It’s not hard to find reasons to like gold right now. First off, the yellow metal has outperformed all other major assets so far in 2020. Here is the year-to-date scoreboard as of this weekend: Gold +23.7%, Government bonds +6.3%, Investment Grade bonds +5.9%, Global equities +3.7%, High-Yield bonds +1.4%, Cash +0.5%, US dollar -2.9%, Oil -36.4%.
The important point to note is this: the reason for that outperformance is a combination of uncertainty and the $21 trillion in global fiscal and monetary stimulus we have already seen. Now, the European Central Bank is flirting with a move to follow the US Federal Reserve into an “Average Inflation Targeting” paradigm, and the democrats are pushing for another few trillion in thin-air-cash, with a growing lead in the polls that suggests they will eventually prevail.
At the same time, the root cause of the dilemma is the pandemic health crisis – and case numbers are starting to ramp up again in the northern hemisphere as temperatures fall.
If we throw into that mix perhaps the most polarizing and contentious election in US history, we have a recipe for potential continued capital flight into gold into year-end.
With that in mind, we take a look at some of the more interesting stocks in the gold mining space, including: Yamana Gold Inc. (NYSE: AUY), JNC Resources Inc. (OTC: JNCCF) (CSE: JNC), and Barrick Gold Corp (NYSE: GOLD).
Yamana Gold Inc. (NYSE: AUY) bills itself as a Canadian-based precious metals producer with significant gold and silver production, development stage properties, exploration properties, and land positions throughout the Americas, including Canada, Brazil, Chile and Argentina.
Yamana Gold plans to continue to build on this base through expansion and optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus in the Americas.
Yamana Gold Inc. (NYSE: AUY) most recently announced that the Financial Conduct Authority has approved its Prospectus, which includes a Competent Person’s Report, in support of its intention to list on the London Stock Exchange. Application has been approved for admission of Yamana Gold’s common shares to the Standard Listing segment of the Official List of the FCA and to the LSE for trading on its Main Market for listed securities. According to the company, the stock will trading in London today (Tuesday, October 13, 2020).
Daniel Racine, President and Chief Executive Officer of Yamana Gold, commented, “We are excited to begin trading on the London Stock Exchange and offer UK and European investors exposure to a pure-play senior gold producer with a high-quality asset portfolio in mining-friendly jurisdictions in the Americas, offering a unique investment opportunity.”
And the stock has been acting well over recent days, up something like 4% in that time.
Yamana Gold Inc (NYSE: AUY) pulled in sales of $420.3M in its last reported quarterly financials, representing top line growth of -32.2%. In addition, the company is battling some balance sheet hurdles, with cash levels struggling to keep up with current liabilities ($442.4M against $655.5M, respectively).
JNC Resources Inc (OTC: JNCCF) (CSE: JNC) is a North American based mining exploration company. The company’s goal is to develop under-explored properties and benefit from deal flow generated by its strategic partnership and growth opportunities.
Moreover, JNC Resources Inc. engages in the exploration of mineral resources in North America. JNC also acquired 100% control and interest in the Imperial Project in Nevada earlier this year. The Imperial Property is located in Esmeralda County, Nevada, which has been a prolific mining area in the state.
JNC Resources Inc (OTC: JNCCF) most recently announced the results of a rock sampling program at its Imperial Project, which is located 18 miles northeast of one of the largest gold producers in Goldfield, Nevada in the Silver Peak District.
“We are extremely pleased with the rock samples at our Imperial Project in Nevada. With grades as high as 16.65 g/t we are now ready to formulate our fully funded, permit ready, drill program anticipated for Q4 2020. The test grids have identified large and open gold in soil anomalies that further support the potential for large and continuous gold bearing vein targets through the area” stated CEO, Michael Mulberry.
The stock is still in price discovery mode ahead of liquidity growth, but investors willing to get involved over the summer have already seen significant upside. As the company gains more traction toward marketable mining output, we would expect this one to become tough to catch comfortably, which is why it’s worth a look despite the light tape.
JNC Resources Inc (OTC: JNCCF) is a junior miner that has yet to begin initial revenue growth. However, the company has promising assets, which was further highlighted by its sampling results this month in Nevada. As the gold space potentially heats up into year-end, JNC could be an interesting stock to have on the radar.
Barrick Gold Corp (NYSE: GOLD) is one of the biggest and most dominant players in the space, with a market cap nearing $50 billion. The company engages in the exploration, mine development, production, and sale of gold and copper properties. It has ownership interests in producing gold mines that are located in Argentina, Canada, Ivory Coast, the Democratic Republic of Congo, Dominican Republic, Mali, Papua New Guinea, Tanzania, and the United States.
The company also has ownership interests in producing copper mines located in Chile, Saudi Arabia, and Zambia; and various other projects located throughout the Americas and Africa.
Barrick Gold Corp (NYSE: GOLD) recently announced it has completed its transaction pursuant to which Skeena Resources Ltd. exercised its option to acquire the Eskay Creek project and Barrick waived its back-in right on the Eskay Creek project.
As previously announced, consideration for the transaction consists of: (i) the issuance by Skeena of 22,500,000 units, with each Unit comprising one common share of Skeena and one half of a warrant, with each whole warrant entitling Barrick to purchase one additional common share of Skeena at an exercise price of C$2.70 each until the second anniversary of the closing date; (ii) the grant of a 1% NSR royalty on the entire Eskay Creek land package; and (iii) a contingent payment of C$15 million payable during a 24-month period after closing.
Even with that news, the action hasn’t really heated up in the stock, with shares moving net sideways over the past week.
Barrick Gold Corp (NYSE: GOLD) pulled in sales of $4.2B in its last reported quarterly financials, representing top line growth of 51.2%. In addition, the company has a strong balance sheet, with cash levels far exceeding current liabilities ($5.1B against $2.5B).
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