GOLD STOCKS NEWS – Gold stocks fell Wednesday as the Market Vectors Gold Miners ETF (GDX) dropped $1.86, or 2.9%, to $63.48 per share. The sell-off in gold stocks and the GDX was fueled by substantial weakness in gold bullion, which plunged over $80.00 to $1,794 per ounce. Canada’s leading gold stocks composite, the S&P/TSX Global Gold Index, retreated 2.5% alongside the GDX.
Yesterday gold stocks initially advanced, with the GDX reaching a new all-time high of $66.68 per share as gold hit a new record of $1,922.20 per ounce. However, gold stocks pared their gains as the yellow metal turned sharply lower. Coupled with this morning’s weakness in gold stocks, the GDX has now tumbled 4.8% in just 24 hours.
One factor contributing to the move lower in gold stocks was a cautious report published yesterday by Jefferies analyst Peter Ward. In a research note on the gold stocks sector, Ward argued that the risks of longer-term inflation have increased due to the policies of central banks across the globe. Although higher interest rates are unlikely in the near term, he argued that they remain a significant risk for gold mining companies in the years ahead. Ward also contended that the high cost of mining and the challenge of replacing depleted gold reserves are potential negatives for gold stocks.
Although news in the gold stocks sector was relatively light on Wednesday, one company making headlines was Barrick Gold (ABX). This afternoon the Company will host its first investor day in more than three years, where President and CEO Aaron Regent will “provide an update on the Company’s business plans, project pipeline and exploration programs, and other opportunities in its global portfolio of assets.”
In a note to clients, Macquarie Capital Markets viewed the investor day as a “potential positive catalyst given increased disclosure on the company’s underappreciated organic growth pipeline and increased mine life at some of the aging assets , expansion plans for the recently acquired Equinox assets, and an overall corporate strategy and exploration update.”
This morning, Barrick Gold also announced two significant gold discoveries on its 100%-owned Cortez property in Nevada. Based on the results of wide spaced drilling, Barrick has outlined two zones of gold mineralization along a seven kilometer long trend. Rob Krcmarov, Senior VP, Exploration, commented that “These discoveries have the potential to become truly world-class deposits.”
Despite the positive news, shares of ABX – the largest member of the GDX – slid alongside the broader gold stocks sector, by 2.0% to $52.50 in morning trading. Other notable gold stocks moving lower included GDX components Yamana Gold (AUY), Kinross Gold (KGC), and Newmont Mining (NEM). AUY, KGC, and NEM dropped 3.6%, 2.0%, and 2.4%, respectively.
Premier Advances High Grade Gold Deposit in Nevada
- Significant results include an intercept of 0.25 ounces per ton gold across 40 feet including 0.31 oz/t across 22.9 ft in hole SA003.
- Highlighted results from re-assaying selected core from previous drilling at Saddle include 0.94 oz/t across 19.0 ft in hole RCR-40.
- Ongoing drilling continues to intersect significant intervals of mineralized breccia (assays pending) and confirm Premier Gold’s belief that the Saddle Deposit represents one of the most prospective undeveloped high-grade gold deposits in North America.
