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CARBONXT Launches a Non-Renounceable Pro-Rata Entitlement Offer and Placement to Raise up to $2.94M
Key terms of the Offer
The Offer will provide eligible Carbonxt shareholders the opportunity to apply for one new fully paid ordinary share (New Share) for every 9 existing fully paid ordinary shares (Shares) held as at 7.00pm (Sydney time) on Friday, 8 December 2023 (Record Date), at an offer price of $0.06 per New Share (Offer Price) (together the Entitlement).
It is anticipated that up to 30,588,764 New Shares may be issued pursuant to the Offer, which would raise approximately $1.84 million before expenses of the Offer.
The Offer is fully underwritten by Chaleyer Holdings Pty Ltd.
The Company will use the proceeds raised under the Offer to:
- provide funding to the Company for the development of the Kentucky Facility; and
- provide working capital to the Company generally (including to fund the costs of the Offer).
The Offer price represents:
- a 7.7% discount to the last closing price of $0.065 on 1 December 2023;
- a 11.4% discount to the 10 trading day Volume Weighted Average Price (VWAP) up to and including 1 December 2023.
The Offer is open to Carbonxt shareholders with registered addresses in Australia and New Zealand as at the Record Date. Shareholders at the Record Date without a registered address outside Australia and New Zealand will not be eligible to participate in the Offer.
Existing holders of options and warrants will not be able to participate in the Offer unless they exercise their options and become a registered holder of Shares (upon exercising their options) prior to the Record Date.
The Offer will include a top-up facility that allows eligible shareholders to apply for additional New Shares in excess of their Entitlements, to the extent that there are sufficient amount of New Shares not taken up by other Eligible Shareholders.
The New Shares issued pursuant to the Offer will rank equally with the existing issued Shares of the Company and are expected to be quoted on the ASX.
More information regarding the Offer is set out in the Offer documents, which will be despatched to eligible shareholders in accordance with the timetable set out below.
The Offer documents will be accessible today from the ASX and Carbonxt's website, www.asx.com.au and www.cglimited.com respectively.
Click here for the full ASX Release
This article includes content from Carbonxt Group, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here .
Carbonxt Group Limited (ASX: CG1) – Trading Halt
Description
The securities of Carbonxt Group Limited (‘CG1’) will be placed in trading halt at the request of CG1, pending it releasing an announcement. Unless ASX decides otherwise, the securities will remain in trading halt until the earlier of the commencement of normal trading on Wednesday, 6 December 2023 or when the announcement is released to the market.
Justin Nelson
Principal Adviser, Listings Compliance
Click here for the full ASX Release
This article includes content from Carbonxt Group, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here .
Appointment of Ian Rodger as CEO
Jindalee Lithium Limited
(ASX:JLL)
(Jindalee, the Company) is pleased to announce the appointment of Ian Rodger as Chief Executive Officer (CEO).
- Experienced mining business executive Ian Rodger appointed Chief Executive Officer of Jindalee Lithium
- Management strengthened for the Company’s growth phase towards Pre-Feasibility Study delivery
APPOINTMENT OF CHIEF EXECUTIVE OFFICER
Mr Rodger is a qualified Mining Business Executive with almost 15 years of experience in various roles including as a Mining Engineer for Rio Tinto across two large greenfield mine developments, before successfully transitioning into mining corporate finance where he held Executive and Director positions at RFC Ambrian overseeing origination and management of numerous mandates across a range of corporate advisory roles.
In his most recent role as Project Director for Oz Minerals (ASX: OZL), Mr Rodger made significant contributions to successfully define the value potential of the West Musgrave Nickel/Copper Province through the delivery of a portfolio of growth studies. Most notably, he led technical, market and partnership development workstreams, successfully confirming value potential for producing an intermediate Nickel product for the battery value chain.
Mr Rodger holds a Bachelor of Mining Engineering from the University of Queensland, a Masters of Mineral Economics from Curtin University and is also a graduate of the Australian Institute of Company Directors and member of the Australasian Institute of Mining and Metallurgy.
Upon Mr Rodger’s commencement with the Company, which is expected to occur in mid-January 2024, Mr Lindsay Dudfield will retire as Interim CEO, remaining on the Board of Jindalee as an executive director for a transitional period. The Board thanks Mr Dudfield for his efforts in the role of CEO since the spin-out of the Company’s Australian assets in January 2023.
Jindalee’s Chairman Mr Mannolini said:
”I am delighted that Ian has agreed to lead Jindalee through the next stage of its development. Ian brings experience and expertise to the role which will greatly assist the Company as we progress towards delivery of a pre-feasibility study on the McDermitt Lithium Project in Oregon USA.
Notwithstanding some short-term challenges created by volatility in lithium prices, we remain confident that McDermitt will, in time, find its place as a reliable, long-term supplier of lithium to the rapidly growing electric vehicle industry in the United States.”
Mr Rodger said:
“I am thrilled to take the helm at Jindalee Lithium, especially as we propel the McDermitt Project forward. The team’s transformation of an early-stage acquisition into a globally significant lithium Mineral Resource, with 21.5Mt Lithium Carbonate Equivalent (LCE)1, is truly commendable. As we move towards delivering the PFS in 2024, I'm eager to collaborate with the Jindalee team and our stakeholders to fully realise the strategic value of this project.”
A summary of the key terms of Mr Rodgers’ contract, as required by Listing Rule 3.16.4, is attached as Annexure A.
RESIGNATION OF JOINT COMPANY SECRETARY
Jindalee also advises that Ms Jessamyn Lyons has resigned from the role of Joint Company Secretary. Ms Carly Terzanidis remains in the role of Company Secretary to the Company. The Board sincerely thanks Ms Lyons for her efforts during the preceding 12 months.
Click here for the full ASX Release
This article includes content from Jindalee Resources Limited, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer here .
Free Investor Report
2023 Nickel Outlook: Australia Edition (Updated!)
Find out what is in store for nickel in 2023!
The Investing News Network (INN) spoke with analysts, market watchers and insiders about which trends will impact nickel in the year ahead.
✓ Trends ✓ Forecasts ✓ Top Stocks
Table of Contents:
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A Sneak Peek At What The Insiders Are Saying
“We see (nickel) prices hovering between US$20,000 and US$20,500 (per metric ton) over the first two quarters of 2023 before gradually increasing to US$21,000 in 3Q and US$22,000 in 4Q as the global growth outlook starts to improve.”
— Ewa Manthey, ING
“(EVs now) represent a big percentage of nickel demand, and they will continue to rise going forward.”
— Rodney Hooper, RK Equity
“The resilience of the Chinese economy and the country’s handling of new COVID-19 outbreaks are key factors to watch. In the long run, the rise of EVs bodes well for demand, as nickel is an important component in lithium-ion batteries.”
— FocusEconomics
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The Investing News Network is a growing network of authoritative publications delivering independent, unbiased news and education for investors. We deliver knowledgeable, carefully curated coverage of a variety of markets including gold, cannabis, biotech and many others. This means you read nothing but the best from the entire world of investing advice, and never have to waste your valuable time doing hours, days or weeks of research yourself.
At the same time, not a single word of the content we choose for you is paid for by any company or investment advisor: We choose our content based solely on its informational and educational value to you, the investor.
So if you are looking for a way to diversify your portfolio amidst political and financial instability, this is the place to start. Right now.
2023 Nickel Outlook: Australia Edition
Table of Contents
Nickel Price 2022 Year-End Review
Nickel Price Forecast: Top Trends That Will Impact Nickel in 2023
Nickel Price Update: Q1 2023 in Review
Nickel Price 2022 Year-End Review
Click here
to read the previous nickel price update.
After climbing to a historic high in the first quarter of the year, surpassing US$100,000 per metric ton (MT), nickel retreated substantially to trade in the US$20,000 range for most of 2022.
The price surge resulted in a suspension of trading on the London Metal Exchange (LME) in early March. At the same time, the Russia-Ukraine war put pressure on prices, while all eyes remained on supply coming online from Indonesia.
For investors interested in nickel, here the Investing News Network (INN) looks back at nickel trends for 2022, including supply and demand dynamics, how the metal performed and what analysts said quarter by quarter.
What were the main factors that impacted the nickel market in 2022?
Nickel price in Q1 : LME meltdown hits the sector
After finishing 2021 trading above the US$20,000 threshold, nickel prices hit their highest level in a decade in mid-January as stockpiles dwindled and potential demand from the electric vehicle (EV) sector supported prices.
The base metal continued to trade higher in February, reaching another milestone as it surpassed the US$25,000 level, partially due to uncertainty hitting markets from Russia’s invasion of Ukraine.
Russia is responsible for 9 percent of global nickel output and 15 percent of Class I nickel supply — on which Europe heavily relies.
“If we do see sanctions placed on metal exports or Russian producers, there is very little alternative supply that could feed Europe in the near to medium term,” Natalie Scott-Gray of StoneX told INN. “This is particularly true for Class I nickel, which would have a direct impact on the ability for Europe to maintain EV production guidance for this year.”
But nickel’s price rise during the first quarter was far from over. On March 8, nickel steeply spiked to hit a record level of US$100,000 before the LME decided to suspend trading. “Fundamentals, though supportive of stronger prices, do not justify this frenzy,” Wenyu Yao, senior analyst at ING, said in a note on March 8. “It remains to be seen how this crisis ends. However, the market has long been faced with structural issues.”
