Mar 20, 2020 (GoldStocks.com via COMTEX) -- This has been one of the craziest months in the history of the market. The S&P and Dow both plummetted to historic lows not seen since 2017. Given the market uncertainty, gold has also suffered a hit but for different reasons. As we’ve discussed in the past, gold has become known as a safe haven for the market.
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The main point of a safe haven is to access capital during times of extreme strain on the market. Essentially, this is somewhat of a “bank” to store wealth and hedge against market risk. But when the market dives so deep like it has, investors flee to cash and extract value from any investment that could still hold some type of value.
This is a big reason why the dollar increased in value and why many gold stocks saw a decline. Now that things are back in some semblance of order, we’ve got to look back at fundamentals. There’s still a low rate environment, along with global economic uncertainty, while central banks continue to flood money into numerous government initiatives, gold could remain a strong backstop for market risk.
Given the fact that many have dipped during the last few weeks, it might make sense to have several on watch heading into the end of March/beginning of April.
First, IMC International Mining ( IMCX Stock Report ) could be one of the top gold stocks to watch right now. Not only has it NOT pulled back during the recent gold dip, the company just completed a major acquisition. IMC further announced today that it will host a conference call, with us, GoldStocks.com, on Monday, March 30, 2020. We will go over more of the specifics of this latest deal, what it means for the company, and understand what new Chairman Greg Hawkins thinks about the company’s position ( details here ).
IMC’s acquisition of Thane Minerals gives it access to the Cathedral Property. This property covers 51,136 acres and is situated in the Quesnel Terrane. The northern part of the Quesnel Terrane is between the Mt. Milligan Mine and Kemess Mine. Both of these two mines have already reported rich copper-gold porphyry deposits. With the completion of this definitive agreement, the Cathedral property is just one of IMC International Mining Corp. ( IMIMF Stock Report )'s promising projects.
As far as the new Chairman is concerned and why this upcoming call will be important has everything to do with Hawkins’ experience. He was the Founding Project Consultant and/or Founding Director of seven public and private Exploration/Development ventures including 4 that were acquired in big money buyouts. The largest, Nevsun Resources, was bought out by Zinjin Mining for $1.8 billion. The obvious hopes are that Hawkins can bring his experience to IMC International and help build upon its current model.
This week, shares of Yamana Gold ( AUY Stock Report ) climbed higher. This came as the price of gold defended its $1,450 level. Furthermore, Yamana had also issued an update on Friday. The company discussed the next steps for its operations in Argentina.
This includes adhering to the countries isolation period. While the world addresses similar issues, it’s important to look beyond the immediate future and monitor the plans that companies will undertake in order to succeed well beyond this and next quarter.
According to Yamana, “These actions are not expected to have a meaningful impact on the Company's production and cash flows as Cerro Moro has performed well so far in the quarter. Further, the first quarter had been budgeted to be Cerro Moro's slowest quarter in terms of production and cash flows, and most of the Company's other mines are contributing significantly more cash flow, and with production levels ahead of budget at most mines.”
One of the gold stocks that has been beaten up more than others recently has been Sibanye Stillwater Ltd. ( SBSW Stock Report ). In comparison to gold stocks like Barrick Gold ( GOLD Stock Report ) or Newmont ( NEM Stock Report ), Sibanye stock has dropped from highs of $13.27 to as low as $3.50 this week. But on Friday, shares managed to trade higher by more than 8% compared to its Thursday close.
In its last update, the company reported on its second half and fiscal year 2019 results. Sibanye recorded a 44% increase in revenue to $5 billion. In addition to this, the company reported a profit for the year. This was compared to a large loss during the full-year 2018. However, shares began a swift decline shortly after. On Friday, shares have managed to trend higher but it will be interesting to see what happens over the weekend. For now, it is one of the few, including IMC International that has remained green throughout the day on March 20.
Speaking of Barrick gold stock, shares of the company jumped during early trading on Friday. Despite pulling back after the market opened, Barrick has also updated the market on current plans.
On Friday, the company announced emergency COVID-19 response plans are in place across all of Barrick’s sites. "Barrick has a strong culture of caring for the welfare of its employees and communities. Our financial strength, well-established prevention practices, and procedures, and the experience we gained from dealing with two Ebola pandemics around our African operations will stand us in good stead as we face this new and unprecedented challenge," said President and Chief Executive Mark Bristow.
On top of this Barrick gold stock has held support above $15.50 seen late yesterday afternoon. The company continues to see orders intact despite current conditions. Furthermore, its update also cites no hold-ups in supply chain operations as well. This could become a focal point for the broader sector as concerns about supply have likely become a concern of gold stock investors.
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