Gold Mining Bull: Top News For April 2021
Summary
- This is the top news for the gold and silver mining sector for the month of April 2021.
- Barrick is set to re-open its Porgera gold mine.
- Fortuna and Roxgold are merging. Is M&A about to heat up?
- Get ready for an active May for gold and silver miners.
- Looking for a helping hand in the market? Members of The Gold Bull Portfolio get exclusive ideas and guidance to navigate any climate. Learn More »
Gold Mining Bull: Top News For April 2021
(Gold miner's might have reached a yearly bottom in early March. Credit: StockCharts)
(Are gold miners still undervalued? It sure looks that way: The HUI-to-Gold ratio is 0.16X, well below the 0.64X ratio reached in 2003. Credit: MacroTrends)
It's been a good month for gold miners (GDX) and silver miners (SIL). The metals appear to have bottomed in March and have been steadily rising since then, lifting the prices of mining stocks.
Several gold and silver miners reported strong production figures in April and are set to report earnings soon. With gold prices averaging over $1,700/oz in Q1 2021, and the majority of gold miner's reporting all-in sustaining cash costs of $1,000/oz or less, it should be another strong quarter for the sector as a whole.
Valuations also remain very attractive relative to the price of gold. The HUI-to-Gold ratio measures one share of the NYSE Arca Gold Bugs Index (a collection of top miners) divided by an ounce of gold. The ratio is currently 0.16X, well up from 0.14X in February 2021, but still well below the highs seen in 2003.
I've scoured gold mining newsletters, websites, and press releases to provide what I feel is the top news in the gold and silver mining sector for April 2021. This includes production results or earnings, exploration updates, mergers and acquisitions, and other relevant news, to keep readers up-to-date.
Please let me know if I missed any big news in the comments section below.
Honorable Mention News
Here are some notable news items that just missed making my top list for April:
Marathon Gold Report Maiden Resource for Berry Deposit: Newfoundland gold developer Marathon Gold (OTCQX:MGDPF), which is advancing its 100%-owned Valentine Gold Project, has released a maiden resource estimate for the Berry deposit. The 1+ million ounce inferred resource addition is based on 42,000 meters of drilling and lifts total resources at Valentine to 3.14 million (measured and indicated) and 1.64 million (inferred), close to 5 million ounces.
The results are encouraging but investors should note that the resource will not be incorporated into its development plan for the time being as further exploration work is required.
Canada Silver Cobalt Hits 51,612 g/t Silver: The Canadian silver explorer Canada Silver Cobalt (OTCQB:CCWOF) but out this flashy drill hole recently, hitting super-high silver grades. But the market didn't seem too impressed. The grades are excellent, but the intersection is at 561-meter depth, and the stock price hasn't budged. Perhaps there's skepticism over how the company will profitably mine these high-grade narrow veins at 500+ meter depths?
Montage Gold's Infill Drill Success: The gold explorer focused in Cote d'Ivoire put out some stellar infill drill results recently, which included 105 meters of 1.39 g/t gold and 79.2 meters of 1.55 g/t gold. Infill drilling helps with resource modeling and converting inferred resources into higher-confidence categories.
Montage (OTCQX:MAUTF) is a name to keep an eye on as it plans to advance the 3+ million ounce Morondo project quickly. It will release a PEA study in May, followed by an indicated mineral resource update expected in Q3 2021, and then a feasibility study by year-end.
Skeena Announces 5.3 Million Ounce Resource at Eskay Creek: Skeena Resources (OTCQX:SKREF) put out a robust resource estimate for its Eskay Creek gold-silver project, located in the Golden Triangle of British Columbia. The 5.3 million ounce gold equivalent resource was based on 651,332 meters of historical drilling, as well as 104,740 meters of drilling completed by Skeena from 2018-21. Silver bulls will be happy to hear that the resource carries over 100 million ounces of silver (including in the 5.3 million ounce estimate).
Skeena also followed up this resource with a C$5 million investment and reported more strong drills, including 45.76 g/t gold over 5.60 meters.
Rupert Resources Impresses with Stellar Drills: The Finland-focused gold explorer has been striking excellent drills at its Pahtavaara project, most recently, reporting 4.4 g/t gold over 188 meters, starting from just 64 meter depth, and 3.8 g/t gold over 141 meters, starting from 30 meter depth, among other impressive results. The results "further confirms the exceptional continuity and grade of the discovery over significant drill intercept lengths," according to CEO James Withall.
Rupert (OTCQX:RUPRF) is targeting multi-million ounce discoveries located close to its permitted gold mill, and it is located 50km from Agnico Eagle's Kittali mine (Agnico is a 14.9% shareholder.) Next up is a resource estimate due out in Summer of 2021.