Nickel's price performance year-to-date.
Chart via the London Metal Exchange .
The largest-ever move seen on the LME was attributed to the massive short position held by Chinese tycoon Xiang Guangda, who controls the world’s largest nickel producer, Tsingshan Holding Group; he was facing billions of dollars in mark-to-market losses.
The 145-year-old exchange resumed trading, although not without some hiccups , with UK regulators planning to launch a review of the “disorderly market” in nickel contracts in March.
“We expect the LME nickel price to remain volatile in the near term, as the global nickel market finds equilibrium following the price spike and subsequent events,” Jason Sappor, senior research analyst with S&P Global Market Intelligence, told INN back in March.
Looking over to nickel demand, the market was already seeing less need within China for stainless steel and EVs, and any further extension of COVID-19 lockdown measures in the Asian country was expected to exacerbate the situation.
“A prolonged (Russia-Ukraine) war will also hurt the demand profile within Europe for nickel, in addition to stretching out supply chain pain given elevated freight rates,” Scott-Gray said earlier in 2022.
At the end of the quarter, nickel prices were trading above US$30,000.
Nickel price in Q2 : Prices fall sharply
With global economic recession fears increasing, nickel prices fell throughout Q2, recording three consecutive monthly losses.
“Although the LME nickel 3-month price has been trending lower since nickel trading on the LME restarted mid-March, the price is still up 7.9 percent since end-2021, finding support from the continued drawdown in Class 1 nickel stocks at exchange warehouses,” Sappor said at the time in a report.
Speaking about nickel in Q2, Sean Mulshaw of Wood Mackenzie said he expected prices to retreat a little faster than they did.
“We are now broadly back where we started pre-LME trading halt,” he told INN in late June. “We expect a downward trend in nickel prices over the rest of this year and, given where we are now, we could be heading below US$22,000 in Q3.”
Commenting on demand from China in the second quarter, Mulshaw said it was weaker than expected on the back of the COVID-19 outbreak. But even now, as restrictions are easing, the rebound is not as strong as forecast.
“Stainless steel production rates have been falling since March, and this will continue at least through July,” he explained. “Generally, with nickel prices falling, and therefore stainless prices, stainless customers have become cautious, not wanting to buy a product that then loses value. So orders have dropped.”
On the supply side, StoneX modestly increased its forecast, with record levels of nickel pig iron (NPI) production and ex-NPI production in Indonesia. Output levels were being lifted in the country by the expansion of NPI to nickel matte and continued growth in high-pressure acid leach production.
“Although we do factor in a potential downside risk coming from Russian production, given the ongoing war,” Scott-Gray said. StoneX's belief was that the European Union likely wouldn't place an export ban on Russian nickel.
Nickel prices ended the quarter trading at US$22,698, declining more than 31 percent since the beginning of April.
Nickel price in Q3 : Market stabilizes
The third quarter was dominated by volatility, with nickel reaching its highest point of the period on September 21, when it almost broke the US$25,000 threshold. But prices were unable to hold on to gains, retreating to end the quarter at US$21,107.
Speaking with INN about the main trends seen in the nickel market in Q3, Adrian Gardner of Wood Mackenzie said prices performed as expected, with considerably more stability than seen over the past eight months.
“Push-pull price factors largely canceled each other out, giving small differences between lows-highs of monthly averages,” he said.
For Wood Mackenzie, a significantly weaker stainless steel sector across all major consuming areas had been having a negative impact on primary nickel demand since April.
“This weakness will probably extend into Q4 2022, leaving growth profiles for Q1 2023 in doubt also,” Gardner said.
Nickel is also a key element used in cathodes for electric vehicle batteries, with many believing demand from this sector will increase significantly in the coming decades.
“Primary nickel demand from the batteries sector, especially in China, which controls about 80 to 85 percent of nickel demand in battery precursors, has been much stronger than expected, and Q4 2022 appears to remain on the same track,” Gardner said.
World primary nickel production was 2.49 million MT in 2020 and 2.61 million MT in 2021, and is forecast to reach 3.08 million MT in 2022, mainly due to expected increases in Indonesia and China, as per the International Nickel Study Group.
All in all, the nickel market is set to record a moderate surplus in 2022 upon outright contraction in the largest end use — stainless steel — despite healthy growth in the fastest-growing market — electric vehicles — according to StoneX.
“Meanwhile, production is set to post a record on capacity additions of NPI within Indonesia and alternative routes of Class I production, such as high-pressure acid leach and NPI to nickel matte,” Scott-Gray, the firm's senior metals analyst, said.
Nickel price in Q4: Volatility takes the lead
Nickel’s performance in the fourth quarter so far has been in an upward trend, with prices breaking the US$30,000 level.
ING’s Ewa Manthey said the metals complex has had a volatile year, but nickel is the standout across the complex, managing to hold onto year-to-date gains.
“Still, the LME price is down significantly from its year-to-date highs in March following a short squeeze, as recession fears have undermined market sentiment,” she said. “Volatility in the nickel market has become more common in recent months, with reduced liquidity ever since the short squeeze seen back in March.”
In November, nickel prices soared to their highest level since the LME meltdown in March, which traders attributed to the low liquidity in the exchange since the unprecedented price spike earlier this year.
“The market is still very thin. What we’ve seen is the effects of low liquidity play out right in front of us,” said Geordie Wilkes , head of research at Sucden Financial, a metals brokerage.
For its part, the LME said has undertaken “enhanced monitoring” of market participants’ trading activities in order to stabilize the volatility seen in recent weeks.
"The LME notes the current volatility in nickel," the exchange said. "The price limits in place are functioning as expected and the LME is undertaking enhanced monitoring to ensure that participants' trading activities are being conducted appropriately."
Manthey said she expects more near-term volatility to continue until the LME rebuilds trust in the benchmark nickel contract, volumes pick up again and the market’s confidence in it recovers.
“We forecast nickel prices to remain under pressure in the short term as a surplus in the market builds; however, the tightness in the Class 1 market is likely to offer some support,” she added.
On December 7, nickel was trading at US$31,441, up from its starting point at US$20,888 on January 3.
Don’t forget to follow us @INN_Resource for real-time news updates.
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Nickel Price Forecast: Top Trends That Will Impact Nickel in 2023
Pull quotes were provided by Investing News Network clients Canada Nickel Company and Nova Royalty . This article is not paid-for content.
Nickel’s price volatility in early 2022 made news headlines, shaking the industry as the important base metal surpassed the historic US$100,000 per metric ton (MT) level for the first time ever.
Although the market is struggling to stabilize, stainless steel looks set to remain its main demand driver for some time; however, interest in nickel’s use in electric vehicle (EV) batteries is quickly picking up pace.
As the year comes to a close, the Investing News Network (INN) asked analysts in the field for their thoughts on what’s ahead for the commodity. Read on to find out what they had to say.
How did nickel prices perform in 2022?
Nickel's unprecedented price increase in Q1 , which sent it up over 250 percent in just two days, prompted the suspension of trading at the London Metal Exchange (LME). The 145-year-old exchange resumed trading in mid-March after canceling some of the trades, with prices retreating to trade at around US$22,000 by mid-year — almost the same level at which they started in 2022.
Nickel's price performance year-to-date.
Chart via the London Metal Exchange .
During the first months of the year, the market saw a downgrade to demand within China for both stainless steel and EVs, with any further extension of COVID-19 lockdown measures expected to exacerbate the situation.
“Generally, with nickel prices falling, and therefore stainless prices, stainless customers have become cautious, not wanting to buy a product that then loses value. So orders dropped,” Sean Mulshaw of Wood Mackenzie told INN at the time.
The third quarter proved to be stable for nickel prices, which ended the period almost neutral.
“Tightening monetary policy globally, the fallout from the war in Ukraine, a wobbly property sector in China and a new Covid-19 outbreak in Shenzhen all hurt activity,” analysts at FocusEconomics said. “That said, lower nickel stocks in LME warehouses provided some lift to nickel prices.”
In November, prices saw an uptick as volatility increased, with the LME stepping in to scrutinize trading.
ING’s Ewa Manthey told INN that this volatility is likely to continue until market participants feel they can trust the LME's benchmark nickel contract again. “We forecast nickel prices to remain under pressure in the short term as a surplus in the market builds; however, the tightness in the Class 1 market is likely to offer some support,” she added.
On December 7, nickel was trading at US$31,441, up from its starting point of US$20,888 on January 3.
What is the nickel supply and demand forecast for 2023?
At the end of 2021, most analysts expected the nickel market to remain balanced in 2022, with strong prices forecast for the base metal. However, weak stainless steel sector demand has changed the situation.
With the year nearly over, Manthey said it now looks like the global nickel market will record a surplus, although it will be mostly in the Class 2 market, which includes ferronickel and nickel pig iron .
“The LME deliverable Class 1 market has been relatively tight, with LME stocks falling by around 50,000 tonnes since the start of the year and recently hitting a 14 year low. The reported LME stocks are now below three weeks of consumption — another factor driving the price swings in the LME nickel contract," she said.
