Goldman Sachs just said that gold has the highest potential for a near-term price increase, as noted by LiveMint.com. “Imminent Fed rate cuts are poised to bring Western capital back into the gold market, a component largely absent of the sharp gold rally observed in the last two years,” the brokerage firm said in its note Go for Gold, they added. All of which is also helping to fuel upside in gold stocks including Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF), Barrick Gold (NYSE: GOLD) (TSX: ABX), Royal Gold Inc. (NASDAQ: RGLD), Franco Nevada (NYSE: FNV) (TSX: FNV), and Newmont Corp. (NYSE: NEM) (TSX: NGT). The firm also raised its price target on gold prices to $2,700 by early 2025.
Other analysts, including those at Citi have a $3,000 price target on gold over the next 18 months, especially with Middle East tension and the Federal Reserve. Bank of America also said gold could also test $3,000 in the next 12 to 18 months.
Look at Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF)
Calibre Mining Corp. announced partial ore control reverse circulation infill drill results from the Marathon Pit, one of three open pits comprising the Valentine Gold Mine in Newfoundland & Labrador, Canada. The current 14-year life of mine plan, which includes the Leprechaun, Berry and Marathon open pits, hosts 2022 Mineral Reserves of 51.6 million tonnes grading 1.62 g/t gold containing 2.7 million ounces1. At the Marathon pit, the Company drilled 196 RC holes totaling 4,915 metres in three benches slated for mining in 2025. When comparing approximately the same tonnage to the 2022 Mineral Reserve model over three planned mining benches, the Ore Control Block model yields significantly more gold than the 2022 Mineral Reserve model due to 47% higher grades. These results coupled with the Leprechaun ore control results (see news release dated February 14, 2024) substantiate the 2022 Mineral Reserve and increase confidence.
Darren Hall, President and Chief Executive Officer of Calibre, stated: “The results from the initial Marathon pit ore control drilling are very encouraging with 47% higher gold grades resulting in 44% additional ounces vs the 2022 Mineral Reserve in the same area. Given these results, and construction at 77%, our confidence continues to increase as we responsibly advance towards first gold at Valentine during Q2, 2025.
Diamond drilling is also underway as part of our expanded, 100,000 metre program (see news release dated July 15, 2024) with three rigs targeting new gold mineralization along the Valentine Lake Shear Zone. We look forward to the first results expected in the coming weeks as we remain excited about the vast potential to yield further significant gold discoveries within the Valentine land package.”
Other related developments from around the markets include:
Barrick Gold announced the declaration of a dividend of $0.10 per share for the second quarter of 2024. The dividend is consistent with the Company’s Performance Dividend Policy announced at the start of 2022. The Q2 2024 dividend will be paid on September 16, 2024 to shareholders of record at the close of business on August 30, 2024. In addition to the dividend, Barrick repurchased 2.95 million shares during the second quarter under the $1 billion share buyback program that was announced in February 2024.
Royal Gold reported net income of $81.2 million, or $1.23 per share, for the quarter ended June 30, 2024, on revenue of $174.1 million and operating cash flow of $113.5 million. Adjusted net income was $82.6 million, or $1.25 per share. “The second quarter of 2024 was an excellent quarter for Royal Gold, with near-record revenue, and increased operating cash flow and earnings. After minor adjustments, earnings for the quarter were a quarterly record,” commented Bill Heissenbuttel, President and CEO of Royal Gold. “Our portfolio performed well and benefited from the record high quarterly gold price, and we took advantage of the strong results to continue to pay down our debt. Including a further repayment in July, we have repaid $225 million of debt so far in 2024 and have now returned to a net cash position with total available liquidity of approximately $1 billion.”
Franco Nevada announced that its wholly-owned subsidiary, Franco-Nevada (Barbados) Corporation has acquired a gold stream from SolGold plc with reference to production from the Cascabel project located in Ecuador. FNB has partnered with Osisko Gold Royalties Ltd.’s subsidiary, Osisko Bermuda Limited, to provide a syndicated financing package on a 70%/30% basis. FNB will provide a total of $525 million and Osisko a total of $225 million of funding for a total $750 million. FNB will provide $70 million and Osisko $30 million for a total of $100 million in pre-construction funding available as three equal sized staged payments. The first tranche will be funded at closing with two further tranches, subject to development milestones.
Newmont announced second quarter 2024 results and declared a second quarter dividend of $0.25 per share. “Newmont delivered a solid second quarter, producing 2.1 million gold equivalent ounces and generating $594 million in free cash flow,” said Tom Palmer, Newmont’s President and Chief Executive Officer. “We continued to advance our divestiture program and, to date, have announced $527 million in proceeds this year. With this momentum, we completed $250 million in share repurchases and repaid $250 million in debt. As we head into the second half of the year, we remain confident in our ability to continue executing on shareholder returns, meet our full year guidance and deliver on our commitments.”
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