Alamos Gold's $1 Billion Claim Against Turkey: Mid-tier gold miner Alamos Gold (NYSE:AGI) has announced a $1 billion investment claim "for expropriation and unfair and inequitable treatment" with respect to its Turkish projects, Kirazli, Agi Dagi, and Camyurt. Among other complaints is the government's failure to grant a routine renewal of Alamos' mining licenses, despite it having met the requirements. This is not a positive development and I believe it should be watched carefully by any company or investor with exposure to Turkey.
Top 5 News for April 2021
These are my top 5 most noteworthy news items for the month of April.
5. Kirkland Lake Gold's First Quarter Production
Several gold miners reported strong first quarter production figures, but I feel that Kirkland Lake Gold's (KL) was among the strongest.
The senior gold miner says it exceeded its quarterly guidance of 270,000 - 290,000 ounces by producing 302,847 ounces, due to higher than expected production at both Fosterville and Detour Lake Mine in March. It sold 308,029 ounces of gold at an average price of $1,788/oz. I am particularly encouraged by the higher-than-expected grades at Fosterville as there have been concerns with declining grades and output from the mine.
Investors should also keep in mind that things should only get better from here as production is weighted to the second half of the year due to mine sequencing. Kirkland Lake Gold will release its Q1 2021 earnings on May 6, 2021.
4. Osisko Delivers Strong Updated PEA Study
Osisko Mining's (OTCPK:OBNNF) Windfall project is developing into a potential world-class asset.
On April 7, it released a robust updated preliminary economic assessment study that envisions a 300,000/oz per year production profile over the first 7 years, averaging 238,000/oz year over an 18-year mine life. More importantly, it profiles as a low-cost asset, producing gold at an average all-in sustaining costs of US$610/oz, with reasonable upfront capex of US$442 million, easily covered by the project's net present value (US$1.25 billion, using a $1,500/oz gold price, rising to US$1.79 billion at US$1,700/oz gold).
Osisko's drill parade also continues with several robust assays reported in the month of April, including 296 g/t gold over 2 meters reported on April 27, which indicates the potential for expansion of the resource.
3. New Found Gold Reports 261.3 g/t Gold over 7.2 Meters
Osisko Mining would have had the best drill results in the gold sector for April, if not for New Found Gold (OTCPK:NFGFF).
The up-and-coming Newfoundland-focused gold explorer put out several big news releases in April, but its best results came in the April 20 release when it reported 261.3 g/t gold over 7.2 meters at the Keats Zone of the Queensway project.
New Found Gold is cashed up following closing of the $15 million financing with Eric Sprott and investors can expect more strong hits from its ongoing 200,000-meter diamond drilling program. New Found Gold's valuation has risen quite a bit this past month but I maintain my bullish stance on this top-tier gold explorer.
2. Barrick to Re-Start Porgera Mine
Barrick Gold (GOLD) says its Porgera mine in Papa New Guinea, which has been on care and maintenance since April 2020, is set to resume operations late this year after it agreed on a partnership with the government.
Currently, Barrick and Zijin Mining each own 50% of the mine but the new partnership calls for the government to own a 51% stake and Barrick/Zijin to own 49%.
Despite the reduced ownership, I view this as positive news for Barrick as it can bring a dead asset back to life. Porgera was one of the world's top 10 gold mines and the second largest mine in PNG before the suspension of operations, and it has the potential to produce upwards of 500,000 ounces of gold annually.
1. Fortuna Silver Mines and Roxgold to Merge
Americas-focused gold & silver miner Fortuna (FSM) has agreed to acquire via merger Burkina-Faso focused gold miner Roxgold (OTCQX:ROGFF) in what I feel is a move that doesn't add much value to either company.
My main issue is I don't believe the merger comes with any synergies, meaning the combined company is no greater than the sum of their individual parts. It will be a larger company which will have greater access to capital and higher trading liquidity, but other than those benefits, I struggle to see any value creation given the lack of synergies. Neither stock has fared very well since the announcement.
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This article was written by
Gold Mining Bull is a gold analyst with more than a decade of investing experience in commodities, hard assets (gold and silver miners), exploration companies, oil and gas producers, MLPs, and more.
Gold Mining Bull is the leader of the investing group The Gold Bull Portfolio where he gives you exclusive access to his portfolio, buy/hold/sell ratings, in-depth research and actionable analysis on 150+ gold, silver, copper, natural gas, and mining stocks, and more. Learn More.
Analyst’s Disclosure: I am/we are long KL, GOLD, NFGFF. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
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Comments (19)
,Does the author sell or buy? It is unclear
If he buys from where
is it his review or trivia ???
in any case, every trader sees the two world news leaders live on the screen. what new will the 88 -th tell me?3\ If the author writes about the hui index, he is obliged to report his trading view. that's my opinion, otherwise what is the point of taking the podium?4\ That this is not an axiom for you amazes me .When I get in a car I assume that
All other drivers drive the way they should, not the way they want to.