Nickel is a key cathode material for EV batteries, and many believe demand from this sector will increase significantly in coming decades. But for now EVs account for a relatively small segment of demand, well below stainless steel, which is responsible for 70 percent of consumption. “Although demand from the battery sector is growing rapidly, making up around 5 percent of total demand at the moment, it isn’t enough to offset a slowdown in traditional sectors like construction,” Manthey said.
Speaking further about demand, she pointed out that nickel is one of many metals whose usage has been hurt by China’s strict zero-COVID policy, which has dampened the construction industry. “China’s relaxation of its COVID policy would have a significant effect on the steel market, and by extension on the nickel market,” Manthey said.
Looking over to supply, Indonesia will be key to watch as it boosts production to meet demand. Citing data from the International Nickel Study Group, Manthey noted that the country's output rose 41 percent year-on-year in the first seven months of 2022, with its output of 814,000 tonnes accounting for 47 percent of supply globally. That's up from 38 percent over the same period of 2021.
“We believe rising output in Indonesia will pressure nickel prices next year,” she said, pointing out that the US Geological Survey sees the nation producing 1.25 million to 1.5 million tonnes of nickel this year, over 40 percent of world mined production.
For Rodney Hooper of RK Equity , nickel is the metal to be watching next year. “A lot of people, when they originally had quite conservative estimates on EV sales, didn't have EVs as a major component of the nickel market,” he told INN. “But of course, that's all turned on its head and now EVs represent a big percentage of nickel demand, and they will continue to rise going forward.”
Permitting times are one of the main challenges that upcoming nickel projects continue to come up against.
“Funding (for battery metals projects) has happened, but it's not happening still at a rate that anyone needs; institutional money is still not as aggressive as it should be,” Simon Moores of Benchmark Mineral Intelligence told INN. “And then, if they get the money to take it to the permitting stage, permitting is a massive hurdle — it can add 50 percent of the time onto building your mine.”
As governments continue to push to take further control of their lithium -ion battery supply chains, including sourcing raw materials regionally, the US, Canada, Europe and even Australia have been moving forward with critical minerals strategies, which are expected to address mining, among other issues.
What factors will move the nickel market in 2023?
In closing, Manthey reiterated that ING expects short-term pressure for nickel due to a surplus in the market, but said prices should see some support from tight conditions for Class 1 material.
“We see prices hovering between US$20,000 and US$20,500 over the first two quarters of 2023 before gradually increasing to US$21,000 in 3Q and US$22,000 in 4Q as the global growth outlook starts to improve,” Manthey said.
Looking at catalysts to keep an eye out for in 2023, analysts at FocusEconomics believe a global economic recession is a key downside risk to prices, while potential disruption to Russian nickel supply — either because of western sanctions or Russian export controls — is an upside risk for the metal.
“The resilience of the Chinese economy and the country’s handling of new COVID-19 outbreaks are key factors to watch,” they said. “In the long run, the rise of EVs bodes well for demand, as nickel is an important component in lithium-ion batteries.”
Panelists polled by FocusEconomics see nickel prices averaging US$21,559 by the end of 2022 and US$20,366 by the end of 2023.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Nickel Price Update: Q1 2023 in Review
Nickel prices declined more than 20 percent in the first three months of the year, and uncertainty and volatility are expected to continue rocking the sector as 2023 moves ahead.
Increasing supply from Indonesia and a slower-than-forecast demand rebound from China hit the market in Q1, creating a slowdown at a time when the industry is still recovering from last year’s London Metal Exchange (LME) meltdown.
What else happened to nickel in the first quarter of this year? Read on to learn what experts told the Investing News Network (INN) about supply and demand dynamics and what they're expecting for the rest of the year.
How did nickel prices perform in Q1?
Nickel prices kicked off the year trading at the US$30,000 per metric ton (MT) level, hitting their highest point of the quarter on January 3 at US$31,118.
Nickel's Q1 2023 price performance.
Chart via the London Metal Exchange .
But the nickel market remained in a surplus during the first three months of 2023, with slightly lower-than-expected demand from top metals consumer China impacting prices.
“Nickel prices have remained volatile in 2023 with the US dollar strength and fears of a potential US banking crisis driving prices lower in the past month,” Ewa Manthey of ING told INN.
The base metal was unable to sustain gains throughout the three month period, falling steadily to reach its lowest quarterly mark on March 23, when it was changing hands for US$22,517.
“March’s double-digit percentage decline was likely driven by an adjustment between LME prices for Class 1 nickel and prices in the larger lower-grade nickel market,” FocusEconomics analysts said in their latest report. “Many analysts argue that the gap between the price of lower-grade nickel and the LME price has become too wide for the latter to be used in trades.”
Nickel market participants remain focused on what's ahead for the LME contract — the exchange had to suspend trading last year after prices climbed to US$100,000. Adding to the lack of liquidity it has been experiencing, the LME said in March that it discovered bags of stones instead of nickel in one of its warehouses.
“There remains considerable doubt regarding trust with the LME nickel contract,” Adrian Gardner of Wood Mackenzie told INN. “I doubt this sentiment will change until the court cases currently underway are concluded, and that will take months.”
For her part, Manthey expects LME nickel liquidity to remain thin, with prices staying volatile in the near term until the LME restores market confidence in its nickel contract.
“These illiquid trading conditions will continue to exacerbate the bearish drivers for nickel,” she said.
Prices closed the quarter trading at US$23,838, 20.6 percent lower than where they started the year.
“Prices ended up slightly softer than we expected,” Gardner said. In mid-December 2022, the firm was calling for a Q1 LME cash average price of US$27,190, but it ended up at US$26,065.
Nickel supply and demand dynamics in 2023
At the end of last year, analysts were expecting the nickel market to remain under pressure as a surplus in the market built up.
Production of stainless steel accounts for around 70 percent of nickel demand, and this is largely fueled by developing countries in the midst of infrastructure expansions. But Chinese demand during Q1 did not pick up as strongly as analysts had expected.
“In Europe and North America, stainless steel production has been tepid at best, and scrap utilization rates have been high, reducing the demand for primary nickel products,” Gardner said.
Demand was also not as strong for the battery segment. Nickel is a key element used in cathodes for electric car batteries, and many believe demand from this sector will increase significantly in the coming decades.
“China will be the key driver of nickel demand this year, helped by the reopening of its economy, with pent-up consumer demand expected to drive the country’s economic recovery,” Manthey said.
During the second quarter. Wood Mackenzie expects to see an 8 percent global demand growth compared to the first three months of the year, reaching 830,000 MT.
“That will be another quarterly global demand record, beating the prior record of 780,000 tonnes set in Q4 2022,” he said. “However, with refined supply also setting a new record at 870,000 tonnes, Q2 will still see a surplus in the market.”
Last year, Indonesia remained by far the largest producer of nickel, followed by the Philippines and Russia.
US Geological Survey data shows that estimated global nickel mine production increased by about 20 percent in 2022, reaching 3.3 million MT; almost all of the increased production was attributed to Indonesia.
“The nickel market will remain in surplus over the medium term on the back of strong supply growth in Indonesia,” Manthey said.
For its part, Wood Mackenzie expects primary refined nickel supply to increase by over 11 percent in 2023 compared to 2022, rising to 3.482 million MT.
“That 11 percent growth could be conservative, given the amount of projects that intend to come on stream this year,” Gardner said. “However, the biggest challenge will be demand – can current offtake rates accommodate so much more material? We doubt that it can, and so the question will be which suppliers moderate their own growth/expansions in order to protect prices.”
Indonesia's role in the nickel space
Indonesia has been gaining attention from investors in the nickel space for some months, particularly when it comes to the role the country could play in the battery space. Reuters data shows that the country has signed more than a dozen deals worth over US$15 billion for battery materials and EV production.
“For the next 18 months or so, the headlines out of Indonesia will focus on the mining and processing of nickel semi-manufactured products of mixed hydroxide precipitate and matte, which will, for the most part, be exported to China for further processing into nickel sulfate or metal,” Gardner said.
But into the second half of 2024 and beyond, the analyst expects to see further investments in value-added sectors within Indonesia, taking that mixed hydroxide precipitate and matte into refined sulfate and then into precursors and cathode active materials.
“Most of the investments in such downstream activities … remain in the discussion phases, but Indonesia is in a hurry for all this investment, yet construction takes longer than one thinks,” Gardner said. “Indonesia also needs to work out if it wants to diversify its sources of investment to include other western partners.”
But one serious challenge that the expert sees for Indonesia is the global — excluding China — perception of how “green” it is to get nickel into batteries made entirely in Indonesia versus coming from recycled batteries in Europe or North America.
“There’s a lot of financial backing available to companies wanting to invest in the truly green battery space, but is Indonesia positioning itself to be sufficiently attractive to be a contender to receive it?” he said.
What's ahead for the nickel market in 2023?
Looking ahead, FocusEconomics analysts believe nickel prices should decline this year, but remain well above their 10 year average. Panelists at the firm see the metal averaging US$22,973 in Q4 of this year, and US$22,131 in the same quarter in 2024.
Meanwhile, ING expects nickel to gradually move higher over the course of 2023, averaging US$25,250 in for the year.
“However, price gains are likely to be capped by rising Indonesian production, keeping the market in a surplus this year,” Manthey said.
For its part, Wood Mackenzie is forecasting an average Q2 price of US$22,900.
