$XAU, $SLV, $GLD, $GOLD, $CPNFF, $NEM, $KL, $RIO, $WPM, $CG
After 1 of the most geopolitically charged years in recent memory, gold is now set to soar
Prices began to bounce back in Y 2019, and as trade wars and conflict in the Middle East took hold, investors started racing back to their favorite safe haven asset.
Gold stocks were depressed for years. But as worries of dwindling gold supplies “peak gold” and geopolitical uncertainty took root, investors began to bet on a major gold Bull run.
Goldman Sachs has predicted that there are only 20 years of gold left. And Goldcorp’s Chairman claimed that all major gold reserves have already been found.
And with no sign of a solution in the US-China trade dispute and no end in sight for BREXIT, economic uncertainty is only worsening.
With that in mind, here are some gold stocks to add to your portfolio, as follows;
#1 Barrick Gold Corp. (NYSE:GOLD, TSX:ABX)
The world’s 2nd most profitable and valuable gold miner has had a block buster year, breaking the $30-B market cap mark and attempting a hostile takeover of its major rival Newmont Mining (NYSE:NEM).
The announcement shocked markets, and if it had gone through it would have been a $17.8-B acquisition.
The deal failed in the end though, with the 2 companies agreeing to partner upon a potential find in Nevada, with a 2/3rds share for Barrick. The venture has the potential to unlock nearly $5-B over the next 20 years.
So the biggest name in gold mining is about to get even bigger.
After reporting 4.5-M oz in gold last year, Barrick claimed that Nevada could yield a further 76-M oz, the Northside here is undeniable.
Barrick’s stock is already up 32% YTD, and as gold markets become increasingly Bullish, the results should keep getting better.
It did not matter that the Newmont venture fell through, and with the joint venture in Nevada adding even more value, the good times should keep rolling for Barrick.
#2 Euro Sun (TSE:ESM, OTCMKTS:CPNFF)
It may not be as big a name as Barrick, but Euro Sun has made 1 of the biggest acquisitions of the year.
This ancient Roman gold mine deep in the forests of Romania is ready to regain its historic fame. And Euro Sun Mining Inc. (TSE:ESM, OTCMKTS:CPNFF) is holding the Key to its success.
The scale of this resource is undeniably immense, with the Rovina Mine measuring in as the 2nd biggest gold mine in all of Europe. It has 400-M tonnes of ore, yielding 10.1-M ounces of gold equivalent.
To put that in perspective, the profits from this find are estimated at $550 oz, and that’s with a total haul of $5.5-B over the mine’s lifetime.
It is not just the mine that makes Euro Sun special.
While there are literally 100s of mines scattered across Europe, with many of them containing hundreds of millions of tons of accessible ore, getting a license for any of the ancient mines is near impossible.
Inside the EU, it can be insanely difficult to get the necessary licenses due to a litany of regulations.
Rovina is renowned within gold markets, with Barrick having sank $20 million into the project. But even with the backing of the biggest gold company in the world, the owners could not get the necessary licenses and had to abandon the find. That’s when Euro Sun enter and got the goods.
Euro Sun took its time to get the necessary permits and licenses from the Romanian government, knowing full well that the payoff would be worth it. Finally, in November 2018, it did the impossible and obtained the 1st Romanian mining permit since Y 2003.
The reaction to their success was unanimous, with GMP noting that Rovina has “robust economics and upside…If another ounce is never found, Euro Sun already owns a potentially extremely robust project.”
Cantor Fitz supported the work of GMP when it completed its own estimate in early Y 2019. Their estimate stated that Rovina “carries strong economics on a standalone basis.” After securing this license and the attention of the entire mining industry, the only thing left to do was to wait for the gold markets to soar.
Cantor Fitz short-term target for Euro Sun is 2.10. That’s over a 500% increase from its current price.
But GMP is even more ambitious: they believe Euro Sun is worth $3.00, an increase of over 800%.
The company’s stock rose by 20% on the back of 1 small announcement. And as gold markets get more Bullish and the company continues to develop, it is only going to get better.
Investors are already waiting for opportunities in gold, with the Chinese having put some big money into mining, laying down a cool $1.4 billion to acquire an asset with nearly none of the qualities Rovina can boast.
It might not be long before Euro Sun (TSE:ESM, OTCMKTS:CPNFF) gets targeted by a big investor…and it’s stock would then become solid gold.
It may be a penny stock for now, but that could all change quickly.
#3 Newmont Mining (NYSE:NEM, TSX:NGT)
From fighting off a hostile takeover from Barrick, to acquiring Goldcorp to become the world’s biggest gold miner, Newmont has had a remarkable year.
