With gold prices at record levels, the September quarter will post the highest average quarterly gold price ever, and “significant margin expansion,” said Neil Adshead, consultant analyst at the Commodities Discovery Fund.

This week Kitco correspondent Paul Harris recorded Digging Deep with Adshead.

“It'll be great to see two or three gold mining companies far exceed the expectations of what the sell-side analysts are projecting. There'll be some bumper profits and that will definitely draw some investors into the sector. Normally, during the happy days, the maximum margins you see are in the 40% range. If we start to see a few of the higher-grade producers generating +50% margins, that would be spectacular,” said Adshead.

Investors are starting to warm to the gold equities again with the GDX index fund up 35% year-to-date. However, with most companies still trading at less than 1x their net asset value (NAV), Adshead believes there is more share price growth to come.

“When I first started as an investment analyst, some of the hot producers of the day were trading at 2.5x NAV. To see those multiples again would be remarkable. There is certainly a lot of room for some of these producers to trade up,” said Adshead.

Adshead also spoke of he would like to see gold companies allocate the additional funds they are earning to mine expansions, building new mines and acquiring new projects to build.

While a number of large financings have been announced, Adshead said it is still a selective market. The sector is not yet frothy enough to be writing checks carte blanche to juniors.

“We are actually in a pretty good market for financing, but it is not like every junior can raise whatever dollars they want," said Adshead. "I quite like that as in a peak bull market is when you also get peak capital misallocation: when a lot of companies get money that shouldn't be getting money in the first place, or companies take far too much money than what they really need and end up wasting it,” he said.

Adshead also commented on the Guyana Shield as a hot exploration region, Iceberg’s shorting report on Newfound Gold’s Queensway orogenic gold deposit in Newfoundland, Canada, NGEx Minerals plan for its largest ever drill program at its Lunawasi copper discovery in San Juan, Argentina, a new president in Mexico and the outlook for uranium.

Digging Deep is brought to you by Revival Gold. Revival Gold is one of the largest, pure gold, mine developers in the United States. The Company is advancing engineering and economic studies on the Mercur Gold Project in Utah and mine permitting preparations and ongoing exploration at the Beartrack-Arnett Gold Project located in Idaho. Revival Gold is listed on the TSX Venture Exchange under the ticker symbol “RVG” and trades on the OTCQX Market under the ticker symbol “RVLGF”. The Company is headquartered in Toronto, Canada, with its exploration and development office located in Salmon, Idaho.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Most resource companies lack good communication strategies, said Nicole Adshead-Bell, principal at Cupel Advisory.

This week Adshead-Bell recorded Digging Deep with Kitco Correspondent Paul Harris at the Gold Forum Americas / XPL-DEV 2024 in Colorado.

Gold is having a staller year, hitting several all-time highs, but equity performance has not matched expectations, particularly among juniors and developers. A select number of companies are doing well. Bell anticipates increased merger and acquisition (M&A) activity as companies seek growth opportunities, which would further investor interest in the resource sector.

"I think there's some bifurcation. I heard a very good description at the [Precious Metals Summit Beaver Creek] conference last week, which was 'we're in a stealth bull market.'" said Adshead-Bell. "We have gold at near record highs, and yet there's not the equity performance that one would expect when we've seen this very nice performance in the underlying gold price. We haven't got the marginal investor here, but for the first time I'm seeing generalists at this conference, and I'm getting incoming calls from generalists who are starting to look at the sector."

Bell emphasized that commodity markets, especially gold, are cyclical, and understanding the phase of the cycle is key to making informed investment decisions.

She also discussed the challenges of messaging in the mining sector, highlighting that many CEOs struggle with effective communication, which limits investor engagement. Bell observed that poor storytelling and a lack of enthusiasm from leaders are major obstacles for companies to attract investment, especially in a competitive market.

She stressed the importance of strong communication skills among executives, pointing to leaders like Robert Friedland and Rick Rule as examples of excellent communicators who successfully connect with both institutional and retail investors.