“We really need to see Chinese and European stainless steel demand pick up,” Gardner said. “Everyone talks about batteries, but stainless steel still accounts for 65 to 70 percent of primary nickel demand.”
Another factor to keep in mind, according to the analyst, is high and rising interest rates, which make everyone cautious about buying or investing in industrial metals assets and products.
“And holding nickel and/or stainless steel products in inventory at high 'costs' at a time of such high interest rates and tepid demand is not for the faint hearted,” he said.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Nickel Price Update: Q2 2023 in Review
Nickel prices declined more than 30 percent in the first six months of the year, and uncertainty and volatility are expected to continue to affect the market for the base metal in the coming months.
Increasing supply from Indonesia and a slower-than-forecast demand rebound from China have hit the sector in recent months, even as the market continues to recover from last year’s London Metal Exchange (LME) meltdown.
What happened in the second quarter of this year in the nickel space? Read on to learn about the main trends in the nickel market in Q2, including supply and demand dynamics and what market participants are expecting for the rest of the year.
How did nickel prices perform in Q2?
Nickel prices kicked off the year trading at the US$30,000 per metric ton (MT) level, hitting their highest point of 2023 on January 3 at US$31,118. Since then, prices have plummeted to hover around US$20,000.
Nickel's price performance in H1 2023.
Chart via the London Metal Exchange .
Q2 started with nickel trading at US$23,838; it then rose to its highest point of the quarter on April 18 at US$25,633.
“The increase was likely driven by a surge in demand, as consumers believed prices had bottomed out — nickel prices declined by 21.4 percent from January to March — as well as a rise in demand for stainless steel,” analysts at FocusEconomics said in May.
But the base metal was unable to sustain that level, and fell throughout the three month period to touch its lowest point on June 28, when it was changing hands for US$20,056.
During Q2, Wood Mackenzie Principal Analyst Adrian Gardner said prices performed in line with his expectations.
The main factors impacting the nickel market in the second quarter were "the poor pickup in the Chinese economy and the increasing excess of nickel supply,” the analyst told the Investing News Network.
“I thought that the Chinese economy and domestic demand for nickel-related items, such as stainless steel, would fare better than they have. Right at the end of June, the Chinese government and its central bank acknowledged that its economy needed help, and so they reduced lending rates and introduced a significant subsidy program to boost production and sales of electric vehicles (EVs) over the next four years," he explained.
“Although the volumes have stabilized over the past few months, they are still at lower levels than before the nickel crisis last year,” ING’s Ewa Manthey said in a note . “We expect more near-term volatility to continue until the LME rebuilds trust in the benchmark nickel contract, volumes pick up again and the market’s confidence in it recovers.”
Nickel prices have declined almost 37 percent since the start of the year, ending the second quarter at US$20,516.
What is the nickel supply and demand forecast for 2023?
At the end of last year, analysts were expecting the nickel market to remain under pressure as a surplus in the industry built up. Most continue to agree that a surplus is on the horizon in 2023.
“In the past, market surpluses have been due to Class 1 nickel; however, in 2023, the surplus will be on account of Class 2 nickel,” Manthey said. Class 1 nickel is the type deliverable on the LME, while Class 2 includes nickel pig iron and ferronickel.
Production of stainless steel accounts for around 70 percent of nickel demand. However, Chinese demand during the first months of the year did not see as strong of a revival as analysts had expected.
“In light of the Chinese economic and EV sector-specific incentives just released, we are expecting a better H2 from both the stainless and battery segments,” Gardner said. Chinese demand is expected to be up by 8 percent for stainless steel and 18 percent for the battery segment in the second half compared to the first half of this year.
Looking further ahead, the nickel market will see a shift in demand segments in the coming decade, with the battery space growing its share. Fastmarkets is forecasting its share of demand will jump from 12 percent in 2022 to 41 percent in 2033.
“This is going to require substantial additional nickel units, and not the type of units that the industry has geared itself to produce in the recent past,” Olivier Masson of Fastmarkets said in a keynote presentation in June.
As a result of the increased need for supply, Indonesia has been gathering attention from investors in the nickel space for some months, in particular when it comes to the role the country could play in the battery space. Reuters data shows that the country has signed more than a dozen deals worth more than US$15 billion for battery materials and EV production.
“Chinese investors are expecting to see their new acid leaching and matte projects in Indonesia come on stream, with one at least going all the way through to nickel sulfate,” Gardner said. “So far, the ramp-up success has been good, but the question is — will it continue?”
Additionally, the analyst added, when it comes to Indonesia and China, the market needs to see the excess of nickel pig iron in both countries being absorbed by better performance in domestic stainless steel consumption in China.
Looking over to supply in 2023, Wood Mackenzie expects H2 refined supply to be only marginally above H1 at 1.77 million MT compared to 1.73 million MT. “But we have an eye to H1 2024’s growth to 1.91 million tonnes as new projects both ramp up from a Q4 2023 start or become commissioned during Q1 2024,” Gardner said.
When asked about the main challenges junior miners face today, Gardner said there is considerable appetite among majors, including conventional miners/refiners and automotive OEMs, for the “right” resource for battery raw materials.
“Junior miners/exploration companies need to hold their nerve and not accept the takeover/equity investment bid from the first offer that comes along,” he added.
What's ahead for nickel prices in 2023?
Nickel has been the worst-performing metal on the London Metal Exchange so far this year, according to ING.
“This underperformance is likely to continue as we head into the second half of 2023 with the market likely to test lower levels amid a weak macro picture and sustained market surplus,” Manthey said.
ING sees prices averaging US$21,000 in the third quarter and US$20,000 in the fourth quarter.
“Prices should, however, remain at elevated levels compared to the average prices pre the historic LME nickel short squeeze due to nickel’s role in global energy transition, and the metal’s appeal to investors as a key green metal will support higher prices in the longer term,” Manthey added.
In terms of prices, Wood Mackenzie expects nickel to hold steady at between US$22,000 to US$22,500. Given the oversupply outlook forecast by the firm, prices are unlikely to rise again for the next few years.
For FocusEconomics panelists, nickel prices are seen rising above the levels seen at the end of June by the close of the year, supported by surging demand from the EV sector.
“However, excess supply from Indonesia and China should keep the market in surplus,” they said in their latest report.
FocusEconomics panelists see nickel prices averaging US$21,156 in Q4 2023 and US$20,738 in Q4 2024.
Don’t forget to follow us @INN_Resource for real-time news updates!
Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Top 5 ASX Nickel Stocks of 2023
With its diverse applications in both technology and industry, nickel is a metal that will never go out of style.
Nickel is commonly used in alloys to create stainless steel, but more recently has found a modern use: batteries. With the rising trend toward electric vehicles, the base metal is in high demand for its role in the production of lithium-ion batteries.
Nickel prices have encountered much volatility in the past few years. They spiked abruptly to surpass the US$100,000 per tonne point in March 2022, prompting the suspension of trading on the London Metal Exchange. However, nickel trading soon resumed, and prices fell back to a normal range over the following months, nearing the US$20,000 mark by July of last year.
China ending its zero-COVID policy gave the base metal a boost to the US$30,000 level as 2023 came into frame. However, global economic uncertainties have placed downward pressure on demand, sending nickel to the US$20,000 mark in Q2 .
Against that backdrop, the Investing News Network has listed the top nickel stocks on the ASX by year-to-date gains. Data for this list was gathered using TradingView's stock screener on July 17, 2023, and all companies had market caps above AU$10 million at that time. Read on to learn more about the top ASX nickel stocks.
1. Ragnar Metals
Year-to-date gain: 84.62 percent; market cap: AU$11.37 million; current share price: AU$0.024
Ragnar Metals (ASX: RAG ) is building a portfolio of prospective nickel, copper and gold assets across Sweden. Its main focus is its Granmuren nickel prospect, a greenfield discovery that also includes copper and cobalt in “Voisey's Bay style mineralization."
In February, Ragnar announced the identification of three new targets via downhole induced polarisation and resistivity surveys, as well as downhole transient electromagnetic surveys. “We are very excited about the new target areas defined by these new cutting-edge downhole geophysics technologies that provide evidence the Granmuren nickel-copper-cobalt system continues to expand in several directions at depth,” Ragnar Metals Executive Director Eddie King said.
2. Leeuwin Metals
Year-to-date gain: 71.74 percent; market cap: AU$17.47 million; current share price: AU$0.395
A relatively new addition to the ASX , Leeuwin Metals (ASX: LM1 ) is targeting critical metals that are necessary for the electric vehicle and renewable energy markets, such as nickel, copper and lithium. Its assets include five projects across Canada and Western Australia. Leeuwin’s flagship project is the William Lake nickel sulphide project, located in Manitoba’s Thompson nickel belt.
This year's 5,000 metre maiden drill program at William Lake is targeting high-grade nickel sulphide mineralisation that was previously identified over more than 2 kilometres of strike at the W56 prospect. In July, Leeuwin reported multiple significant nickel sulphide hits , including a 1.4 metre massive to semi-massive sulphide zone with spot readings of 5 percent nickel within a 24 metre zone of disseminated nickeliferous sulphides from 227.2 metres.
3. Nordic Nickel
Year-to-date gain: 28.21 percent; market cap: AU$14.62 million; current share price: AU$0.25
Nordic Nickel (ASX:NNL) is working to become a major supplier of sustainably sourced battery-grade nickel.
