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Free Money to Drive Gold Stocks in 2021? (NYSE: KGC) (OTC US: GOLHF) (NYSEAmerican: NGD)

Here comes at least another $900 billion.

If Trump and Bernie get their way, it will be significantly more. Not to pass judgement on that, but it does carve out a dent in the US Dollar. And that, in turn, adds rocket fuel to “store of value” assets like gold and Bitcoin.

The catalyst for this debasement is, naturally, the pandemic. We have unleashed trillions to float the economy on a raft of printed money this year. Now, that raft is being further inflated, driving alternatives. Gold moved first, rocketing higher in the spring and summer. Bitcoin has moved (like crazy) over the past 2-3 months. But there may be a great deal of appreciation ahead in these assets, which could drive their producers.

With that in mind, we take a look at some of the most interesting names in the gold mining space, including Kinross Gold Corporation (NYSE: KGC), Delta Resources Ltd (OTC US: GOLHF), and New Gold Inc. (NYSEAmerican: NGD).

 

Kinross Gold Corporation (NYSE: KGC) engages in the acquisition, exploration, and development of gold properties principally in Canada, the United States, the Russian Federation, Brazil, Chile, Ghana, and Mauritania. It is also involved in the extraction and processing of gold-containing ores; reclamation of gold mining properties; and production and sale of silver.

As of December 31, 2019, its proven and probable mineral reserves included approximately 24.3 million ounces of gold, as well as 55.7 million ounces of silver.

Kinross Gold Corporation (NYSE: KGC) recently announced that it has entered into agreements to acquire a 70% interest in the high-quality Peak Gold project in Alaska from Royal Gold, Inc. and Contango ORE, Inc. (OTCQB: CTGO) for total cash consideration of $93.7 million. Kinross will have broad authority to construct and operate the Peak Gold project, with Contango retaining a 30% non-operating minority interest.

According to the release, the Peak Gold project is a relatively high-grade deposit with a large estimated resource base that is expected to commence production in 2024 as a low-cost, open pit mine. The project, which is located approximately 400 kilometers (250 miles) southeast of the Company’s Fort Knox mine, is a low-risk “tuck-in” to supplement Kinross’ existing Alaska operation. Kinross plans to process Peak Gold ore at Fort Knox and utilize the existing mill and infrastructure to benefit both the project and the mine.

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action KGC shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -2% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities.

Kinross Gold Corporation (NYSE: KGC) managed to rope in revenues totaling $1.5B in overall sales during the company’s most recently reported quarterly financial data — a figure that represents a rate of top line growth of 30.1%, as compared to year-ago data in comparable terms. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($1.3B against $1.8B, respectively).

 

Delta Resources Ltd (OTC US: GOLHF) is focused on growing shareholder value through the acquisition of high-potential gold and base-metal projects in Canada, exploring these projects with state-of-the-art methods, and potentially developing these projects into mines.

Delta is currently focused on exploring its high-potential Delta-1 (Eureka) and Delta-2 projects respectively in the Thunder Bay area of Ontario and in the Chibougamau Mining Camp of Quebec while evaluating other projects in Canada deemed to have a strong potential for new discoveries. Delta owns a 100% interest in the Bellechasse-Timmins gold property and deposits located in the Beauce Region of Southeastern Quebec, Canada.

The Bellechasse-Timmins deposit contains a 43-101 compliant gold resource of 171,000 ounces at an average grade of 1.83 g/t gold in the indicated category and an additional 95,000 ounces at an average grade of 1.36 g/t gold in the inferred category. On July 3rd, 2020, Delta announced the sale of the Bellechasse-Timmins project to Yorkton Ventures Inc. for $1.7M payable over a period of 15 months following signing. The non-dilutive influx of capital will be directed on advancing the Delta-1 and Delta-2 projects.

Delta Resources Ltd (OTC US: GOLHF) recently announced that it was granted the necessary encroachment permit to drill-test its Trans Canada Gold target at the Delta-1 Property, 50 kilometres west of Thunder Bay, Ontario.

According to the release, this initial permit, granted by the Ontario Ministry of Transportation (“MTO”), will allow Delta to drill up to 14 drill holes totalling 4,200 metres at any time between January and November 18, 2021. The drill holes will initially be testing the Trans Canada Gold Target over a minimum strike length of 700 metres underneath and south of the highway.

The stock has been a juggernaut, up more than 500% since April. But this may not scratch the surface of what’s possible if its current interests get discounted in the tape.

Delta Resources Ltd (OTC US: GOLHF) had no reported sales in its last quarterly financial data. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($1.7M against $303K).

 

New Gold Inc. (NYSEAmerican: NGD) frames itself as an intermediate gold mining company that engages in the development and operation of mineral properties. It explores for gold, silver, and copper deposits.

The company’s principal operating properties include 100% interests in the Rainy River gold-silver mine located in Ontario, Canada; and New Afton gold-copper mine located in British Columbia, Canada. It also holds 100% interests in the Blackwater gold-silver project located in British Columbia, Canada; and operates the Cerro San Pedro gold-silver mine in Mexico.

New Gold Inc. (NYSEAmerican: NGD) recently reported its Q3 results, including total production of 115,536 gold equivalent (gold eq.) ounces (78,959 ounces of gold, 171,825 ounces of silver, and 18.2 million pounds of copper), which puts it on track to achieve to meet revised production guidance estimates.

“We are very pleased with the results from the Rainy River Mine as the operations met, or exceeded, target levels. Supported by the strong operational performance delivered in the quarter and with all deferred site construction capital substantially complete, the operation is well positioned to deliver on its life of mine plan that includes strong production growth at lower costs along with a significant and corresponding reduction in capital requirements.” stated Renaud Adams, CEO. “Our improved operational performance has allowed New Gold to complete key corporate transactions during the year that supported the restructuring of our balance sheet and strengthened our liquidity position. As we enter the final quarter of the year, we will continue to build on the progress made during the year as we position the Company for the future and deliver free cash flow generation beginning in 2021.”

While this is a clear factor, it has been incorporated into a trading tape characterized by a pretty dominant offer, which hasn’t been the type of action NGD shareholders really want to see. In total, over the past five days, shares of the stock have dropped by roughly -6% on above average trading volume. All in all, not a particularly friendly tape, but one that may ultimately present some new opportunities. Shares of the stock have powered higher over the past month, rallying roughly 16% in that time on strong overall action.

New Gold Inc. (NYSEAmerican: NGD) pulled in sales of $231.6M in its last reported quarterly financials, representing top line growth of 3.1%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($556.2M against $251.8M).

 

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