This week we saw an epic move in gold stocks. Thanks to more fears surrounding the mounting coronavirus cases around the globe, gold prices reached 7-year highs on Monday. In proper order, plenty of top gold stocks followed suit. Something to be aware of is that when the stock market, in general, takes as big a dip as it did, gold tends to surge.
This morning we’re seeing more optimism in stocks, overall. While this may be due to “subsided concerns over the virus” we can’t ignore the long-term ramifications. Let’s not forget that almost all of China was shut down during the first part of the year. We also saw companies like Apple shut down entire factories along with their downstream suppliers. Ans while COVID-19 might not be the boogieman for the market on Tuesday, down the line, the real outcome of the true fallout could be realized during the next few quarters.
When we see things like this, it obviously raises concern and investors flock to gold stocks. Besides this global epidemic, we’ve also got the same economic framework in place. This includes low rates with threats of even lower rates this year. In addition, China and the U.S. are no closer to a formal trade deal now than they were a few months ago. Meanwhile, global economic figures still suggest a slowdown on a worldwide scale.
Corporate debt remains at or near record levels and the likelihood of more corporate buybacks to drive the market could be slim as it stands now. So, when you consider a bigger picture beyond concerns over a virus, it paints a picture that could mean it’s time to put together a strong list of gold stocks to watch right now.
Top Gold Stocks: IMC International Mining
IMC International Mining (IMCX – Free Report)(IMIMF) has managed to capture the market’s attention this year. After starting things off around $0.25CAD, readers of GoldStocks.com have watched as this junior gold stock has jumped 100% at times. It’s also currently up 86% for the year, as of its February 24th close. Beyond gold prices helping to drive the market, IMC has also been busy building out a global footprint and leadership team to match.
Earlier this month, the company inked a letter of intent for its next acquisition. This is for Thane Minerals, which owns the Cathedral Project in British Columbia, Canada. Located in the Quesnel Terrane, the region has shown a rich history of mineralization. How rich? The Quesnel Terrane hosts past and planned production of 50 billion pounds of copper, 28 million ounces of gold, and has 16 producing and development projects. As the company waits to finalize the multi-million dollar deal, it has also begun positioning key leadership with both management and its board.
This week the company appointed David Charlton as CFO. In addition, as part of the proposed acquisition, IMC brings on mining industry vet, Greg Hawkins, MSc, PGeo to its board. Prior to any acquisitions, his ventures collectively have accounted for over $2.1 billion in market cap at the companies’ respective peaks. And as for his prior endeavors, many were acquired for millions and even billions of dollars in some cases (more on Greg Hawkins).
Top Gold Stocks: New Gold Inc.
New Gold Inc. (NGD – Free Report) was one of the gold stocks that traded a bit sideways on Monday. This was while most others jumped higher during regular market hours. However, as the week as progressed, New Gold stock has continued higher. This move comes after the company’s most recent update.
New Gold announced a strategic partnership with Ontario Teachers’ Pension Plan. To fully understand the scope of this, we need to look at the finer details. This deal will see the Pension Plan acquire a 46% free cash flow interest in New Gold’s New Afton mine. It will also have an option to convert the interest into a 46% joint venture interest in 4 years or remain as free cash flow at a reduced rate.
So those are the specifics. Looking at the bigger picture, this deal could build a bit more confidence in the company based on the market’s reaction. Upfront cash proceeds for the deal will be $300 million upon closing. Meanwhile, New Gold will retain full operating control over New Afton during development. Shares jumped to more than $1 a share during premarket trading on Tuesday.
Renaud Adams, President and Chief Executive Officer of New Gold, said, “Ontario Teachers’ is known to conduct in-depth due diligence and partner with high quality management teams that share its values of integrity and operational excellence. We look forward to our partnership with Ontario Teachers’ as we continue our mission to turn New Gold into Canada’s leading intermediate diversified gold producer.”
Top Gold Stocks: Harmony Gold
Next, Harmony Gold (HMY – Free Report) has seen a surge in price this year. On February 24, the gold stock reached fresh highs of $7.90. This is a level Harmony gold stock hasn’t seen since 2013. Much of the attention on the company has come following the latest deal with AngloGold (AU – Free Report).
The company has targeted AngloGold’s remaining South African assets to expand Harmony’s global footprint. The terms of the deal are still being finalized according to reports from Bloomberg. Some reports have cited that the amounts involved include $200-million upfront in cash, with deferred payments that could, over the course of several years, reach $470-million. While this isn’t a monstrous deal, it could be a big event for South Africa’s mining industry.
“The acquisition… enhances Harmony’s near-term production by adding annual gold production of approximately 350,000oz per annum; increases Harmony’s South African reserves by 8.27 million ounces (excluding Mponeng below infrastructure reserves) and improves Harmony’s portfolio mix between surface and underground operations,” Harmony said.
Top Gold Stocks: Barrick Gold
Finally, Barrick Gold stock (GOLD – Free Report) has been on an outstanding breakout move this year. After beginning 2020 trading around $18.70, the gold stock has managed to rally to highs it hasn’t seen since 2016. On Monday, Barrick Gold stock jumped to premarket highs of $22.79 as the price of gold surged.
While Tuesday’s pre-market has seen some consolidation, one of the world’s largest gold miners continues to turn heads. This month, Barrick Gold and Newmont Corp (NEM – Free Report) said the join mining ventures in Nevada approved the conversion of a coal-fired plant into natural gas. Since miners have been viewed at for their environmental impact, this is the latest in a series of changes to bolster environmental responsibilities.
The Nevada venture may also consider other means of power as well. This includes a solar facility for the mining development. Needless to say, the shares of both companies have benefited this year. Barrick gold stock has climbed by more than 20%. Newmont has enjoyed a more modest 11% gain as of its 2020 high of $41.16. It should also be noted that before the opening bell on Monday, shares were trading above $50 for a short period.
Disclaimer: GoldStocks.com is owned and operated by Midam Ventures, LLC. Pursuant to an agreement between Midam Ventures LLC and IMC International Mining Corp.(CSE: IMCX), Midam has been paid $200,000 for a period from January 7, 2020, to February 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to March 14, 2020. We may buy or sell additional shares of IMC International Mining Corp.(CSE: IMCX) in the open market at any time, including before, during or after the Website and Information, to provide public dissemination of favorable Information about IMC International Mining Corp. (CSE: IMCX). Click for full disclaimer.
Source: GoldStocks.com
(February 25, 2020 - 8:42 AM EST)