The company has a portfolio of prospective projects in Finland’s Central Lapland greenstone belt , including its wholly owned flagship Pulju project, which has a JORC-compliant resource estimate of 133.6 million tonnes, including 278,520 tonnes of nickel and 12,650 tonnes of cobalt. In May, Nordic Nickel published assays from recent drill work confirming an extensive nickel sulphide system at Pulju.
4. Adavale Resources
Y ear-to-date gain: 16.67 percent; market cap: AU$10.98 million; current share price: AU$0.021`
Adavale Resources (ASX: ADD ) is an explorer and developer that owns 100 percent of the Kabanga Jirani nickel project, as well as two farm-in licences (Luhuma) in Tanzania's East African Nickel Belt. The company claims that its nickel project portfolio is "adjacent and along strike from the world’s largest undeveloped high-grade Kabanga nickel sulphide deposit."
Adavale recently confirmed massive nickel sulphides as part of a campaign currently underway at the Luhuma Central prospect. “These results are extremely encouraging as we continue to drill and seek to unlock the strike potential of this mineralisation, based on our extensive AMT, soil and EM datasets covering this area," said Adavale Executive Director David Riekie.
5. Lunnon Metals
Y ear-to-date gain: 3.91 percent; market cap: AU$189.58 million; current share price: AU$0.93
Exploration company Lunnon Metals (ASX: LM8 ) owns what it describes as a prospective nickel-gold project in Western Australia's Kambalda nickel district, which has produced more than 1.6 million tonnes of nickel since its discovery in 1966.
Lunnon completed a preliminary feasibility study for its Baker project in May, including an initial probable ore reserve for the deposit of 612,000 tonnes at 2.86 percent nickel for 17,500 contained nickel tonnes.
Don’t forget to follow us @INN_Australia for real-time updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Nordic Nickel is a client of the Investing News Network. This article is not paid-for content.
Daydream-2 Progress Report
Elixir Energy Limited (“Elixir” or the “Company”) is pleased to provide an update on its 100% owned Grandis Gas Project (ATP 2044) located in the Taroom Trough of the Bowen Basin, Queensland.
HIGHLIGHTS
- Daydream-2 intersects primary target Kianga Formation ahead of schedule
- Well intersects strong gas shows, with the first gas peak measuring 777 units (38 times above background)
- Total depth and wireline logging expected within the next week
Excerpt from mud log at Daydream-2 over the primary target
Daydream-2 has intersected the primary target Kianga Formation at 3,694 metres, close to the original prognosis, with elevated gas shows immediately recorded by the mud logging team. The well intersected the primary objective after 19 days of drilling operations, which is several days ahead of schedule. Upon intersecting the first coal and sand, the gas shows increased from 20 units to a peak of 777 units, which represents a 38 times increase above background.
The sands were described as very fine to medium grained and friable. The coal was described as vitreous to sub-vitreous and sub-blocky. These descriptions are in line with original expectations and similar to the Daydream-1 gas discovery well.
The well will now drill the remaining reservoir section to a Total Depth (TD) of approximately 4,200 metres, then wireline logs will be run and a petrophysical evaluation undertaken. The well will be then cased and suspended for future stimulation and testing operations, planned for the New Year.
Engineers & geologists in Daydream-2’s Mudlogging Unit
Elixir’s Managing Director, Mr Neil Young, said : “The drilling performance at Daydream-2 continues to impress. So far the well has been drilled ahead of schedule and under budget. The excellent gas shows encountered as we have entered our primary target meet our appraisal objectives and we look forward to reaching total depth and determining the overall extent of the gas bearing formations very shortly.”
Click here for the full ASX Release
This article includes content from Elixir Energy, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer
here
.
Makuutu Land Access Agreement Verification Completed by DGSM for Stage 1 Mining License Application
Ionic Rare Earths Limited (“IonicRE” or “the Company”) (ASX: IXR) is pleased to provide a further update on progress in securing land access agreements and the verification process for the Mining Licence Application (MLA) for the Stage One development of the Makuutu Rare Earths Project (“Makuutu”) over Retention Licence (RL) 1693 (application TN03834), through local Ugandan operating entity Rwenzori Rare Metals Limited (“RRM”).
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Ugandan Government representatives from the Directorate of Geological Survey and Mines (DGSM) have completed the on-site verification processes noting strong local support from stakeholders providing positive social licence to operate;
- Land access agreements now secured for over 95% of the full 44km2 Mining Licence Application (MLA) for the Stage One development of the Makuutu Project over Retention Licence (RL) 1693 (application TN03834);
- Final administrative stages of the Mining Licence approval process underway; and
- Makuutu’s basket contains 71% magnet and heavy rare earths content, and is one of the most advanced heavy rare earth projects globally available as a source for new supply chains emerging across Europe, the US, and Asia.
The Ugandan government approved RRM’s proposed process to secure land access agreements on 15th September 2023. Land access agreements have now been secured for 95% of the MLA.
As noted in earlier announcements, the Makuutu Heavy Rare Earths Project has the Government’s full support and is set to become Uganda’s flagship mine (refer also to IXR ASX release on the 11th of September 2023 for more detail).
Last week, RRM hosted a delegation from the Directorate of Geological Survey and Mines (DGSM) to conduct physical verification and stakeholder engagement activities. The Delegation undertook a three-day process on behalf of the Permanent Secretary of the Ministry of Energy and Mineral Development (MEMD) to verify the process undertaken and results achieved by RRM in securing Land Access agreements as part of the Mining Licence application process.
Key observations of the visit by the DGSM conveyed to the Company indicated that across the three districts, local stakeholders confirmed satisfaction with project engagement and emphasised that RRM should be granted a mining licence.
On conclusion, the DGSM lead confirmed that an excellent land acquisition and community engagement process had been undertaken. The DGSM also noted that RRM has a social licence to operate in the project area based on the goodwill noted over the three days and the continued support for the Project by the community.
The company is now engaging with the DGSM and MEMD on the formal award, and the gazetting of the formal award of the Stage 1 mining license over TN03834.
Figure 1: Makuutu Project area showing stage 1 MLA area at RL 1693 / TN03834, pending award.
Click here for the full ASX Release
This article includes content from Ionic Rare Earths, licensed for the purpose of publishing on Investing News Australia. This article does not constitute financial product advice. It is your responsibility to perform proper due diligence before acting upon any information provided here. Please refer to our full disclaimer
here
.
2023 Q4 Gold Outlook: Australia Edition
Find out what is in store for gold in 2023!
The Investing News Network (INN) spoke with analysts, market watchers and insiders about which trends will impact the precious metals sector in the year ahead.
✓ Trends ✓ Forecasts ✓ Top Stocks
Table of Contents:
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A Sneak Peek At What The Insiders Are Saying
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"My guess is that as the world descends into chaos — and I think that's true, we are going to see chaos later this year and throughout this decade — there's going to be a panic into gold, because it's the only financial asset that's not simultaneously someone else's liability"
— Doug Casey, InternationalMan.com |
Who We Are
The Investing News Network is a growing network of authoritative publications delivering independent, unbiased news and education for investors. We deliver knowledgeable, carefully curated coverage of a variety of markets including gold, cannabis, biotech and many others. This means you read nothing but the best from the entire world of investing advice, and never have to waste your valuable time doing hours, days or weeks of research yourself.
At the same time, not a single word of the content we choose for you is paid for by any company or investment advisor: We choose our content based solely on its informational and educational value to you, the investor.
So if you are looking for a way to diversify your portfolio amidst political and financial instability, this is the place to start. Right now.
2023 Gold Outlook: Australia Edition
Table of Contents
Gold Price Update: Q1 2023 in Review
Gold Price Update: Q2 2023 in Review
Gold Price Update: Q3 2023 in Review
Lobo Tiggre: Gold Stocks are My Highest-Conviction Trade for 2024
Tavi Costa: Gold Price Breakout is "Inevitable," Don't Lose Focus Now
Gold Price Update: Q1 2023 in Review
Gold has seen a thunderous start to 2023 — thanks to significant economic disruptions, it's jumped in value while continuing to play a key role as a safe haven.
The precious metal's run has created tremendous opportunities for gold bulls, especially as it appears to be stabilizing above the US$2,000 per ounce mark, with experts pointing to potentially higher points this year.
Here the Investing News Network (INN) provides a recap of what happened in the gold market in the first three months of 2023.
Narrative changing after disappointing 2022
Greg Taylor, chief investment officer at Purpose Investments, told INN that many investors were disappointed with gold last year due to its flat performance, even with high levels of inflation.
“(Investors) just got really frustrated with it and it hadn't really worked. Now it's starting to work and people are taking another look at it,” Taylor said.
The expert added that since the US dollar was up and enjoyed a strong period last year, it “offset a lot of the inflation reasons for people to own gold.”
But heading into this year, Taylor said, the gold investment cycle has seen new life.
The financial expert explained that even as central banks prepare to pause or slow the pace of their rate hikes, inflation remains higher than they would like.
“We're starting to hear more and more concerns that there's potential stagflation ,” Taylor said. “When you get stagflation, that's the perfect snare for gold.”
More investors appreciating gold in 2023
Shree Kargutkar, managing partner at Sprott (TSX: SII ,NYSE:SII), told INN that despite gold's success so far in 2023, he still doesn’t think most investors have exposure to the yellow metal.
