GOLD ETFs NEWS - The SPDR Gold Trust (GLD), the most-widely held gold ETF, fell 1.0% to $115.51 Monday amid further liquidation in the gold sector. Weakness in the GLD came as the euro continued to strengthen against the U.S. dollar, rising 0.1% to 1.296. With today’s sell-off, the GLD extended its loss this month to 5.1%, but remains higher by 7.6% year-to-date.
Despite the recent correction in the yellow metal, gold ETFs such as GLD have continued to outperform stocks and cyclical commodities amid an environment characterized by heightened risk aversion. Investors have poured funds into the GLD, and increased exposure to individual gold companies in order to gain enhanced leverage to the price of gold. Investors have also driven up the share prices of a number of small-and mid-cap gold companies that have been able to consistently find economic gold deposits in politically-safe jurisdictions.
One such company is San Gold (SGR.TSXV), a Canadian-based gold miner that has drawn comparisons to Goldcorp (GG) for its numerous high-grade gold discoveries. Over the past 52 weeks shares of San Gold have surged 64.4%, versus a 25.3% rise for the GLD. San Gold’s outperformance of the gold ETF is largely a function of increased growth expectations, stemming from several encouraging sets of drill results.
San Gold reported its latest set of drill results this morning at its 007 discovery, located approximately two kilometers north-east of the company’s operating Rice Lake Mill gold mining operation. The gold miner announced that “Infill drilling is confirming the high-grade nature of San Gold Corp’s 007 Zone at all depths within currently known limits.” Results from the drilling program have continued to demonstrate high-grade gold intercepts, including 1.55 ounces per ton over 31.5 feet at Hole# CD-10-091 - following the previously reported spectacular intersection of 3.9 ounces per ton gold over 10.2 feet.
The Canadian gold company went on to provide an update on operations at its Rice Lake mine, which during the second quarter continued to focus on the development of the upper and eastern extensions known as the 98 area. San Gold further discussed its expansion plans, whereby the company stated its intention to undertake an “aggressive program of exploration, development, and expansion over the next 18 to 36 months in order to convert mineral resources to reserves, extend and develop new zones to depth, and to consolidate and expand production capacity.”