Newmont made the announcement in January, part of many of M&A deals among the gold miners, taking advantage of depressed valuations.
And while the Newmont-Barrick merger died, the now-$32 billion market cap giant is ready to ride the looming bull run.
Being the biggest in the market is always a positive when it comes to a Bull run, and Newmont is going to exploit its position as much as it can in the near term.
It’s one-third share in the joint venture launched with Barrick in Nevada, a deal that could yield $5-B over 20 years, is yet another source of value for this giant.
In Y 2018, Newmont announced that “first gold” had been produced at its Merian mine in Suriname, South America. That mine contains reserves of a further 1.5-M oz with annual production expected to average between 400,000 and 500,000 ounces in the 1st 4 years.
It’s a great time to be the number one in gold.
#4 Kirkland Lake Gold (NYSE:KL, TSX:KL)
This major gold miner has a market cap of $9-B and has risen 91% in this year alone.
Part of the reason for the climb was that Kirkland posted some huge numbers for last year, reporting 724,000 oz of gold produced and exceeding its Quarterly production record by 28%.
Another advantage Kirkland has is that it is hyper focused. It has lasered in on only Canada and Australia. Its portfolio is low-risk and high-value, one that looks even more attractive with the good news from 2018.
Kirkland has a Zacks ranking of #1. The Zacks Consensus Estimate for earnings in Y 2019 has risen 52%, and project 4-year growth of 47%.
And it doesn’t intend to slow down any time soon.
It plans to expand operations in Canada, sinking more than $100-M into exploration, confident that “peak gold” predictions won’t come to pass.
The company’s Canadian workforce is set to grow by the thousands, once a new shaft is sunk at the Macassa mine.
Look to Kirkland for more exciting news as the year nears its end.
#5 Rio Tinto (NYSE:RIO)
Rio Tinto is 1 of the world’s biggest miners and is also in the gold business.
This mining giant made a huge discovery in February, uncovering what could be its next massive copper-gold mine in Western Australia.
Part of Rio’s $250-M exploration program, things are looking very good for the company.
It will likely be able to scale up its operation quickly, thanks in large part to the company’s ample resources.
While it delayed production on a mine in Mongolia, moving the planned expansion from early 2020 to Q-3 of Y 2021, the Western Australia discovery will help it in the meantime.
Like other gold stocks, Rio Tinto was ticking up this year, but the trade war between the US and China has knocked it down. When gold really starts to roar though, it will be sure to follow suit.
Rio was named the most innovative company according to Boston Consulting Group, thanks in part to its high-tech mine in Pilbara, Western Australia.
Wheaton Precious Metals Corp. (NYSE:WPM, TSX:WPM)
Wheaton is a company with its hands in operations all around the world. As one of the largest ‘streaming’ companies on the planet, Wheaton has agreements with 19 operating mines and 9 projects still in development. Its unique business model allows it to leverage price increases in the precious metals sector, as well as provide a quality dividend yield for its investors.
Recently, Wheaton sealed a deal with Hudbay Minerals Inc. relating to its Rosemont project. For an initial payment of $230-M, Wheaton is entitled to 100% of payable gold and silver at a price of $450 oz and $3.90 oz respectively.
Wheaton’s President and Chief Executive Officer explained, “With their most recent successful construction of the Constancia mine in Peru, the Hudbay team has proven themselves to be strong and responsible mine developers, and we are excited about the same team moving this project into production. Rosemont is an ideal fit for Wheaton’s portfolio of high-quality assets, and when it is in production, should add well over fifty thousand gold equivalent ounces to our already growing production profile.”
Centerra Gold Inc. (TSX:CG)
Centerra Gold is a Canada-based gold miner with flagship assets, the Mount Milligan Mine and the Kumtor Mine which are located in Canada and the Kyrgyz Republic respectively. It also owns the Öksüt Gold Mine in Turkey, making it the single-largest North American gold company operating in Asia, with over 22 years of experience in the region.
Centerra’s biggest selling points are its strong balance sheets. For Y 2018, the company reported over $100-M in net earnings, generating over $217-M from cash operations, exceeding many analysts expectations.
The President and CEO of Centerra stated, “As a result of the strong 4th Quarter operating performance at both operations, the Company exceeded its overall 2018 production and cost guidance producing 729,556 oz of gold at an all-in sustaining cost on a by-product basis of $754 oz sold, beating the low-end of our all-in-sustaining cost guidance for the year.“
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