“I would say the average investor today is not really invested in gold. Rather, the average investor today is a speculator as far as the bullion is concerned,” Kargutkar said.
The Sprott expert explained that holdings in precious metals bullion exchange-traded funds have declined approximately 15 percent from their peak in the second half of 2020.
“People have actually been reducing their allocation to gold. And the average investor has been spectating for admission,” Kargutkar said.
When discussing the role of gold in an investor’s portfolio, Taylor cautioned that he doesn’t think gold should take a dominant role. “But having a sleeve of real asset exposure in the 5 to 10 percent range is probably not a bad, bad percentage to look at,” he said.
For his part, Kargutkar said the recent move in gold could create a bigger spotlight for the asset class. “My guess is it will probably make people want to perhaps take a second look at the metal as an important constituent of a portfolio,” he said.
US banking crisis boosts gold's safe-haven appeal
Gold’s tremendous rise can be attributed to a variety of factors in the global economic spectrum, but a major driver has been the fallout from US banking issues.
Silicon Valley Bank and Signature Bank faced serious bank runs after losing the confidence of their users, leading to two of the biggest bank collapses in US history.
This chaos was accompanied by the emergency rescue acquisition of Credit Suisse (NYSE: CS ) by UBS (NYSE: UBS ), which was in part organized by Swiss authorities.
The pressure points these events created caused panic to settle into the economic landscape, allowing gold to fulfill its role as a safe haven for the investing class.
Gold first crossed the US$2,000 level in March, and has found some stability above the coveted price mark.
Gold price chart, January 1, 2023, to April 20, 2023.
Chart via Trading Economics .
Market watchers eyeing the Fed's next move
Aside from banking issues, gold continues to be affected by moves from the US Federal Reserve.
Following its meeting in March, the central bank announced a 25 basis point rate hike, saying it remains committed to its goal of curbing inflation. Investors are now watching closely to see what it will do at its next meeting in May.
Economists polled by Reuters are expecting to see another 25 basis point interest rate increase from the central bank, despite recent data points from the consumer price index and the producer price index.
Both price markers show inflationary pressures are easing — in fact, the March drop in the producer price index was the biggest decline since the start of the pandemic in early 2020. Even so, inflation is still far from the Fed's target of 2 percent.
At the same time, the Fed may not be able to hike much further. Its latest meeting minutes indicate that it expects a “mild recession” in the second half of 2023, spurred by the banking crisis outlined earlier.
“Given their assessment of the potential economic effects of the recent banking-sector developments, the staff’s projection at the time of the March meeting included a mild recession starting later this year, with a recovery over the subsequent two years,” the central bank states in its meeting recap .
The Fed's next meeting runs from May 2 to 3.
Investor takeaway
After what many deemed a weaker year for gold in 2022, 2023 has been incredibly bullish for the precious metal.
EY's Theo Yameogo told INN it’s important to remember the nature of the market, and how these jumps have come and gone in the past. “It's just a reminder that this is cyclical,” he said.
Don't forget to follow us
@INN_Resource
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Gold Price Update: Q2 2023 in Review
Gold remained at historically high levels in the second quarter, although it fell below US$2,000 per ounce.
The US Federal Reserve was in focus during Q2, with investors closely watching the American economy for hints on the central bank's next move. While the summer is often a slower time, some experts believe it's a good chance to position.
Here the Investing News Network (INN) presents a recap of the Q2 period for the gold market.
How did the gold price perform in Q2?
The gold price spent a decent amount of time above US$2,000 in Q2, but has since pulled back.
The yellow metal remained near or above that level through April and May, but in June its price strength began to decline. It finished the second quarter around US$1,920, although by mid-July it was back up around US$1,970.
Gold price chart, January 1, 2023, to July 20, 2023.
Chart via Trading Economics .
Actions from the US Federal Reserve continue to impact gold, and at its June meeting it left interest rates unchanged at 5 to 5.25 percent. The decision came after 10 consecutive increases from the central bank.
Fed officials have said the goal is to take time to review the effects of its aggressive hiking strategy.
Since the June meeting, experts have been debating what the Fed will do next. While some market watchers are surprised the Fed has been able to raise rates as far as it has and don't think it will be able to go much further, the latest "dot plot" projections from Fed officials tell another story — they show two more hikes of 25 basis points each are possible in 2023.
In the gold space, there's a broad consensus that a change in tactics from the Fed could provide a price boost.
As part of its half-year update , the World Gold Council said global economies appear to be nearing the end of their tightening cycles. “As monetary policy likely transitions from tightening to on-hold, market consensus is for a mild contraction in the US this year, and slow growth in developed markets,” the organization states in its report.
“In this context and following gold’s positive returns in H1, we expect gold to remain supported on the back of range bound bond yields and a weaker dollar,” the World Gold Council also notes.
According to the association, gold has been one of the only true positive investment assets so far in 2023, especially as the economy was hit with uncertainty in North America from several staggering bank runs .
Gold ETF inflow streak ends in June
In another report, the World Gold Council states that June brought the end of a three month streak for inflows into gold-backed exchange-traded funds (ETFs), which are often seen as a safer way to get exposure to the market.
Gold ETFs saw outflows of US$3.7 billion in June, concentrated in Europe and in North America.
“The early June strong equity market performance in key markets likely shifted focus away from risk-off assets such as gold,” the World Global Council said, noting that global gold ETF holdings fell 56 metric tons to 3,422 metric tons.
“And the majority of outflows occurred when the gold price dropped during the second half of the month amid hawkishness from major central banks in the face of obstinate inflationary pressure.”
Summer offers gold investors time to position
John Feneck, portfolio manager and consultant at Feneck Consulting, recently told INN that investors should take advantage of the summer doldrum months to better position themselves in the gold space.
"Summertime and in December as well, when people aren't doing their homework, is when we're doing most of our work, because this is when you can pick up some huge bargains. If you feel like doing something with them and disposing of them later next year or the year after, you're going to make some considerable money we think," he said.
Watch the full interview with Feneck above.
Investor takeaway
The Q2 period offered a bit of a stopping point for gold as the Fed broke off from its rate hike strategy. Now investors are looking ahead at the second half of the year for catalysts that could push it above US$2,000 once again.
Don't forget to follow us
@INN_Resource
for real-time updates!
Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Gold Price Update: Q3 2023 in Review
The gold price began Q3 on a relatively high note, but was approaching US$1,800 per ounce by its end.
The yellow metal was pushing back toward the US$2,000 mark at the start of the period, but wasn't able to maintain that level. The quarter culminated in a precipitous decline that saw gold break through support.
What has caused gold to retreat so quickly? Read on to learn more about what factors have affected its price over the last three months, and about significant gold-related news released during that time.
How did the gold price perform in Q3?
Gold tends to underperform in when interest rates are high, which was the case in Q3. At its July meeting, the US Federal Reserve raised rates for the 11th time since March 2022, adding 25 basis points for a range of 5.25 to 5.5 percent — the highest in 22 years. The gold price fell steadily in the two weeks after the decision, slumping to US$1,885.70 on August 17.
Gold price chart, Q3 2023.
Chart via TradingEconomics.com .
After seeing some support from mid-August to mid-September, gold went into a tailspin to close the quarter at US$1,848.80. The drop came as the Fed announced on September 20 that it would hold rates steady , and as Chair Jerome Powell suggested the central bank is in a good position to deliver a “soft enough” landing.
Central banks continue buying gold
While higher rates continued to put pressure on gold this past quarter, global central bank buying has helped maintain the precious metal's price level. July and August saw central banks pick up 55 metric tons (MT) and 77 MT of gold respectively, bringing the total to 219 MT for the three months ended in August.
Leading the way is China , which has purchased 155 MT of the yellow metal since the start of the year as it tries to minimize its US dollar exposure. Its central bank currently holds gold reserves of 2,165 MT, accounting for 4 percent of global reserves.
With the Russia-Ukraine war on its doorstep, Poland has also been a significant buyer of gold, adding another 18 MT in August and bringing its yearly total to 88 MT. That moves it closer to its intended buying target of 100 MT for the year.
BRICS meeting turns head
Sanctions imposed on Russia following its invasion of Ukraine in February 2022 have renewed the BRICS nations' interest in finding an alternative to the US dollar as the global reserve currency.
Member nations Brazil, Russia, India and South Africa are keen to break from the US dollar, but it’s China in particular that has been working for several years to establish its own currency as an alternative, with increasing uptake . When the BRICS countries met from August 22 to 24, some market participants believed they might announce a new BRICS currency — perhaps one backed by gold or another commodity. But ultimately no such announcement was made at the meeting.
Many analysts believe the idea is untenable unless China and India are able to find common ground and resolve long-standing differences — and even if they did so, a BRICS currency wouldn't necessarily be backed by gold.
“The lack of information out there is extremely important in understanding what you’re looking at. There’s a lack of information because there is a lack of development,” Jeffrey Christian, managing partner at CPM Group, explained to the Investing News Network (INN) in the lead-up to the BRICS meeting.
“They do see a desire to cooperate among themselves to counter decades of hegemonic activity by the US and to a lesser extent Europe,” he continued. “But the idea of a central currency makes no sense. None of the countries really want to tie their currencies to Russia. The idea of a different currency backed by gold is a non-starter.”