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Digging Deep is brought to you by Revival Gold. Revival Gold is one of the largest, pure gold, mine developers in the United States. The Company is advancing engineering and economic studies on the Mercur Gold Project in Utah and mine permitting preparations and ongoing exploration at the Beartrack-Arnett Gold Project located in Idaho.

Revival Gold is listed on the TSX Venture Exchange under the ticker symbol “RVG” and trades on the OTCQX Market under the ticker symbol “RVLGF”. The Company is headquartered in Toronto, Canada, with its exploration and development office located in Salmon, Idaho.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Good gold prices are delighting several miners, said David Erfle, founder and editor of the JuniorMinerJunky.com.

On Thursday Erfle recorded Digging Deep with Kitco correspondent Paul Harris at the 2024 Precious Metals Summit Beaver Creek in Colorado.

Gold hitting all-time highs is a welcoming sign.

“I've spoken with several happy management teams the past few days that have been de-risking large high margin, late-stage projects and are enjoying their respective share prices bifurcating from the sector,” said Erfle.

Erfle noted there had been some big equity moves in recent weeks. He wondered if the moves will catch the interest of the broader investment community.

“Will we see more generalist investors finally come back into this tiny sector after leaving over a decade ago?”

Erfle said gold could hit $3,000 ounce by 2025. Debt worries, war and a potentially chaotic election are tailwinds for gold.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Record gold prices are outstripping inflation and helping goldcos to healthy margins, although the range “is huge” Joe Mazumdar, Editor of Exploration Insights told Kitco Mining’s Digging Deep.

“The average gross margin was 45-46% for [the 20 North American listed companies he studied] which is healthy,” said Mazumdar.

Mazumdar said that the net debt level of the group was about US$275 million, but again with a large range from industry leader Newmont, which post Newcrest acquisition is sitting at about $2.3 billion, to companies negative net debt. “About half of the companies have negative net debt, or very low net debt, which is very encouraging,” he said.

Digging Deep is brought to you by Revival Gold. Revival Gold is one of the largest, pure gold, mine developers in the United States. The Company is advancing engineering and economic studies on the Mercur Gold Project in Utah and mine permitting preparations and ongoing exploration at the Beartrack-Arnett Gold Project located in Idaho.

Revival Gold is listed on the TSX Venture Exchange under the ticker symbol “RVG” and trades on the OTCQX Market under the ticker symbol “RVLGF”. The Company is headquartered in Toronto, Canada, with its exploration and development office located in Salmon, Idaho.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Christopher Ecclestone, principal and mining strategist at Hallgarten + Company, said gold companies should increase their dividend payments to shareholders as their margins increase due to the increasing gold price, which has grown about 20% this year.

He applauded AngloGold Ashanti, which hiked its dividend from 4c a share to 22c after quintupling profits to $313 million for the six months to June 30. It been one of the best-performing gold stocks this year, up 55%. Of all the gold producers that have reported earnings, AngloGold is the only one that has increased its dividend.

Ecclestone also commented on Gold Fields s looking to option the Santa Cecilia copper-gold project in Chile from Torq Resources, funding for copper juniors now Filo is being bought by BHP, Glencore keeping its coal business, Arizona Sonoran Copper's PEA on its Cactus copper project in Arizona, and Patriot Battery Metals resource estimate for its Corvette lithium pegmatite project in the James Bay region of Quebec, renamed Shaakichiuwaanaan.


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Digging Deep is brought to you by Revival Gold. Revival Gold is one of the largest, pure gold, mine developers in the United States. The Company is advancing engineering and economic studies on the Mercur Gold Project in Utah and mine permitting preparations and ongoing exploration at the Beartrack-Arnett Gold Project located in Idaho.

