineral Resources is based on the following assumptions gold price of US$1,950/oz gold, silver price of US$23.50/oz silver, and oxide gold recoveries ranging from 45% to 79%, oxide silver recoveries ranging from 10% to 30%, and non-oxide gold and silver recoveries of 71%, mining costs for resource and waste of US$2.50/t, processing cost (oxide) US$3.49/t, processing cost (non-oxide) US$25/t.
- An optimized open-pit shell was used to constrain the Mineral Resource and was generated using Lerchs-Grossman algorithm utilizing the following parameters: gold price of US$1,950/oz gold, silver price of US$23.50/oz silver, and selling costs of US$29.25/oz gold. Mining costs for resource and waste of US$2.50/t, processing cost (oxide) US$3.49/t, processing cost (non-oxide) US$25/t, G&A cost US$1.06/t. Royalties for the Slab, York and Calvada deposits are 1.25%, and maximum pit slope angles of 50 degrees.
- Totals may not sum due to rounding.
Estimation Approach: Lithology and gold and silver bearing domains were modelled using Leapfrog 2024. These domains are mainly defined by logged jasperoid and limestone-breccia lithologies and continuity of gold grades above 0.1 g/t gold. Metallurgical domains for oxide, transition and non-oxide were modelled based on ratio of cyanide leachable gold assay values to fire assay gold values in addition to drillhole logs recording abundance of pyrite and oxidation intensity. Transition material represents approximately 35% of oxide tonnes and comes almost entirely from the Santa Fe deposit. Transition domain material is included in the oxide resource. Domains representing lithology, weathering and mineralization models were assigned to a block model with a block size of 5 m x 5 m x 6 m. Average bulk densities representative of the mineralization and lithology models were assigned to the block model and vary from 2.4 t/m3 to 2.6 t/m3.
Grade capping and outlier restrictions were applied to gold and silver values and interpolation parameters respectively. Top cut values for gold and silver were evaluated for each domain independently prior to compositing to 1.52 m lengths that honor domain boundaries. Estimation was completed using Micromine Origin with Ordinary Kriging (OK) and Inverse Distance cubed (ID3) interpolants. Blocks were classified in accordance with the 2014 CIM Definition Standards. The nominal drillhole spacing for Indicated Mineral Resources is 50 m or less. The nominal drillhole spacing for Inferred Mineral Resources is 100 m or less.
Prospects for eventual economic extraction were evaluated by performing pit optimization using Lerchs-Grossman algorithm with the following parameters: gold price of US$1,950/oz gold, silver price of US$23.50/oz silver, selling costs of US$29.25/oz gold. Mining costs for resource and waste of US$2.50/t, processing cost (oxide) US$3.49/t, processing cost (non-oxide) US$25/t, G&A cost US$1.06/t. Royalties for the Slab, York and Calvada deposits are 1.25%. Maximum pit slope is 50 degrees. Processing recoveries range from 45% to 79% for oxide, silver recoveries range from 10% to 30% for oxide and non-oxide gold and silver recoveries are 71%.
More information regarding the Santa Fe Mine project's MRE update is included in the NI 43-101 Technical Report titled Santa Fe Project Technical Report with an effective date of October 9, 2024, Report Date: November 27, 2024*.
Qualified Persons
The qualified persons are Kenji Umeno, P.Eng. of Kappes, Cassiday & Associates; Thomas Dyer, P.E. of RESPEC; Trevor Rabb, P.Geo. and Darcy Baker, P.Geo. of Equity Exploration Consultants Ltd. each of whom is an independent "Qualified Person" under NI 43-101. A technical report supporting the results disclosed herein will be published within 45 days. The effective date of the technical report will be December 10, 2024.
About Lahontan Gold Corp.
Lahontan Gold Corp. is a Canadian mine development and mineral exploration company that holds, through its US subsidiaries, four top-tier gold and silver exploration properties in the Walker Lane of mining friendly Nevada. Lahontan's flagship property, the 26.4km2 Santa Fe Mine project, had past production of 356,000 ounces of gold and 784,000 ounces of silver between 1988 and 1995 from open pit mines utilizing heap-leach processing (Nevada Division of Minerals, www.ndomdata.com). The Santa Fe Mine has a Canadian National Instrument 43-101 compliant Indicated Mineral Resource of 1,539,000 oz Au Eq(grading 0.99 g/t Au Eq) and an Inferred Mineral Resource of 411,000 oz Au Eq (grading 0.76 g/t Au Eq), all pit constrained (Au Eq is inclusive of recovery, please see Santa Fe Project Technical Report*). For more information, please visit our website: www.lahontangoldcorp.com
* Please see the Santa Fe Project Technical Report, Authors: Trevor Rabb, P. Geo, Darcy Baker, PhD, P. Geo., and Kenji Umeno, P. Eng., Effective Date: October 9, 2024, Report Date: November 27, 2024. The Technical Report is available on the Company's website and SEDAR+.
