Today we’ve dug up some junior gold stocks that are benefiting from the U.S. Federal Reserve’s hint at potentially cutting interest rates
SmallCapPower | June 21, 2019: After the U.S. Federal Reserve hinted at future cuts in the federal funds interest rate if the economic outlook does not improve in the coming months, the S&P 500 hit a new intraday record as stocks began to rally. With this news of lower interest rates, investors have started to look for returns from different assets, which has led to gold increasing by 2.7%. On June 20, 2019, the spot gold price hit ~US1,385/oz, which is the highest it has been in the five years since March 17, 2014, at ~US$1,386/oz. Gold prices have increased $80/oz so far in the month of June. Today we have unearthed four TSX/TSXV listed junior gold stocks that have experienced increased price and volume momentum, with a 30-day share price return greater than 30%. Price and volume momentum are a good indicator of bullishness, as increased share prices on larger volumes show heightened investor interest in a stock.
*Share prices as at close June 19, 2019, data obtained from S&P Capital IQ
Eldorado Gold Corporation (TSX:ELD) – $6.00
Metals and Mining
Eldorado Gold is a gold and base metals producer with mining, development, and exploration operations in Turkey, Canada, Greece, Romania, Serbia, and Brazil. In Turkey, the Company operates two gold mines: 1) Kışladağ (open pit); and 2) Efemçukuru (underground operation). In Greece, it operates two polymetallic mines: 1) Olympias; and 2) Stratoni (underground). In Quebec, Canada it operates the Lamaque underground gold mine. And in Brazil, the Company operates Vila Nova, an open pit, iron ore mine. Eldorado’s Q1/19 gold production was 82,977 ounces, which is 7.16% lower than its Q1/18 gold production of 89,374 ounces. In Q1/19 the Company had a total cash cost $652/oz, and an all-in sustaining cost $1,132/oz.
- Market Cap: $950.2 Million
- 30 Day Return: 36.4%
- 30-Day Average Trading Volume (1,000): 1,051
- 90-Day Average Trading Volume (1,000): 923
SEMAFO Inc. (TSX:SMF) – $5.06
Metals and Mining
SEMAFO is a Canada-based, intermediate gold producer. The Company builds and operates two mines in West Africa: the Boungou (open pit) and Mana Mines, both located in Burkina Faso. The Company had gold production of 102,400 ounces in Q1/19. This is up 125% from Q1/18’s 45,500 ounces. In Q1/19, the Company had a consolidated gold production cost between $390-$420/oz and an all-in-sustaining cost ($/oz) between $685-$735/oz. On June 3, 2019, the Company announced results from its ongoing exploration program at Bantou. The exploration resulted in a new significant gold discovery called Bantou Nord from its 43 hole (7,782 meter) samples. The drill results included 128 meters grading 2.54 g/t Au, but there were several other intersections of +/- 100-meter lengths that had grades ranging from 1.1 g/t Au to 1.5 g/t Au. There were also a few higher-grade intervals that had samples that returned 6.50 g/t Au over 26 metres. This suggests there is potential for outlining gold-enriched areas within the range.
- Market Cap: $1,685.9 Million
- 30 Day Return: 34.1%
- 30-Day Average Trading Volume (1,000): 1,117
- 90-Day Average Trading Volume (1,000): 805
Gran Colombia Gold (TSX:GCM) – $4.51
Metals and Mining
Gran Colombia is based in Canada and is a mid-tier gold producer that focuses mainly on mining operations in Colombia. Currently, the Company is the largest underground gold and silver producer and has multiple underground mines in operation at its Segovia and Marmato operations. The Company had a record-breaking Q1/19, with total gold production of 60,601 ounces, up 15% from Q1/18. In Q1/19, the Company had total cash costs of $621/oz, and all-in-sustaining costs of $832/oz. On June 18, 2019 the Company announced that it produced 18,528 ounces of gold in May. This brings the total for the first five months of 2019 to 99,601 ounces. This is up 14% from the first five months of 2018.
- Market Cap: $217.8 Million
- 30 Day Return: 32.7%
- 30-Day Average Trading Volume (1,000): 164
- 90-Day Average Trading Volume (1,000): 149
Equinox Gold Corp. (TSXV:EQX) – $1.35
Metals and Mining
Equinox Gold is a Canada-based company that focuses on the acquisition, exploration and development of gold, copper, and silver deposits. The Company has a 100%-owned producing open pit Mesquite Gold Mine in California, USA, a 100%-owned commissioning-stage open pit Aurizona Gold Mine in Maranhão, Brazil, and a 100%-owned pre-feasibility stage heap leach Castle Mountain Gold Mine in California, USA. The Company produced 25,310 ounces of gold at Mesquite in Q1/19. As well in Q1/19, the Company had a total cash cost of $766/oz, and an all-in-sustaining cost of $873/oz. On May 22, 2019, Equinox Gold announced it had sold its Elk Gold Property in B.C, Canada to Bayshore Minerals, a private British Columbia-based mining company for: 1) $1 Million in cash on the closing of the sale; and 2) $9 Million in a first ranking secured promissory note, payable in annual installments of $3 Million, which will begin two years after the close.
- Market Cap: $746.8 Million
- 30 Day Return: 31.8%
- 30-Day Average Trading Volume (1,000): 1,499
- 90-Day Average Trading Volume (1,000): 795
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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