M&A activity makes headlines
The massive deal between gold giants Newmont (TSX: NGT ,NYSE:NEM) and Newcrest Mining (ASX: NCM ,TSX:NCM) inched closer to completion through the third quarter. The deal, which will see Newmont acquire 100 percent of Newcrest, reached significant milestones as the companies received key approvals from Australia, Japan and Papua New Guinea.
Newmont shareholders met on October 11 to vote, with 96 percent of them voting in favor of the transaction. Newcrest shareholders are set to vote on October 13. Newmont has been trading lower since it announced its intention to acquire Newcrest on February 5, while Newcrest's share price has reacted more favorably.
Though this may be the biggest gold deal of the year, 2023 continues to be hot and is on track to bring in the highest level of mergers and acquisitions for the mining sector in a decade.
Other notable M&A announcements in the sector during Q3 include the completion of a merger between GCM Mining and Aris Gold on September 26 to create Aris Mining (TSX: ARIS ,NYSE:ARMN). The resultant company has operations in Colombia and produced 60,193 ounces of gold in its most recent quarter .
Aside from that, Canada’s Silvercorp Metals (TSX: SVM ,NYSEAMERICAN:SVM) announced on August 6 that it has entered into a binding scheme implementation deed to acquire Australia’s OreCorp (ASX: ORR ). The acquisition would give Silvercorp a US$630 million market cap and access to OreCorp’s multimillion-ounce Nyanzaga gold project in Northwest Tanzania. The project is expected to produce 240,000 ounces of gold per year once complete.
David Erfle, editor and founder of Junior Miner Junky, told INN at the end of Q3 that he sees growth potential in gold stocks, but with limited interest from retail investors, more M&A activity is necessary to bring interest to the market.
“A lot of (companies) are at the feasibility stage, or the construction stage or the finance stage, and their market cap is two or three or sometimes four times less than the equity it would take to build the mine,” he said. “What I'd like to see is several of these companies merge, so you have one company with a handful of these projects — maybe $150 million, $200 million in the bank, access to capital and also tack on a big board US listing. Then you're more liquid, you're more attractive."
Biggest IPO of the year is golden
July 7 brought Indonesia’s biggest initial public offering (IPO) this year and one of the world’s best-performing IPOs so far in 2023: PT Amman Mineral Internasional (IDX: AMMN ). The company raised the equivalent of over US$713 million in its IPO, and shares have since surged 250 percent in value, giving the firm a market cap of US$29 billion.
The company's most significant asset, Amman Mineral Nusa Tenggara — which includes the Batu Hijau mine, the second largest gold mine in Indonesia — was purchased from Newmont in 2016. The copper-gold mine produced 172,000 ounces of the yellow metal during the first half of the year.
So, why has gold retreated?
Even though there have been strong gold sector developments over the past three months, larger economic trends have made investments like Treasuries more attractive and have dulled gold's luster . The yellow metal's relatively flat growth over the past few years has also prompted investors to look for more immediate gains elsewhere.
With the US economy and dollar staying strong and no relief from high interest rates until at least 2024, it's not looking good for investors who hope gold will break through US$2,000 in the coming months.
However, the Fed has indicated that it's tracking the economy closely and has acknowledged that a recession hasn't been completely avoided . The central bank will meet again from October 31 to November 1 to determine whether another hike will be needed and to outline its steps for the beginning of next year.
Investor takeaway
Following a solid start to the year for gold, the third quarter brought setbacks for the metal, which is subject to both broad market forces and investor appetites. While retail and institutional investors may continue to shy away from gold for interest-bearing assets, central bank buying looks set to persist and may be a factor in price stabilization in Q4.
At the same time, Q4 has already brought a great deal of geopolitical instability. The invasion of Ukraine remains an issue for investors and, if it worsens, it could push the price of gold higher. Additionally, a burgeoning conflict in Israel has already pushed the price of the yellow metal up nearly 1 percent since hostilities began on October 7.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Lobo Tiggre: Gold Stocks are My Highest-Conviction Trade for 2024
In a recent interview, Lobo Tiggre, editor and founder of IndependentSpeculator.com , shared his highest-conviction trade for 2024. While he's still a uranium bull, he sees the most opportunity in gold stocks next year.
Back in July , Tiggre's focus had narrowed to uranium and he was feeling bearish on gold in the near term. But now he sees various factors lining up for gold, including a US recession, geopolitical concerns, inflation and central bank buying.
"Maybe it means a little bit more for me to say I'm looking at (gold)," he told the Investing News Network. "I'm looking at the recession — it's here on a global level and I think it's here in disguise in the US. But I think the disguise falls."
Watch the interview above for more from Tiggre on gold, as well as uranium and silver. You can also
click here
for the Investing News Network's full New Orleans Investment Conference playlist on YouTube.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Tavi Costa: Gold Price Breakout is "Inevitable," Don't Lose Focus Now
Speaking at the New Orleans Investment Conference, Tavi Costa, partner and portfolio manager at Crescat Capital, discussed sentiment in the resource sector, including where he sees opportunity today.
"Everyone is sort of waiting for this breakout in gold, otherwise there's no party," he said on the sidelines of the event. "Everyone is just waiting patiently, and in my view it's going to happen — it's inevitable that we're going to see a breakout. Then other commodities should follow, and then the valuations of companies should be rerated."
In terms of timing, Costa said that back in 2018 he started looking closely at CAPEX trends among mining companies. "You can kind of see when that bottoms out you tend to see a bull market in commodities. You just don't know on the macro side what the trigger is going to be, but the foundation of the thesis is there," he explained.
"I feel like everything is really coming together right now, (but) the sentiment is really bearish," Costa continued. "I am not that way at all. I'm extremely bullish, I'm really focused right now ... you don't want to lose focus at the wrong time."
Moving forward, he expects to see the traditional 60/40 portfolio fall by the wayside. "Those two allocations need to be redefined," he said. "I think commodities are going to play a role there. I think gold is going to be one of those assets that is going to be competing with Treasuries, just like central banks have been changing their allocation." Notably, he pointed out that recent research shows 70 percent of advisors have portfolios with less than 1 percent gold.
"I think (gold is) going to be one side. And then a basket of commodities will probably take the other side. And I would say emerging markets, especially rich resource economies like Brazil, will probably take a part of the equity market portion."
Watch the interview above for more of Costa's thoughts on gold and the resource sector. You can also click here for the Investing News Network's full New Orleans Investment Conference playlist on YouTube.
Don't forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Top 5 ASX Gold Stocks of 2023
The gold price has taken quite a ride this past year, facing significant peaks and valleys.
The yellow metal came close to making a new all-time high in May as the banking crisis in the US spooked investors, but then fell to yearly lows as the US Federal Reserve increased interest rates to the highest they’ve been since 2001. More recently, gold has moved back to higher levels, spurred upward by the ongoing conflict in the Middle East.
While physical gold is seen as a portfolio stabiliser, gold stocks can be appealing for those willing to take more risks.
But where should investors focus their attention? While there are many choices, the list below shows the ASX-listed gold companies that have seen the biggest share price gains year-to-date. All share price data was obtained on November 7, 2023, using TradingView's stock screener , and the stocks listed had market caps above AU$50 million at that time.
1. Spartan Resources
Year-to-date gain: 340 percent; market cap: AU$381.88 million; current share price: AU$0.44
Spartan Resources (ASX: SPR ) is a gold exploration and development company whose core assets are located in Western Australia. Its flagship operation, the Dalgaranga gold project, produced 71,153 ounces of the metal in 2022 before being placed on care and maintenance as low grades reduced the mine’s viability. The company believes its discovery of the Never Never deposit will allow it to shift its focus at the site by providing higher-grade feed.
Company shares began to rise in May following an announcement that new assay results from Never Never had revealed significant mineralisation from 110 metres below the core resource body. Exploration at the site indicated high-grade gold from near the surface to a depth of 500 metres, with one intercept hitting 35.47 grams per tonne (g/t) gold over 9.44 metres.
The high-grade assay results at Never Never were reinforced in June as continued drilling allowed Spartan to further define the depth of the resource and expand the envelope an additional 80 metres to the south . Based on the success of the drill program, in July Spartan provided an upgraded mineral reserve estimate of 721,200 ounces of gold from Never Never and 1.18 million ounces for the overall Dalgaranga project.
On September 12 , Spartan began a new 25,000 meter drill campaign at Dalgaranga. The plan is to cover a wide range of targets, including drilling to further extend the resource envelope for Never Never and exploring near-mine targets; the company will also drill the Arc prospect to the north and two new prospects to the south — called Four Pillars and West Wind, Spartan has said these new prospects are “Never Never look-alikes.”
The company released follow-up news on October 17 , providing initial results from the drill program; they feature more high-grade assays from Never Never, along with samples from Arc, including a section of 8.33 g/t gold over 4 metres. Spartan also said it is targeting a new deposit located 1.6 kilometres north of Never Never, which it has named Patient Wolf; drilling at the site has revealed a highlight interval grading 19.84 g/t gold over 10 metres.
The company’s most recent news came on October 30 , when it released an update on exploration efforts at its non-core Glenburgh and Egerton projects. Assays revealed near-surface deposits of 91.91 g/t gold over 4 metres from Egerton and 4.4 g/t gold over 12 metres from Glenburgh. Although they are outside of the core work taking place at Dalgaranga, Spartan said they add opportunities to its project portfolio.