On behalf of the Board of Directors
Kimberly Ann
Founder, CEO, President, and Director
FOR FURTHER INFORMATION, PLEASE CONTACT:
Lahontan Gold Corp.
Kimberly Ann
Founder, Chief Executive Officer, President, Director
Phone: 1-530-414-4400
Email: Kimberly.ann@lahontangoldcorp.com
Website: www.lahontangoldcorp.com
Cautionary Note Regarding Forward-Looking Statements:
This news release contains "forward-looking statements" and "forward-looking information" (collectively, "forward-looking statements") within the meaning of Canadian and United States securities legislation, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, are forward-looking statements. Forward-Looking statements in this news release relate to, among other things: the Company's strategic plans; the results of the PEA; the economic potential and merits of the Project; the estimated amount and grade of mineral resources at the Project; precious metals prices; the PEA representing a viable development option for the Santa Fe Mine project ("the Project"); the timing and particulars of the development phases as identified in the PEA; estimates with respect to LOM, operating costs, sustaining capital costs, capex, AISC, cash costs, LOM production, processing plant throughput, NPV and after-tax IRR, payback period, production capacity and other metrics; the estimated economic returns from the Project; mining methods and extraction techniques; the exploration potential of the Project and its inclusion in future mining studies.
These forward-looking statements reflect the Company's current views with respect to future events and are necessarily based upon several assumptions that, while considered reasonable by the Company, are inherently subject to significant operational, business, economic and regulatory uncertainties and contingencies. These assumptions include, among other things: conditions in general economic and financial markets; tonnage to be mined and processed; grades and recoveries; prices for silver and gold remaining as estimated; currency exchange rates remaining as estimated; reclamation estimates; reliability of the updated MRE and the assumptions upon which it is based; future operating costs; prices for energy inputs, labor, materials, supplies and services (including transportation); the availability of skilled labor and no labor related disruptions at any of the Company's operations; no unplanned delays or interruptions in scheduled production; performance of available laboratory and other related services; availability of funds; all necessary permits, licenses and regulatory approvals for operations are received in a timely manner; the ability to secure and maintain title and ownership to properties and the surface rights necessary for operations; and the Company's ability to comply with environmental, health and safety laws. The foregoing list of assumptions is not exhaustive.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. Except for statements of historical fact, this news release contains certain "forward-looking information" within the meaning of applicable securities law. Forward-looking information is frequently characterized by words such as "plan", "expect", "project", "intend", "believe", "anticipate", "estimate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those anticipated in the forward-looking statements including, but not limited to delays or uncertainties with regulatory approvals, including that of the TSXV. There are uncertainties inherent in forward-looking information, including factors beyond the Company's control. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates or opinions should change except as required by law. The reader is cautioned not to place undue reliance on forward-looking statements. Additional information identifying risks and uncertainties that could affect financial results is contained in the Company's filings with Canadian securities regulators, which filings are available at www.sedar.com
Gold Price 2024 Year-End Review
Read on for more on what factors moved the gold price in Q4, followed by a look back at the entire year.
Gold price in Q4
The gold price began Q4 at US$2,660.30, but quickly saw a retraction to US$2,608.40 on October 9. However, the decline didn't last, and gold again rose, setting a new record high of US$2,785.40 on October 30.
The surge upward was fueled by a weaker-than-expected September US consumer price index report, which showed annual inflation of 2.4 percent and monthly inflation of 0.2 percent. These numbers were higher than analysts' forecasts of 2.3 and 0.1 percent, raising expectations that the Fed would cut rates at its November meeting.
Gold was in retreat to start November, dropping to US$2,664 on November 6 after Trump’s victory. The next day, it briefly surged above the US$2,700 mark as the Fed cut interest rates by 25 basis points on November 7.
By November 15, the price of gold had fallen to its quarterly low of US$2,562.50.
The end of the month saw gold leap to US$2,715.80 on November 22. Following this peak, gold entered December below the US$2,700 mark, closing at US$2,660.50 on December 9.
Gold price, Q4 2024.
Chart via Trading Economics.
Geopolitical impacts have been important to gold in Q4.
In addition to Trump's re-election, which has caused turmoil in various forms, on November 17 the US authorized Ukraine to use ATACMS long-range missiles to attack targets deeper into Russian territory. The UK and France mirrored this move, giving Ukraine the green light to use long-range missiles in the ongoing conflict.
