Canadian junior gold miners advance on insider trading

By Staff Writer / June 24, 2020 / Article Link


Canada's main stock index future rose on Monday with support by firmer gold prices against the backdrop of global concerns related to rising coronavirus cases.

Gold futures GCc2 rose as much as $1,767.6 an ounce, hitting a one-month high, as investors were drawn to safe-havens.

As the yellow metal is slowly seeing some safe haven interest again, it is now finally and comfortably through $1,750 so the next significant test will be $1,800.

August gold GCQ20, -0.03% was down $1.80, or 0.1%, at $1,780.20 an ounce, though traded as high as $1,796.10 intraday. It settled Tuesday at the highest for a most-active contract since Oct. 4, 2012, when prices ended at $1,796.50. A settlement at $1,800 would be the highest level since Sept. 2011, according to FactSet data.

In addition to the bullish run of gold, an update on recent insider buying and insider selling in the gold mining sector saw the gold stocks of several Canadian junior gold miners advance.

Treasury Metals is a Canadian-based junior gold developer operating in the Goliath Gold Project in Canada. It s latest announcement for the acquisition of the nearby Goldlund Gold Project from a First Mining Gold Corp. subsidiary saw insiders turn bullish on the gold stock of Treasure Metals.

Another Canadian gold miner Ivanhoe Mines carries a market cap north of $2.38 billion and a strong cash position of $603 million, as of March 31, 2020. The company announced its Kakula project is on track for production by Q3 2021; the combined Kamoa-Kakula resource contains 432 million tonnes of copper grading 4.68%, making it one of the highest-grade undeveloped copper mines in the world.

Given Ivanhoe’s high valuation, it was not surprising that Robert Martin Friedland, a director, senior officer and 10% holder of shares, purchased a total of 63,900 shares of gold stock at prices between C$3.395 and C$3.53, bringing his total shareholdings to 25.755 million shares.

Roxgold is the third Canadian gold mining company that registered high insider trading activity recently.  John Lewis Knowles, director, purchased 50,000 shares at C$1.28, bringing his total shareholdings to 390,000. Recently, Roxgold reported Q1 2020 financial results, and it says it produced 32,380 ounces of gold at all-in sustaining costs of $1,058/oz. This led to $25.4 million in operating cash flow and positive net income. For 2020, it expects to produce between 120,000 and 130,000 ounces of gold at AISC between $930 and $990/oz.

Gold price have been strengthening as new cases of coronavirus continue to rise and specialists talk of a coming ‘second wave’. With many economies still struggling from the 3-month shutdown, a second lockdown may cause even more financial devastation to markets, companies and an unprecedented decline in global activity.

In fact, growing economic and political uncertainty prompted further investment demand for gold as an increasing number of traders are viewing the continued gains on stocks as fragile and unsustainable.