Revival Gold is listed on the TSX Venture Exchange under the ticker symbol “RVG” and trades on the OTCQX Market under the ticker symbol “RVLGF”. The Company is headquartered in Toronto, Canada, with its exploration and development office located in Salmon, Idaho.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

Copper M&A should heat up as a result of BHP (NYSE:BHP) and Lundin Mining (TSX:LUN) agreeing to buy Filo (TSX:FIL) for $3.25 billion (C$4.5B) and create a joint venture to develop the Josemaria and Filo del Sol deposits in San Juan Argentina, Neil Adshead, Consultant Analyst at Commodity Discovery Fund, said on Kitco Mining’s Digging Deep.

This week Adshead recorded an episode of Digging Deep with Kitco Correspondent Paul Harris.

“I suspect in every major mining company boardroom of the world, they will be asking questions of their own corporate development team saying, should we have done this deal? There will be pencils sharpened and people getting an email saying ‘come on, we need some growth’,” said Adshead.
With gold producers reporting that June quarter financial results and the gold price at near record levels of more than US$2,400/oz, Adshead said that high prices do not necessarily translate into higher margins as companies often use high prices to lower their cut-off grades. “I don't think we're going to suddenly see 50% of the mining industry making 50% profit margins. … When commodity prices rise, cut-off grades drop, and margins roughly stay the same,” said Adshead.

Higher prices continue to stimulate M&A activity with Integra Resources (TSXV:ITG) to acquire Florida Canyon Gold (TSXV:FGCV) for C$95 million in stock.

Adshead said he expects Vizsla Silver (TSXV:VZLA) to become the next large silver mine in Mexico after it published a preliminary economic assessment on its Panuco project in Sinaloa, targeting production of targets 15.2Moz/y for 11 years. The project would generate an after-tax internal rate of return of 85.7% and have a nine-month payback following an initial capital investment of US$224 million.

“One of my rules of thumb as an investor is if you see a payback of 12 months or less, then you definitely should have a look at the asset, the people and the study, because that type of asset is incredibly rare and usually very high quality,” said Adshead.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

With analysts expecting another strong earnings quarter from Newmont (NYSE:NEM) when it announces its June quarter results on 24 July, main street investors should start taking notice of gold stocks, Junior Miner Junky editor David Erfle told Kitco Mining's Digging Deep.

"I see smart money coming into Newmont. ... The Newmont share price is the big boy, the bellwether, the one that everybody looks at. ... Since the end of February, they've been leading the gold stocks up," said Erfle.

In anticipation of better days ahead, major mining houses such as Agnico Eagle Mines, Zijin Mining and Barrick Gold continue to take foothold positions in junior explorers and developers with both gold and copper projects.

"The world's biggest mining companies are all seeking to expand in copper in anticipation of rising prices as demand for clean power and data centers are forecast to outstrip supply in the future," said Erfle.

Recent days have seen Zijin Mining buy a 9.9% stake in African gold developer Montage Gold for C$57.3 million, South African mining firm Assore invest C$68 million for a 14.99% stake in Chilean copper developer Marimaca Copper, Agnico Eagle Mines invest another C$99 million to maintain its 9.9% stake in Canadian copper developer Foran Mining and take a 13.3% stake in Finland gold explorer First Nordic Metals, and market rumors of BHP and Lundin Mining potentially double-teaming to buy Filo.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.

If the markets don't show appreciation for a quarter that should be quite favorable for the gold miners, cashflow could just go to dividends instead of growth and M&A, said Joe Mazumdar, editor of Exploration Insights.

This week Mazumdar recorded an episode of Digging Deep with Kitco Correspondent Paul Harris at the Rule Symposium in Boca Raton, Florida.

The two noted the upcoming second quarter. It is important that the miners show they are containing costs, said Mazumdar. Margins need to grow, and the miners need to build cashflow. With gold hitting several all-time highs this year, profitability should be good, but will the markets care?

"If they're not getting any love, then [the money] is probably going into dividends," said Mazumdar.

The two also discussed developments in artificial intelligence and its impact upon the resource sector.

Disclaimer: The views expressed in this podcast are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this podcast do not accept culpability for losses and/ or damages arising from the use of this publication.