Tensions continued to ratchet up in the days following as Russia announced it was lowering the threshold for nuclear retaliation to include conventional attacks from countries backed by nuclear nations. In a demonstration of its capabilities, Russia launched an intermediate-range ballistic missile for the first time on November 21. While the missile appeared only to carry inert warheads, it is capable of delivering both conventional and nuclear armaments.
The threat of a significant escalation has bolstered gold’s appeal as a safe-haven asset and store of value.
How did gold perform for the rest of the year?
Gold price in Q1
Gold set its first record price of the year at US$2,251.37 on March 31.
Central bank buying, notably China's purchase of 22 metric tons of gold in the first two months of the year, supported the price. Turkey, Kazakhstan and India also significantly increased their holdings at the start of the year.
Further momentum came from Chinese wholesale demand, which jumped to 271 metric tons in January, the strongest ever recorded. Investors were turning to the yellow metal as a defense against falling real estate and stock prices. At that time, the country's stocks had lost nearly US$5 trillion in value over the past three years.
Gold price, Q1 2024.
Chart via Trading Economics.
“As central banks continue to be significant buyers and geopolitical risks and global uncertainties drive investors towards the perceived safety of gold, the current environment underscores gold’s importance as a strategic asset for portfolio diversification and risk mitigation. Therefore, while there may have been a perception of western disinterest in gold, recent developments indicate a sustained and broad-based demand for the precious metal,” Joe Cavatoni, market strategist, Americas, told the Investing News Network (INN) in an email at the time.
Gold price in Q2
The gold price saw increasing momentum in Q2, setting a new all-time of US$2,450.05 on May 20.
Gains through the quarter were influenced by strong central bank demand. Investor sentiment toward the yellow metal also shifted, with outflows from western exchange-traded funds starting to slow.
Although European funds still saw significant declines, it wasn’t all bad news — the US-based SPDR Gold Shares (NYSE:GLD), the Sprott Physical Gold Trust (NYSE:PHYS), Ireland’s Royal Mint Responsibly Sourced Physical Gold ETC (LSE:RMAU) and Switzerland’s UBS ETF Gold (SWX:AUUSI) all saw increases.
Gold price, Q2 2024.
Chart via Trading Economics.
In a May interview with INN, Jeff Clark, editor of Paydirt Prospector, noted several other market dynamics that caused the price of gold to rise dramatically. He said the real starting point for the precious metal's gains was the end of February, when the Fed indicated it was expecting three or four rate cuts in 2024.
“All of a sudden, gold was off to the races. It jumped so high that suddenly, you had some short covering that needed to happen then as well. So you had short covering, which means they’re buying. And then you had momentum chasers and traders jumping all in. That was a pretty good spike ... that's what kind of started all of this,” he said.
Gold price in Q3
Gold set another record price during the third quarter, reaching US$2,672.51 on September 26.
The high came just a week after the conclusion of the Fed's September meeting, when it announced a jumbo 50 basis point cut to the federal funds rate. While the People’s Bank of China maintained its pause on gold purchases in the third quarter, it granted several regional banks new import quotas in August.
Gold price, Q3 2024.
Chart via Trading Economics.
David Barrett, CEO of the UK division of global brokerage firm EBC Financial Group, suggested at the time that Fed rate cuts were less of a factor for gold than central bank buying. “I still see the global central bank buying as the main driver — as it has been over the last 15 years. This demand removes supply from the market. They are the ultimate buy-and-hold participants and have been buying massive amounts,” he told INN via email.
The quarter also saw significant merger and acquisition activity, with South Africa-based Gold Fields (NYSE:GFI,JSE:GFI) announcing plans to acquire Canada’s Osisko Mining (TSX:OSK) for C$2.16 billion, and South African gold miner AngloGold Ashanti (NYSE:AU) agreeing to purchase UK-based Centamin (TSX:CEE,LSE:CEY) for US$2.5 billion.
Investor takeaway
Overall, uncertainty has been a key driver for gold in 2024.
Central banks have continued to increase their physical holdings against an increasingly polarized political landscape. The most recent data from the World Gold Council shows that they added 186 metric tons of gold to their coffers during the third quarter, with the National Bank of Poland leading the way with 42 metric tons.
The World Gold Council notes that on a rolling four-quarter basis, central bank buying has slowed to 909 metric tons — that's compared to 1,215 metric tons one year ago.
Investors also began returning to the precious metal throughout 2024 as geopolitical tensions and fragile economies pushed them toward gold as a safe haven to help shield their portfolios from volatility.
With the world’s largest economy set to welcome Trump back to the White House in 2025, there are many unknowns. His economic policies could cause inflation to begin creeping up. In contrast, his foreign policies could create new ripples through global trade and financial markets given that he campaigned on more protectionist policies.
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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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