October is often referred to as the “crash” month. Will history repeat for the ASX 200? Well, the great crashes of 1929, 1987 and 2007 all happened in October. Already, stock markets have looked nervous the past few weeks.
Following a downturn for the broader market since the middle of August, the ASX looks to have shaken off the shackles once again as the ASX 200 is back on a positive momentum.
Gold prices have continued to be under pressure in 2021. In the last few months, Gold prices have dipped. The year-to-date performance of gold sits at -5.83%. Given the risk in the markets now, gold may have a bullish run coming soon.
Newcrest Mining is one of the largest gold mining companies in the world. It is the largest in Australia, producing 2.2 million ounces of gold in FY2020. Newcrest owns and operates a portfolio of predominantly low cost, long life mines and has a strong pipeline of Brownfields and Greenfields exploration projects.
Their reserve and resource base is strong, with current gold reserves representing more than 24 years of production at current rates. Newcrest uses a variety of efficient mining methods for large ore bodies.
The company primarily owns and operates mines and projects located in Cadia and Telfer, Australia; and Lihir, Papua New Guinea. It also holds 70% interest in the Red Chris mine project located in British Columbia, Canada.
Newcrest’s cash flow is also booming, generating a record annual $1.1 billion of free cash flow throughout FY21. The firm saw record mine and mill performance at Cadia. This ensured that Newcrest’s bottom line benefitted massively, delivering a statutory net profit after tax (NPAT) of $1.2 billion, up 83% on the prior year. On an underlying basis, NPAT still grew at an impressive clip, up 55%.
Newcrest providend a comprehensive table for their guidance expectations for FY22. The company is guiding for total gold production between 1.8 million and 2 million ounces, and copper production between 125,000 and 130,000 tonnes. AISC, which includes production stripping and sustaining capital, is expected to land in the range of $1.7 billion to $1.9 billion.
Operationally, Newcrest has not put a foot wrong. However, given the weakness in gold prices, Newcrest shares have slid. NCM shares currently trade at $24.94 a share with a dividend yield of 3%. This may be the right time to consider one of the best gold stocks on the ASX.
The Northern Star share price has leapt into the green since trade commenced this month and now trades at $9.22 apiece. NST has been crawling higher these past few days after hitting a low of $8.26 last week, but they have still marched lower from $10 back in July.
Gold miner, Northern Star is one of Australia’s leading ASX-listed precious metal producers. With a resource base located in the gold regions of Western Australia. NST is currently involved in the exploration, development, mining, and processing of gold deposits. The company also sells refined gold derived from the Jundee, Kundana, Kanowna Belle, Paulsens, and South Kalgoorlie operations.
Whilst there has been no market-sensitive information for the gold mining company, it is worth noting that the price of gold has popped higher since we started the month. After trending downwards lately, gold bottomed out at a low of US$1,723/oz on 30 September. As of today, gold is trading at US$1,755/oz.
The recent gain has certainly got investors’ attention and has pushed the ASX gold basket higher over these past few days.
If you want to play the gold rebound, do not look any further. Northern Star is an ASX resources share that is in a unique position, in that it is in the business of mining and processing gold deposits. As such, it must accept the spot and/or forward price of gold in the commodity markets and is considered a price taker. This means NST share price can fluctuate with the volatility in the underlying commodity markets.
The Northern Star share price has struggled this year to date and has missed its benchmarks completely.
NST shares now trade at $9.48 a share.
Nova focusses on gold exploration in the Tintina Gold Province in Alaska. Nova’s flagship project, the Estelle Gold District is being explored year round. The resource currently stands at 4.7Moz Inferred.
The Estelle Gold project sits approximately 110 miles (177km) northwest of Anchorage, Alaska’s major city. This provides a large labour force and all essential services. Access is via snow road or by air, with the nearby Whiskey Bravo airstrip being compliant for DC3 aircraft.
The Estelle Gold Project comprises 346 State mining claims totalling 324 km2 of unpatented mining claims located on State of Alaska public lands. There are multiple prospects within the project area; Korbel Main (Block A, B, C, D, Isabella, Cathedral, You Beauty, Sweet Jenny), Stoney, Tomahawk, Kid, T5, Trundle, Mount Estelle, Shoeshine and Train, Emerald, RPM and Revelation.
The Estelle Gold project is located in a world-class district within the premier Tintina Gold Belt (Alaska) that hosts more than 220 Moz in mostly bulk tonnage, high margin deposits.
As well as its gold assets, Nova has established a diversified portfolio of interest in other minerals to hedge against fluctuations in gold price and expose Nova to upside in other high-value minerals. Nova has an indirect interest in the Canadian Thompson Brothers Lithium Project through a substantial stake in Snow Lake Resources Ltd, an aspiring Lithium developer in Manitoba.
Nova is thus a high potential gold miner that is also diverse across multiple commodities. The latest news coming out of Nova is – additional broad zones of high-grade intersected at the RPM North prospect, planning now underway for a Maiden Resource in line with Nova strategy of unlocking the Estelle Gold District.
Management said these latest results at RPM North further confirm the discovery of Gold. It is another massive Intrusive Related Gold System within the Estelle Gold Project. Nova now has two – Korbel and RPM and we believe there are many more to come as we continue to unlock the district.
NVA shares currently trade at $0.155 a share.