Gold's Bull Run Projected To Continue Into 2021

April 02, 2021 / Article Link

Despite a dip in its value, there is no slowing gold down as investors’ preferred safe asset. Even with falling numbers of COVID-19 infections, news of adverse reactions to the vaccines of AstraZeneca and Moderna continue to fuel uncertainty. The transition of power in the US has also not gone smoothly and Biden’s administration is struggling with the aftershock of the pandemic.

Many analysts are drawing a parallel between the value of gold in the years following the Great Recession, the economic crisis of 2007 to 2011 and the current situation. In the summer of 2020, the price of gold surpassed the threshold of $2,000 an ounce for the first time in history. This in turn gave a boost to the mining stocks of major, mid-tier and junior gold miners.

Now, as talks of a weakening US dollar continue, some analysts predict that gold's second coming is just around the corner. And some gold stocks are already gaining traction as spot gold falls to $1727.3 per ounce in this week’s trading session.

The most active mining stocks of junior gold miners this week include Calibre Mining Corp. (OTCQX: CXBMF) (TSX: CXB), K92 Mining Inc. (TSXKNT) (OTCQX: KNTNF), IAMGOLD Corporation (TSX: IMG) (NYSE: IAG), New Gold Inc. (TSX: NGD) (NYSE: NGD), B2Gold Corp. (TSX: BTO) (NYSE: BTG).

Calibre Mining Corp. (OTCQX: CXBMF) (TSX: CXB) is in good standing following an announcement of its El Limon and La Libertad mining complexes in Nicaragua.  Calibre's 202% increase in Mineral Reserves supports a strong foundation for a multi-year "Hub-and-Spoke" production and growth strategy.  A combination of a large Mineral Reserve base and the highest reserve grade on record has given investors confidence that the company will be able to generate strong cash flow.

K92 Mining Inc. (TSX: KNT) (OTCQX: KNTNF) is another junior gold miner whose recent results from its financial statements mark a transformational year. Its Kainantu mine delivered record throughput, production and development, and finished the year particularly strong. In the third quarter, K92 achieved two major growth milestones: the completion of the Stage 2 Plant Expansion commissioning, and; the Stage 3 Expansion PEA study. The Stage 2 Plant Expansion came through, doubling throughput capacity from 200,000 tpa (~550 tpd) to 400,000 tpa (~1,100 tpd).

The mining stock of IAMGOLD Corporation (TSX: IMG) (NYSE: IAG) is looking good after the miner announced additional assay results from its delineation diamond drilling program at the Côté Gold deposit. The Gosselin delineation drilling program is being undertaken as part of the Côté Gold Joint Venture Project between IAMGOLD and Sumitomo Metal Mining Co., Ltd. ("SMM"). Côté, located 125 km southwest of Timmins and 175 km north of Sudbury, Ontario, Canada, is currently under construction with first gold production anticipated in the second half of 2023.

Finally, B2Gold Corp. (TSX: BTO) (NYSE American: BTG) is making progress with its Menankoto exploration permit 20 kilometres north of the Fekola Mine license area. The Company's Malian subsidiary, Menankoto SARL applied for a one year renewal of the Menankoto Permit in and is engaged in ongoing discussions with the Malian Government for this purpose. The current life of mine plan for the Fekola Mine, which is projected to produce 530,000 to 560,000 ounces of gold in 2021.

So far, we’re seeing a strong rebound in retail gold demand which should support higher gold prices through the wealth effect. Gold demand from China and India is already displaying signs of normalisation. With lower tariffs, the currencies of emerging market consumers are posed to go higher, supporting their purchasing power. The strategic case for gold thus remains strong in the view of Goldman Sachs analysts. The firm gives a $2,300/toz gold price target in 2021.