2. Strickland Metals
Year-to-date gain: 300 percent; market cap: AU$280.29 million; current share price: AU$0.16
Strickland Metals (ASX: STK ) is an exploration company that is focused on gold and copper. Its current operations include the Yandal East project in Western Australia, which hosts the Horse Well target. The company's previous operation in the area was the Millrose gold deposit, which it sold to Northern Star Resources (ASX: NST ,OTC Pink:NESRF) on July 25 for AU$61 million. The company also owns the Bryah Basin gold and copper project in the Gascoyne region of Western Australia, and the Iroquois zinc, lead and silver project in the Earaheedy Basin in Western Australia.
Shares of Strickland have soared since its September 19 announcement of a previously unidentified gold trend at Horse Well. The discovery, dubbed the Marwari trend, came as part of a 40,000 metre drill program that the company announced on August 10 . The partial results included a high-grade interval of 5.6 g/t gold over 31 metres.
More results from the program were released on September 27 , at which time the company reported that Marwari extended at least 500 metres to the south of the initial discovery. In addition to the extension of Marwari, Strickland reported results from the Palomino prospect, with drilling revealing an interval of 39 meters grading 6.1 g/t gold, including 7 metres at 22 g/t gold. Furthermore, the company reported that a reinterpretation of datasets at Horse Well indicate the likely presence of an approximately 3 kilometre strike extension to the northwest that has not been drilled.
Continuing from its previous announcements, Strickland released news on October 2 that an additional discovery had been made at Horse Well, with intersects indicating high-grade, near-surface deposits across 200 metres along a 600 metre shear zone. The company noted that historic exploration of the site was oriented parallel to the structure and missed the target. It plans to continue drilling along the zone.
In its most recent update from Marwari, released on October 19 , Strickland reported that it has used magnetic inversion modelling to help better define the deposit. This testing has extended the strike length to 700 metres, and has also outlined a substantial new target beneath the current drilling. The company commenced diamond drilling at Marwari October 27 .
3. Westgold Resources
Year-to-date gain: 136.16 percent; market cap: AU$1 billion; current share price: AU$2.09
Westgold Resources (ASX: WGX ) is a mid-tier gold-mining company with operations in Western Australia. Its Murchison assets are the Cue and Meekatharra gold operations, which include two processing hubs, as well as multiple operating and potential mines. Its Bryah operations include the Fortnum processing hub and the Starlight underground mine.
After hitting a five year low on December 11, 2022, shares of Westgold have steadily risen through 2023, peaking at AU$2.12 on November 5. The company's move higher started when it released results for its second fiscal quarter of 2023 , reporting improved operating cash flow and saying it was tracking toward the top end of its guidance with 128,228 ounces produced in the first half of the year.
The company saw its most significant share price gains between March and May as the price of gold climbed to near record highs on the back of the US banking crisis. These gains were reinforced with news in March from Westgold's flagship mine, Big Bell , which is located at Cue. The firm said Big Bell was exceeding design outputs and had produced 16,342 ounces in January and February; meanwhile, exploration at the site revealed higher grades than were reported in Westgold's December quarterly report.
On March 27, the company reported that drilling at Cue's Great Fingall deposit showed mineralisation at 200 metres below the base of the original mine plan, with grades around 3.7 g/t gold. Continued drilling at the deposit into Q3 helped Westgold stay elevated despite gold beginning its retreat toward US$1,800. The company announced on May 31 that the resource estimate Great Fingall had increased to 588,000 ounces, providing higher confidence that future assays will provide continued high-grade results, both at the site and at the nearby but untested Golden Crown system.
The falling price of gold put downward pressure on Westgold's share price in September. However, the company bounced back in early October as the yellow metal rebounded and as it released results for its first fiscal quarter of 2024. The period saw a combined 63,104 ounces of gold produced between Westgold's assets.
Later that month, the company shared its annual report for its 2023 fiscal year. During the period, its Murchison assets produced a combined 203,382 ounces of gold, while the Bryah operations, supplemented with on-surface low-grade stock, produced 53,735 ounces. In the report, the company said decreased production was offset by the higher gold price, which helped improve cash flow and profitability through the second half of the year. Westgold also said it had begun to see results from new strategies that were implemented in 2022.
4. Emerald Resources
Year-to-date gain: 126.16 percent; market cap: AU$1.64 billion; current share price: AU$2.68
Emerald Resources (ASX: EMR ) is a mid-tier gold exploration and development company. Its core asset, the Okvau gold mine in Cambodia, hosts total measured, indicated and inferred reserves of 990,000 ounces. The company currently has a 76.5 percent stake in Bullseye Mining and has extended the date for a complete takeover to November 24 . Its stake in Bullseye Mining gives it access to an additional three mining projects in Western Australia.
Shares of Emerald have followed a long-term upward trend, gaining 771 percent in the past five years. This year, the company has enjoyed strong gains since January , when it announced record quarterly gold production of 29,640 ounces from Okvau.
A higher gold price and improved output have helped Emerald continue to perform. The company’s half-year report, released on March 16 , shows that production at Okvau reached 52,857 ounces of gold during the period, while Emerald generated AU$24.8 million after tax; its report for the full year shows that the asset produced 108,866 ounces, while the company saw a record after-tax profit of AU$66.2 million.
In addition to strong business reporting, Emerald’s share price has been supported by positive exploration news. Drilling at Okvau has focused on extending the main resource, with the company's latest program including seven drill holes across 2,764 metres. According to an update on October 30 , two holes reveal new high-grade gold structures outside the current underground deposit, with one containing a highlight of 28.01 g/t gold over 2 meters.
In the same announcement, Emerald details recent news from exploration at its other projects. The company shared high-grade drill results from its Memot gold project, which is located 97 kilometres north of Okvau, including results of up to 1 metre grading 67.4 g/t gold within 5 metres grading 15.36 g/t gold. Drilling at the site began in January 2022, and the company has been working towards defining a maiden resource for the project; it expects to release it in late 2023.
The company also shares highlights from the Bullseye-owned North Laverton gold project in Western Australia, including high-grade intervals such as 3.68 g/t over 20 meters. Emerald said current and past results will be integrated into a prospectus for the project to be released in early 2024.
5. Theta Gold Mines
Year-to-date gain: 113.24 percent; market cap: AU$98.71 million; current share price: AU$0.145
Theta Gold (ASX: TGM ) is an Australian gold development and exploration company with operations focused on the Eastern Transvaal gold fields northeast of Johannesburg, South Africa. Its core project is 74 percent stake in the Transvaal Gold Mining Estate (TGME), South Africa’s first mining company; the minority 26 percent stake is owned by Black Economic Empowerment, which includes a group of local community and employee trusts along with a strategic partner. The TGME gold mine site hosts four planned mines.
Theta's share price began to trend upward during the first half of July following news the company was able to raise AU$5 million through a private placement with Hong Kong Huihua Investment Management. The company said the funding would be applied to permitting and an initial exploration program at TGME. The company announced on July 19 that operations had begun at the site following the commencement of a 3,000 tonne bulk sampling program that was to be delivered to the Barberton gold plant, owned by Pan African Resources (LSE: PAF ,OTCQX:PAFRF).
Theta has continued to see share price momentum, achieving a year-to-date high of AU$0.15 on September 21. The increase came after the company announced that significant investor and shareholder 2Invest had exercised 5,000,000 unlisted options into fully paid ordinary shares. According to Theta, the funds raised will allow the company to advance the bulk sampling program at its Frankfort mine site.
In its 2023 annual report released on September 29, Theta said it expects the mine to produce 1.24 million ounces over a 12.9 year lifespan, with production to begin during the 2024 calendar year. The company also said it has received the necessary environmental and water use permits.
FAQs for ASX gold stocks
How to invest in gold on the ASX?
As Australia is a top gold-mining jurisdiction and the country's government is supportive of mining, there are plenty of options for investing in gold on the ASX. Between gold miners operating major projects and gold explorers hunting for the next significant gold discovery , investors can choose what kind of company matches their risk appetite and portfolio.
When looking for a gold company to invest in, be sure to do your due diligence and learn about the company's key characteristics, including its leadership team, its finances and the geology of its projects.
How to buy gold on the ASX?
Once you’ve selected a company or multiple companies to invest in, you can buy gold stocks using trading apps with access to ASX stocks, or you can get the help of a stock broker.
How to buy gold ETFs on the ASX?
For investors who prefer broader exposure to a sector, exchange-traded funds (ETFs) are a good option, and the ASX is home to multiple gold-focused ETFs . Because they are traded on exchanges like stocks, you can buy ETFs using the same methods described above. ASX-listed gold ETFs to consider include:
- ETFS Physical Gold (ASX: GOLD ) , which promises "low-cost access to physical gold via the stock exchange" and can be redeemed for physical gold.
- Perth Mint Gold (ASX: PMGOLD ) , which tracks the international price of physical gold.
- BetaShares Gold Bullion (ASX: QAU ) , which also tracks the physical bullion price.
- The Van Eck Gold Miners ETF (ASX: GDX ) , which tracks the NYSE Arca Gold Miners Index (INDEXNYSEGIS: GDMNTR ).
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.