We recently published a list of 10 Best Gold Royalty and Small-Cap Gold Stocks to Buy. In this article, we are going to look at where Orla Mining Ltd. (NYSEAMERICAN:ORLA) stands against other best gold royalty and small-cap gold stocks to buy.
The U.S. Federal Reserve now anticipates just two interest rate cuts next year, a reduction from the four previously forecasted in September, due to inflation concerns and the potential economic impact of President-elect Donald Trump’s proposed trade tariffs. On November 18, in the immediate aftermath of the Fed’s announcement, the U.S. dollar surged, with the dollar index reaching a two-year high. This rally placed downward pressure on gold prices, which fell 2% to their lowest levels in a month. Traditionally, a stronger dollar and higher U.S. Treasury yields make gold less attractive as an investment. However, analysts suggest that these traditional relationships between gold, the dollar, and interest rates have become less predictable in recent years.
In an interview with CNBC on December 18, Thomas Rupf, Chief Investment Officer and Head of Trading at VP Bank Asia provided detailed insights into the current market conditions and future projections for the U.S. dollar and gold. Rupf acknowledged the resilience of the U.S. dollar and attributed it to the perception of the continued strength of the U.S. economy. However, he also pointed out that the U.S. dollar is currently overvalued and expects the US economy to slow down, which could contribute to a weaker US dollar by the end of next year.
Regarding gold, Rupf is optimistic and noted that the potential slowdown in the US economy and dollar as well as the ongoing trend of de-dollarization are all bullish factors for gold prices. He mentioned that ETF flows, which are still 20% below historical levels, indicate that there is significant room for retail investors to increase their investment in gold ETFs. Rupf concluded by agreeing that gold prices could realistically reach $2,800 to $2,900. He also mentioned the possibility of gold reaching up to $3,000, which he considers the top end of his forecast.
Gold has historically been recognized as a reliable investment, known for its enduring value and resilience against economic uncertainties. This precious metal has been a cornerstone in many diversified investment portfolios, offering a sense of security and stability in times of financial turmoil.
Our Methodology
To compile our list of the 10 best gold royalty and small-cap gold stocks to buy, we used Finviz and Yahoo stock screeners to find the companies that are involved in the production, extraction, processing, financing, or sale of gold and have a market capitalization between $200 million and $10 billion as of December 23. Then we used Insider Monkey’s Hedge Fund database to rank 10 stocks according to the largest number of hedge fund holders, as of Q3 2024. The list is sorted in ascending order of hedge fund sentiment.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
Orla Mining Ltd. (NYSEAMERICAN:ORLA)
Number of Hedge Fund Investors: 16
Market Capitalization as of December 23: $1.79 Billion
Orla Mining Ltd. (NYSEAMERICAN:ORLA) is an intermediate gold mining company that operates the Camino Rojo oxide gold project in Mexico. The company is also developing the South Railroad and open-pit, heap leach gold project in the United States.
Orla Mining Ltd. (NYSEAMERICAN:ORLA) is actively expanding its footprint through strategic acquisition, exploration, and development projects. On November 18, the company announced the acquisition of the Musselwhite Gold Mine in Ontario from Newmont Corporation. The transaction valued at $810 million is set to more than double the company’s annual gold production to over 300,000 ounces and is expected to generate more than $150 million in average annual free cash flow over the next six years. The company intends to aggressively explore the 65,000-hectare concession, including following up on historical drilling that suggests 2 to 3 kilometers of mineralized strike potential beyond the current reserves.
Following the acquisition of Musselwhite Gold Mine, Scotiabank upgraded Orla Mining Ltd. (NYSEAMERICAN:ORLA) to Outperform. Scotiabank analyst Ovais Habib said that the acquisition diversifies the company into a tier 1 jurisdiction, more than doubling annual production without diluting existing shareholders.
Orla Mining Ltd. (NYSEAMERICAN:ORLA) is also making progress on the South Railroad project in Nevada, which encompasses the South Railroad and Pony Creek properties. The company is progressing requirements by the Bureau of Land Management (BLM) before issuing the Notice of Intent and plans to complete all supplemental environmental reports required by the BLM by the end of 2024. The Notice of Intent is anticipated to be published in early 2025, with the targeted Record of Decision, which is the final permitting decision, expected by mid-2026. Following this approval, construction on the South Railroad project is set to begin, with the first gold production anticipated in 2027.
Overall, ORLA ranks 8th on our list of best gold royalty and small-cap gold stocks to buy. While we acknowledge the potential of ORLA to grow, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ORLA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.